Part 4: Do You Need Medicare Part D?

What if I have individual insurance that I buy myself?

You can keep this type of insurance (non-medigap, non-group) that covers drugs and be in a Medicare drug plan, too, if you want to. Your insurer must notify you whether your current coverage is “creditable” or not. If it’s not creditable meaning that it is not considered as of equal value to Part D benefits— and you don’t join a Medicare drug plan when you’re first eligible, you’ll incur a late penalty if you join a plan in the future.

If you do join a Part D plan, you could use your individual insurance to supplement Medicare coverage, if the terms of your policy allow this. But any payments made by your insurer for drugs in the coverage gap would not count toward your out-of-pocket limit that triggers catastrophic coverage.

What if I now get my drugs from abroad?

Buying drugs from Canada or other countries generally cost less than drugs purchased in the United States. But consider:

• As Medicare pays a share of the costs, you may find your drugs cost less under Part D than bought from abroad — especially as you now get discounts of more than 50 percent off brand-name drugs in the coverage gap, due to a provision of the 2010 Affordable Care Act, and by 2020 you will pay no more than 25 percent of the cost of any drugs in the gap. So it's worth doing a careful comparison to find out whether you'd save money by shopping abroad.
  
  
• If your income is limited and you qualify for Extra Help, you would save far more than by buying from abroad.
  
  
•  If your drug costs become very high, Medicare’s low-cost catastrophic coverage would give greater protection than low foreign prices.
  
  
• Drugs from abroad do not count as “creditable” coverage. So if your foreign supplies dry up, and you join a Medicare drug plan later than when you first could, you’d pay a penalty.
  
  
• Medicare drug plans will not cover drugs purchased from abroad. Such drugs may reduce your costs in the coverage gap — but be aware that what you pay for those drugs will not count toward your out-of-pocket limit that gets you out of the gap and into catastrophic coverage.
  

What if I get free drugs from a drug manufacturer’s patient assistance program?

You can still do so and have Medicare drug coverage too — as long as the manufacturer’s program continues this help for people on Medicare. Not all do, so you need to check with the company. Or check with the Partnership for Prescription Assistance website. Prescription drugs obtained in this way are useful for coping with the cost of drugs in the coverage gap if you don’t qualify for Extra Help. But be aware that the value of these drugs does not count toward the out-of-pocket limit that gets you out of the doughnut hole.

Patricia Barry is a senior editor at the AARP Bulletin.