Enrolling in Medicare Part D

When Medicare Part D was initiated in 2006, a 6 month enrollment period was provided for all seniors enrolled in Medicare to accept the new prescription coverage. This coverage, which provides a prescription benefit enhancement to Medicare plans, is offered on a voluntary basis during the enrollment period without any penalty or increased rate on the coverage.

Each year, from November to May, Medicare Part D Enrollment reopens for individuals who become eligible for Medicare during that past program year. Each year, over 25 million Medicare-enrolled seniors join Medicare Part D. Generally, the people who choose to take part in Medicare Part D Enrollment do not have other sources of prescription coverage, such as retiree benefits or a prescription-inclusive Medicare Advantage Plan.

Medicare beneficiaries who choose to enroll in a Medicare Part D plan outside of their enrollment period are subjected to a late enrollment penalty for not taking advantage of these benefits during their open enrollment. The premiums for late enrollment plans are increased by 1% of the national average monthly premium, multiplied by the number of months that have elapsed since the end of their eligibility period. For beneficiaries who choose not to enroll in Part D coverage for several years, this can represent a significant increase in the premium price.

Medicare Part D Enrollment takes place with the individual insurance providers who offer and service the plans according to guidance set by the Centers for Medicare and Medicaid Services. Nearly 2,000 different Medicare Part D plans are available nationwide and Medicare beneficiaries have the opportunity to choose from all of the plans offered by their chosen private insurance carrier to identify the appropriate plan for their individual needs. Plans vary based upon the amount of coverage and the out-of-pocket costs remaining for generic and formulary medications.

In addition to their Medicare coverage, some low-income Medicare beneficiaries are dual-enrolled in Medicaid. Medicaid coverage differs from Medicare in that eligibility is means-tested and prescription drug coverage is included as a part of the coverage provided by Medicaid. Currently, Medicare Part D enrollment automatically takes place for Medicare and Medicaid dual-enrolled beneficiaries, as the Centers for Medicare and Medicaid Services have opted to pay the majority of the premiums for dual-enrolled individuals to be enrolled in Medicare Part D.

Medicare Part D enrollment is a straightforward and simple process for eligible Medicare beneficiaries, as they are exempted from the physical examination or other eligibility requirements sometimes required for standalone or life insurance policies. Because the coverage is guaranteed by the federal government, and subsidized by Medicare, premiums remain at a fairly fixed point for all seniors based on the type of plan chosen. Seniors who are already involved in a Medicare Advantage or Medigap plan can choose to retain their prescription coverage, rather than participating in the Medicare Part D Enrollment process.