Part D of Medicare is your prescription drug coverage. CMS (Centers of Medicare and Medicaid Services) says that anyone who is 65 years or older should start their part D during their initial enrollment period. Many of our clients ask “well I do not take any prescription medications, why do I have to get that coverage?”. The simple answer is so you do not get penalized if there comes a time when you do want to add Part D. CMS controls that penalty and it has nothing to do with the insurance companies, however they are the ones that will end up having to bill you.
There are 2 ways you can avoid this penalty, and either way is quite easy and not very expensive.
IF you are still employed and your employer offers CREDIBLE drug coverage, you do not have to get Part D initially nor will you suffer from a penalty as long as you get a Prescription plan as soon as you retire or if the employer coverage becomes non-creditable. This information can be obtained from your HR department at work. As you approach Medicare age, please do your due diligence to make sure your employer coverage is credible according to the CMS guidelines.
Now, how can you avoid the dreaded penalty? One way is to sign up for a Medicare Advantage plan or MAPD. This plan has your drug coverage attached to it. As I have mentioned before most Advantage plans come with a zero monthly premium and can include drug coverage. What if you do not want an Advantage plan and you would like to take what is called the original Medicare route? That is ok and there is also a way to avoid the penalty this way as well. If you chose to get a Medicare Supplement, you will need to purchase a stand alone drug plan. There are some drug plans that have a very low monthly premium and with that it gives you the peace of mind and coverage you need, even if you do not necessarily need that coverage during your initial enrollment period.