Medicare Drug Plan: What It Is, How to Use It

Some plans will charge you a premium, while others won't.

In both cases, insurers offering Medicare prescription drug coverage are required to provide at least the minimum standard benefit mandated by the Medicare program.

How Will Medicare Part D Affect My Other Coverage?

This new Medicare benefit will impact other existing coverage options. Keep in mind a few things.

If you have employer or union retirement coverage that is considered to be at least as good or better than the Standard Medicare Prescription Drug Benefit (or so-called "creditable" coverage), chances are you'll want to stick with it. However, the Part D benefit gives all seniors a chance to consider alternatives to how they pay for their medications.

Contact your former employer's or union's benefits administrator to determine whether it is "creditable," if you're not sure. If it is and you decide to enroll in Part D later, you won't face a late fee or higher premium. Keep in mind, though, that if you drop your current drug coverage, you may not get it back.

If you currently own one of the Medigap policies that includes prescription drug coverage -- H, I or J -- you have several options. While you can retain the policy as-is, the prescription drug coverage is not considered to be as good as the new Medicare benefit. You can choose to keep the policy, but have the prescription drug benefits removed and your premium lowered. Another option: switch to a different Medigap policy (A, B, C or F) without additional underwriting, if offered by your insurer. In these last two cases, you can also enroll in a plan offering Medicare prescription drug coverage.

If your state has and will continue to support a State Pharmacy Assistance Program, you could be eligible for assistance to help you with the out-of-pocket costs Medicare's new prescription drug program does not cover. With Medicare's new Part D benefit, states with such assistance programs have redesigned these programs.

However, no two states' programs are alike. For example, one state may help qualifying residents to cover some of the monthly premiums they might face when enrolling in a drug plan. Another state may help pay for drugs only after a senior pays a certain amount out of pocket for them.

Check out the National Conference of State Legislatures state pharmacy assistance resource to find out more, or contact your State Pharmacy Assistance Program.

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