Medicare part D is the newest iteration of the Medicare program having been implemented in 2003. Part D covers prescription drug costs subject to certain limitations and copayments. However, there is still some confusion about how part D works.
Medicare part D is optional for Medicare recipients. Therefore, some may choose to sign up for part D when they turn age 65 and become eligible for the traditional Medicare part A & B. The cost for part D is based on the recipient’s income and the cost of the plan that they select. The part D premium can range from $0 to $72.90 per month with most people paying just $12.70 per month. However, because Medicare part D is optional, some people, especially those who are not using costly prescription drugs, choose to forego signing up when they become eligible for Medicare coverage.
The decision to forgo Medicare part D should not be taken lightly. While a Medicare recipient may not have a need for prescription drug coverage when they sign up for Medicare, they may find that they do need the coverage later in life. However, those who enroll in Medicare part D after their initial eligibility will be subject to a penalty. The penalty is 1% of the premium amount for each month that the individual was eligible but not enrolled in the program. This penalty can significantly increase the cost for those who wait until they need prescription to sign up for the benefits.
If you are eligible for Medicare and are weighing your options, it is important to think about future, as well as current, coverage needs. This may include signing up for Medicare part D in anticipation for high prescription costs in the future.