You can only enroll in Medicare Part D during certain times. Knowing about these times and when you can switch plans is important. We’ve compiled the most useful information about the process, including when you can enroll, when you can switch plans, penalties you may incur and your options if you already have prescription drug coverage.
Topics on this page:
- Enrollment Periods
- Penalties if You Don’t Enroll in a Part D Plan
- When You Can Switch Part D Plans
- If You Already Have Prescription Drug Coverage
- How to Enroll in a Part D Plan
If you have not enrolled in a prescription drug plan (PDP) and you do not have creditable coverage for your prescriptions, you may enroll in a PDP during the Annual Election Period (AEP). This period is from October 15 through December 7 each year. Coverage begins the following January 1.
For people who are new to Medicare, the Initial Enrollment Period (IEP) for Part D is 7 months long. It begins 3 months prior to the month you become eligible for Medicare Part A or B, includes the month you become eligible and ends 3 months later.
Note: Depending on your situation, you may have other limited opportunities to enroll in a Part D plan. Contact your local Health Insurance Counseling & Advocacy Program (HICAP) office for more information.
If you do not enroll in a plan and do not have creditable coverage for your drugs, you will incur a penalty of 1% of the average national premium (approx. $32.01 in 2020; this figure changes each year) for every month you were eligible and did not enroll. This amount is added on to your drug plan premium. Note: Medicare waives this penalty for anyone who qualifies for Extra Help, also known as the Low-Income Subsidy (LIS) program.
In addition, if you do not enroll into a Part D plan when you are first eligible, you will generally only be able to enroll during certain enrollment periods.
In general, you may only switch plans during the Annual Election Period (AEP). This is between October 15 and December 7 each year. Coverage begins the following January 1. Outside of the AEP, you may change plans if you have a Special Election Period (SEP), such as if you:
- Move to another region outside the service areas of your plan
- Enter a nursing home
- Change nursing homes or other institutions
- Qualify for the extra help/Low-Income Subsidy (LIS) program (you may change plans once a quarter for the first 3 quarters, and once during the Annual Election Period)
- Lose your eligibility for extra help/LIS (you may change plans during the 2 months beginning the month you receive notice)
- Lose your full Medi-Cal benefits (you have a 3-month period to change MA-PD or Part D plans, starting the month you are notified of the loss of Medi-Cal eligibility)
If you already have creditable prescription drug coverage, you may be able to keep it without the risk of paying a late enrollment penalty if you decide to enroll in a Medicare prescription drug plan later.
Your options differ, depending on which type of existing drug coverage you have:
- Current employer plan, union plan or retiree plan
- TRICARE, Department of Veteran’s Affairs (VA) or the Federal Employee Health Benefits (FEHB) Program
If you are covered by a current employer, union or retiree plan and are about to become eligible for Medicare, you should receive a notice from the company explaining how your benefits will change and what your options are regarding Medicare Part D. If you are about to become eligible for Medicare and have not received a notice or did not understand the notice you received, call your former employer or the company that processes your claims.
If at some point in the future your employer, union or retiree plan stops offering prescription drug coverage, you will be able to join a Medicare drug plan without penalty as long as you join that plan within 63 days of the end of your current coverage.
Note: Keep any letter or notice from your employer, union or retiree plan stating that your prescription drug coverage is creditable to use for documentation if you apply for Part D drug coverage at a later time.
If you are newly eligible for Medicare and your employer, union or retiree plan has determined that your current prescription drug coverage is not creditable and you want to join a Medicare drug plan, you must join during your Initial Enrollment Period (IEP).
Note: If you drop your employer, union or retiree plan coverage, you may not be able to get it back. In addition, you may not be able to drop your current drug coverage without dropping all of your health coverage.
Talk to your plan’s benefits administrator to get more information. If your benefits are not creditable, you may still be able to:
- Keep your current drug plan and join a Medicare drug plan for more complete coverage.
- Keep your current drug plan without the Medicare drug benefit (you will need to pay a penalty if you join a Medicare plan after your IEP).
- Drop your current coverage, return to the Original Medicare plan and join a Medicare prescription drug plan.
- Drop your current coverage and join a Medicare Advantage plan or other Medicare health plan that covers prescription drugs.
If you are covered by TRICARE, Department of Veteran’s Affairs (VA) or the Federal Employee Health Benefits (FEHB) Program, you will be happy to know that all 3 programs offer creditable drug coverage. As long as you continue to qualify for TRICARE, VA or FEHB benefits, you should be able to keep the coverage you have. If you are thinking of making any changes, contact your benefits administrator first.
Note: It will almost always be to your advantage to keep your current coverage. If you lose your TRICARE, VA or FEHB coverage and want join a Medicare drug plan, you most likely won’t need to pay a penalty as long as you join within 63 days of losing your coverage.
You can enroll in a Part D plan in several ways:
- Visit medicare.gov
- Call a Part D plan directly
- Call 1-800-MEDICARE
Only you or your authorized representative may enroll you in a prescription drug plan.
For more information, see Prescription Drug Resources.