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Medicare Part D helps you pay for your prescription drugs. Because Part D is a government program, the Centers for Medicare and Medicaid Services (CMS) closely oversee every aspect of the program. Every detail, from the drug list (also called the formulary) to how an insurance company sells its plans, is reviewed and approved by CMS.
Before an insurance company can sell Medicare Part D coverage, it must have its proposed benefits, premiums and the drug list approved by CMS. This makes sure the coverage follows federal guidelines and it protects you as a Medicare beneficiary.
To be eligible for Medicare Part D, you must:
If you are under 65 with a disability, you may also be eligible to enroll.
There are three periods during which you may enroll:
Initial Enrollment Period for Medicare Part D
Annual Enrollment Period for Medicare Part D
Special Enrollment Period for Medicare Part D
There are several special circumstances that would allow a Medicare-eligible recipient to enroll in a Medicare Part D plan outside of the initial or annual enrollment periods.
Some examples include, but are not limited to:
Medicare Part D Late Enrollment Penalty
If you choose not to enroll in a Medicare Part D plan at the same time you are eligible to enroll in Medicare Part A and/or Part B and you have not had creditable coverage for 63 continuous days or more, the federal government may impose a late enrollment penalty.
The penalty amount changes every year and you will be required to pay it as long as you have Medicare prescription drug coverage.
The penalty is calculated when you enroll in a Medicare drug plan. It is determined by multiplying 1 percent of the national base beneficiary premium for the current year by the number of full months you were eligible but didn't enroll in a plan. This number is rounded to the nearest ten cents and added each month to your Medicare drug plan premium for as long as you have a plan.
Late Enrollment Penalty (LEP) Example:
|$31.08||2012 national base beneficiary premium|
|x 12||Number of months eligible but not enrolled (example)|
|$3.72||Amount added each month to your premium|
This penalty may be assessed even if you choose later to enroll in a Medicare prescription drug plan during a required enrollment period, because it applies for every month in which you could have enrolled but did not. Because the national base beneficiary premium changes each year, your monthly penalty fee will too.
Utilization management is done on an individual basis by comparing a recommended prescribed drug to established guidelines and criteria, making sure that the course of treatment is appropriate.
A few examples of how utilization management is used in Part D plans include:
People with modest incomes and limited assets may qualify for extra help from various sources that can help to reduce expenses including the monthly premium, annual deductible and copayments. If you do qualify for extra help, you will not have a coverage gap, but you will have a small copayment or coinsurance. More information and forms are available on the Social Security Administration website .
You also may be eligible for Medicaid or your State Health Insurance Assistance Program (SHIP).