As you plan your transition to Medicare, it’s important to know your options when it comes to prescription drug coverage. To ensure that all Medicare beneficiaries are covered equally, the Centers for Medicare and Medicaid Services sets minimum standards for drug plans.
But what are the minimum standards, and how will they affect you as you prepare for Medicare?
Medicare sets minimum standards for prescription drug coverage. These standards give a baseline for coverage that all Medicare plans (including Medicare Advantage and prescription drug plans) must meet or exceed.
Benefits provided through a union or employer may also stand in for Medicare plans, as long as they meet Medicare’s minimum standards. Essentially, other benefits must be similar enough to Medicare to be considered a good alternative. This is called creditable coverage.
For a private insurance plan to provide creditable coverage, it must pay, on average, at least as much as Medicare’s standard prescription drug coverage. Creditable coverage may be offered through:
If you have creditable drug coverage through any of the sources above, you can keep it when you enroll in Medicare. You should receive a Notice of Creditable Coverage in the mail confirming this.
Even with creditable drug coverage, your steps to prepare for Medicare can vary based on your retirement plans.
Verify what benefits will carry over once your working status changes. If you qualify for prescription drug coverage, you will receive a notice in the mail.
Do not let your coverage lapse—then you may have to pay the Part D late enrollment penalty. This will make your Medicare coverage permanently cost more.
If you need coverage in the time between your retirement date and your Medicare eligibility, you can enroll in an individual health insurance plan. Our advisors can help you find a plan that’s right for you.
If your employer has 20 or fewer employees, you are required to enroll in Medicare when you become eligible.
You have options if you work for a larger organization. Typically, Medicare is more cost-effective than your employer coverage and you can enroll in Medicare without retiring.
As you plan to enroll in Medicare, check about creditable coverage through your employer. How do your employer’s coverage options compare to a Medicare Advantage Prescription Drug (MAPD) or standalone prescription drug plan? Do you have the option to pair your employer benefits and Medicare?
Our advisors can help you answer all of these questions. Contact us to schedule a review of your Medicare plan options compared with your current coverage. We’ll make sure you understand what is available to you and feel confident in your coverage decision.
As you enroll in Medicare, you can keep your creditable prescription drug coverage through your employer. If you do not have creditable drug coverage and choose to enroll in a Medicare drug plan, you will avoid a lifetime late enrollment penalty.
We recommend contacting our local advisors for advice on your specific situation. We’ll get to know your needs and help you plan your next steps, all at no cost to you. You can reach us at 937.915.3563 or schedule a call here.
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