Medicare provides prescription drug coverage for people who are eligible for Medicare. This includes people who are eligible for Medicare alone and people who are eligible for both Medicare and Medicaid. "Dual eligibles" is a term used to refer to people who are eligible for both Medicare and Medicaid.
The following information about Medicare prescription drug coverage focuses on people who are dual eligibles. The information is from the Centers for Medicare & Medicaid Services (CMS), and is current as of March 16, 2023.
Prescription Drug Coverage: Basic Information
What is Medicare prescription drug coverage?
Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area as well as at participating mail order pharmacies. It is especially important if you have very high drug costs or from unexpected prescription drug bills in the future.
Who can get Medicare prescription drug coverage?
Everyone with Medicare is eligible for prescription drug coverage, regardless of income and resources, health status, or current prescription expenses. There are two main categories of people eligible for Medicare.
• People who are 65 or older are automatically eligible for Medicare.
• Anyone whom the Social Security Administration rules is disabled, becomes eligible for Medicare after receiving 24 months of disability payments.
How does Medicare prescription drug coverage work?
Your decision about Medicare prescription drug coverage depends on the kind of health care coverage you have. There are two basic ways to get Medicare prescription drug coverage.
• You can join a Medicare prescription drug plan. This sort of plan is called a Medicare Part D plan. To join a Medicare Part D plan, you must have Medicare Part A or Part B, and you must live in the service area of the plan you want to join.
• Or, you can join a Medicare Advantage Plan or other Medicare Health Plan that offers prescription drug coverage. To join a Medicare Advantage Plan, you must have Part A and Part B. Not all of these types of plans, however, offer prescription drug coverage.
Like other insurance, if you join, generally you will pay a monthly premium and a yearly deductible. You will also pay a part of the cost of your prescriptions, including a co-payment or co-insurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. If you have limited income and resource and you qualify for the Extra Help program, you may not have to pay a premium or deductible. See below for information on Extra Help.
When can I get Medicare prescription drug coverage?
You may sign up when you first become eligible for Medicare.
If you are eligible for Medicare because of your age, you may sign up for prescription drug coverage from three months before the month you turn age 65 until three months after you turn age 65. If you get Medicare due to a disability, you may sign up for prescription drug coverage from three months before to three months after your 25th month of cash disability payments. In both of these cases, if you sign up early before you are actually covered by Medicare, the prescription drug coverage will not become effective until your Mediare coverage begins.
If you don't sign up when you are first eligible, you may pay a penalty. This penalty may continue as long as you have prescription drug coverage.
But if you qualify for Extra Help, then, there is no penalty and you can sign up for prescription drug coverage at any time.
The annual Medicare open enrollment period is October 15 through December 7. For most people on Medicare, this is when you can change your prescription drug plan. If you make a change during this period, your new coverage will begin on January 1.
However, if you are eligible for both Medicare and Medicaid or if you qualify for Extra Help, then you may join, switch, or drop Medicare Advantage or Medicare prescription drug coverage at anytime.
Why should I get Medicare prescription drug coverage?
Medicare prescription drug coverage provides peace of mind by protecting you from unexpected drug expenses. Even if you do not use a lot of prescription drugs now, you should still consider joining. As we age, most people need prescription drugs to stay healthy. For most people, joining now means protection from unexpected prescription drug bills in the future.
What if I have limited income and resources? Can I get help in paying for Medicare prescription drug coverage?
Medicare has a special program called Extra Help; the program is also called the Low Income Subsidy (LIS). This program is for people with limited income and resources. If you qualify for Extra Help, Medicare will pay for almost all of your prescription drug costs.
For 2023, you may qualify for Extra Help, if you meet the following requirements:
• Your income is not more than $21,870 (if you are single) or not more than $29,580 (if you are a married couple and living together with no dependents).
• Your resources are not more than $16,660 (if you are single) or not more than $33,240 (if you are a married couple living together with no dependents).
o Resources include things like your bank accounts, stocks, bonds, IRAs, and mutual funds.
o Resources do not include your home or car, life insurance policies, burial plot, and up to $1,500 per person for burial expenses.
If you qualify for Extra Help and join a Medicare drug plan, you will get the following:
• Help paying your Medicare drug plan’s monthly premium, any yearly deductible, coinsurance, and copayments.
• No coverage gap.
• No late enrollment penalty.
Depending on the amount of your income and resources, you will qualify for full (greater) or partial (somewhat lesser) Extra Help benefits.
You automatically qualify for Extra Help if you have Medicare and meet one of these conditions:
• You have full Medicaid coverage.
• You get help from your state Medicaid program paying your Part B premiums (in a Medicare Savings Program).
• You get Supplemental Security Income (SSI) benefits.
If you automatically qualify for Extra Help, you will generally receive the benefits automatically or receive information on how to apply.
If you automatically qualify for Extra Help and are not receiving Extra Help or if you think you may qualify, you should apply.
How Do I Apply for Extra Help?
It is easy to apply for Extra Help. Just complete Social Security's Application for Extra Help with Medicare Prescription Drug Plan Costs (form SSA-1020). Here's how:
• apply online at www.socialsecurity.gov/extrahelp;
• call Social Security at 1-800-772-1213 (TTY1-800-325-0778) to apply over the phone or to request an application; or,
• apply at your local Social Security office.
After you apply, Social Security will review your application and send you a letter to let you know if you qualify for Extra Help. Once you qualify, you can choose a Medicare prescription drug plan. If you do not select a plan, the Centers for Medicare & Medicaid Services (CMS) will do it for you. The sooner you join a plan the sooner you begin receiving benefits.
Iowa Legal Aid provides help to low-income Iowans.
To apply for help from Iowa Legal Aid:
- Call 800-532-1275.
- Iowans age 60 and over, call 800-992-8161.
- Apply online at iowalegalaid.org
If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer” A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
*As you read this information, remember this article is not a substitute for legal advice.