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Medicare Part D: How To Decide Whether To Take Medicare Part D

If You Have Drug Coverage (Creditable Coverage)

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If existing drug coverage is at least as good as the coverage provided by Medicare Part D, it is known as "creditable." So long as you have creditable coverage, there is no penalty for delaying purchasing drug coverage.

Creditable coverage can come through your own policy (either on your own or through a group such as an employer) or a spouse's coverage. Tricare counts as creditable coverage. Medigap drug coverage doesn't count.

You'll know if your coverage is as good as Medicare Part D because you should receive a notice from the entity that supplies your current coverage which will tell you if what you have is as good as Part D coverage. It doesn't matter where you have your current coverage - including through an employer or a union. If you didn't receive a notice: call and ask for it. It must be provided to you in writing.

If you rely on the creditability of another plan, keep a copy of the notice with your Medicare file so you'll have it if you need it.

Some coverage which are known to be Creditable follow. If you have any of these coverages and decide in the future to take Mc drug benefit, there will not be any penalty.

  • VA benefits.
  • Tricare. Note that this is different from medical coverage under Tricare which sometimes requires that you have Part D. If Tricare is better, consider not purchasing Part D. If not, and you do purchase Part D coverage, Part D will pay claims first. Tricare will pay second like other secondary insurance. (To learn more, see: Coordination Of Benefits.)
  • Federal employee health benefits. Common wisdom is there is no reason to purchase Part D coverage if you have federal employee health benefits. If you are a federal retiree, and decide to purchase Part D, Part D will pay first. The federal plan will pay second. If you are a current employee, the federal plan pays first, and Part D pays second.

Creditable coverage is coverage that is at least as good as Medicare Part D.

If you know creditable coverage is about to end, start looking at what drug coverage is best for you. If you delay more than 62 days after the end of creditable coverage to obtain drug coverage, you will be subject to the penalty for late enrollment.


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