1. Who is eligible for a government-sponsored Prescription Drug Plan (PDP)?
Anyone with federal Medicare.
2. Do I have to be 65 to have a PDP?
While most people on Medicare are age 65 or older, Medicare is also extended to disabled people eligible for Disability Social Security.
3. Do I have to have both Parts A & B to be eligible for a PDP?
No. You may have only Part A of Medicare or both Parts A and B and be eligible for a PDP.
4. Is premium cost the most important consideration when choosing a PDP?
No. The most important considerations are formulary and coverage. You must make sure your drugs are covered under the formulary and then how they are covered. Formularies vary greatly from company to company. The value of a PDP is derived by calculating the total net expense of co-pays and premium. In other words, co-pays vary and so some plans may have lowered premium cost but higher co-pays for any given drug or vice-versa. It is the net cost you are interested in. A knowledgeable agent can help you with your calculations.
5. When should I enroll?
Your Initial Enrollment Period (IEP) should be simultaneous with your enrollment in Medicare.
6. Once I choose an insurance company is it hard to change?
No. Once a year you will be able to change. The Annual Enrollment Period (AEP) comes once a year. You are allowed to change plans in the last two months of each year with a January 1 effective date.
7. Why would I wish to change my insurance company?
A company may have increased its premium for your plan for the coming year or, even more importantly, the company may have deleted one or more of your drugs from their formulary. A company is allowed to change its formulary upon short notice.
8. What if my company deletes my drug(s) early in the year?
This is a problem. If it happens to you, you will have to wait for the next AEP to change to a company that covers your drug. We hope that competition will keep too many drugs from being dropped.
9. How can insurance companies provide drugs for such low premiums?
They can’t. The federal government subsidizes insurance companies on a per capita basis. Companies are given a certain amount of money for each insured enrolled in their PDP.
10. I don’t use much in the way of prescriptions now. Why can’t I wait and enroll later when I need it?
You can, but not without a penalty. This is an insurance pool and it is important to have people participate. Allowing you to wait until you will be a burden to the pool gives you unfair advantage. The government has established that you will be surcharged 1 precent a month of current premium for every month that you were eligible and not enrolled. You will pay that surcharge as long as you have a PDP.
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