Introduction to Medicare Drug Plans

Medicare Drug Plans are a relatively recent addition to the list of plans that are available under Medicare. Medicare Drug Plans can be divided into two main categories; private companies manage both:

  • Medicare Advantage Plans that include prescription drug coverage.
  • Medicare Part D, Prescription Drug Plans that are attached to and work with Original Medicare.

Medicare Advantage Plans

Most Medicare Advantage Plans are run by private insurance companies and they are organized around either an HMO or PPO model. These plans cover Original Medicare Part A and Part B and sometimes they also include prescription drug coverage. When this is the case these plans are called MA-PD's. With an MA-PD all of your coverage will be bundled together into your Advantage policy. These policies can't be used with Medigap coverage. They also can't be used with Medicare Part D unless prescription drug coverage is not covered under the Advantage Plan.

Medicare Part D Plans

Medicare Part D, Prescription Drug Plans (PDP's) add coverage to Original Medicare Part A and Part B. Private insurance companies also run these plans. Part D plans take many different shapes. For example, some of these plans are organized as Medicare Medical Savings Account (MSA) plans.

There is a third type of prescription drug coverage that was previously offered through Medigap Plans. The Medigap Plans H, I and J that included drug coverage are no longer being sold but if you have one of these plans you can keep it or opt to have the Drug coverage removed and replaced by a Medicare Part D Plan. You will be able to keep the rest of the Medigap policy if you choose to do so.

Do I Qualify for Medicare Drug Coverage?

Anyone who has Original Medicare Part A AND Part B qualifies for a Medicare Advantage Plan that includes drug coverage (MA-PD). The easiest way to think about this is that you will need to meet the deadlines and requirements to join an Advantage Plan in order to get the drug coverage because it is included within the Advantage Plan. To join a prescription drug plan to supplement Original Medicare you must have either Part A OR Part B. Some people opt not to sign up for both Part A and Part B. Either way they can still get drug coverage.

Auntie Lou says, "If you have prescription drug and supplemental coverage through your retiree health plan check with their administrator before switching to Advantage or adding another drug plan.