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Carla Fried: The risks in passing up Medicare drug coverage

Carla Fried, on

Published in Home and Consumer News

If you have stopped working by age 65, or you are working for a firm that has fewer than 20 employees, you need to sign up for Medicare coverage right around your 65th birthday. There are two mandatory pieces you will sign up for. Part A covers hospitalization, and Part B covers just about everything else, with one big honking exception: prescription drugs.

Medicare Part D: prescription drugs

Medicare offers everyone the chance to have insurance to cover most (but not all) costs for many prescription drugs. But it’s not mandatory coverage, and you typically have to pay a monthly premium.

How Part D works:

If you have decided to enroll in Original Medicare for your Part A and Part B coverage, the premium cost to add a Part D prescription drug plan averages about $38 a month in 2021, according to the Kaiser Family Foundation.

If you didn’t go with Original Medicare and opted for Medicare Advantage (MA), you likely have a drug plan embedded in your MA plan. Many MA plans don’t charge any extra premium for the coverage, and for those that do, the cost averages around $12 a month. (A side note: That doesn’t necessarily make an MA plan a better deal for drug coverage. It depends on what your deductible, copays and coinsurance will be when you actually use the insurance.)


The risk of not adding Part D coverage

When you turn 65, whether you are working (and still covered by health insurance) or not, you should sign up for Medicare Part A. There’s no premium cost if you worked at least 10 years where you paid FICA payroll taxes.

If you’re not working at 65, or work for an employer with fewer than 20 employees, you will also want to sign up for Medicare Part B when you first become eligible. Medicare Part B comes with a monthly premium based on your income. The 2021 minimum per-person monthly premium: $148.50.

Once you enroll in Part B, you’re eligible for Part D. There are two risks to passing up your initial chance to enroll in Part D.


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