If you are eligible for Medicare, you might be thinking about prescription drug coverage. While most Medicare Advantage plans have Part D coverage, not all of them do. Also, Medigap coverage may not include Part D at all. Therefore, you may need help figuring out whether you need a Part D plan. Keep reading to learn more about Part D Medicare coverage, what it covers, and who needs it.

What Is Medicare Part D Coverage?

Medicare has four parts. Part A is hospital coverage. Part B is basic medical coverage for doctor visits and procedures. Parts A and B together are what most people think of when they hear the word Medicare. Part C is private insurance such as Medicare Advantage or Medigap plans. Part D is prescription coverage.

What Does Part D Cover?

Basic Medicare provides limited prescription coverage, and Part D fills in the gaps. Part D covers many common drugs, but usually with a copayment. Drug coverage is divided into four tiers. Part D bases the copayment on whether the drug is generic and brand name. Your plan will determine how much you pay in each tier.

Who Needs to Sign Up for Part D?

If you have Medicare eligibility, sign up for Part D promptly. The main exception to this rule is if you already have creditable drug coverage. Creditable drug coverage is if you have qualified coverage from another source. Examples of creditable coverage include:

• Military Tricare prescription coverage
• Employer-sponsored health plans
• Private Medicare Advantage plans
• Medicaid coverage
• State and local prescription coverage
• Union-sponsored health coverage

Even if you have one of these plans, it may still not qualify if they don't meet the government's minimum standards. They must cover at least as much as the standard Medicare plan. They must also have a low deductible and have no plan limits.

What Happens If You Don't Sign Up for Part D?

You aren't required to sign up for Part D even if you have Medicare. However, if you don't have creditable coverage, you could get penalties. You can save on penalties if you sign up during the initial enrollment periods. The penalties are based on how long you go without signing up. You pay your penalties as an additional cost to your Part D premium when you sign up later.

Medicare enrollment and gap coverage can be overwhelming if you are new to the system. You have so many choices and a limited amount of time to choose. Therefore, you may benefit from expert help and information. Contact a Medicare insurance agent for information about gap coverage and Part D plans.