Prescription Drug Plans, also known as PDP or Medicare Part D are drug coverages that private insurance companies offer to eligible people. Original Medicare Part A & B and Medigap do not provide drug coverage, therefore a Stand-Alone PDP is available for purchase. However, if a person decides not to purchase a PDP and does not have credible drug coverage, he or she will be subjected to a penalty.
Part D penalty example:
- For every month when you don’t have a credible drug coverage, a penalty of 1% of your monthly premium will be added once enrolled to a Part D
- 2022 PDP National Base Premium = $33.06/mo
- 1%of $33.06 = $0.3306
- Multiply $0.3306 by the number of months you are late enrolling ($0.3306 x 10)
- 2022 Part D Penalty = $3.31/mo rounded to the nearest 10 cents – $3.30/mo
Who can sign up for PDP:
- Have acquired Part A & B.
- Not currently on a MAPD plan.
What does Part D covers:
- Generic Drugs
- Refills
- Quality
- Usage
- Tier 1, 2, 3, and 4. (Higher tiers have higher copayments)
When can enroll into a PDP Plan:
- IEP (Turning 65)
- AEP (Annual Election Period)
- SEP (Special Election Period)
A list of drug formularies and further information can be found at Medicare.gov.
