Medicare drug coverage (Part D) and Medigap

Health insurance can be complicated and confounding as there are a number of insurance benefits which seem to be all the same. It is also difficult to decide which policy to opt for. It takes a lot of time, effort and patience to decide on one plan. Then the confusion comes relating to policies which seem to be offering the same benefits and will overlap each other.

Medicare Plan D

Most of the Medicare policies and the Medicare advantage plans are standardized and there might confusion regarding which Medicare policies to opt for. Fortunately, most of the policies that may have overlapping benefits are mutually exclusive, like the Medigap policy and MedicareAdvantage plan are mutually exclusive. In the same way, a person with a Medigap policy with prescription drug coverage cannot join the Medicare prescription drug plan which is also known as the Medicare Plan D.

If the insured is already enrolled into Medigap policy with prescription drug coverage than the insurance company providing with the Medigap insurance needs to be informed about the same if the insured decides to go for Medicare Plan D. The premium will be adjusted if the prescription drug coverage is removed from the Medigap plan. Keep in mind that if the coverage once removed from the Medigap policy cannot be changed back.

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In case of the change in policies, the insurance company providing the Medicare advantage plan needs to send a notice stating that the prescription drug coverage is creditable which might be helpful in case the insured decides to join a Medicare drug plan later. The Medigap policies can either have creditable drug coverage or not. If the Medigap policy has creditable prescription drug coverage than the insured can join the Medicare Plan D only during the period between 15th of October to 7th of December. The only case where the insured can join the Medicare Plan D outside this period if they lose the Medigap policy due to cancellation by the company and if it is non-renewable. In case of Medicare advantage plans  without the creditable drug coverage and plans to join a Medicare prescription drug plan later on then the insured might have to pay a late enrollment fee which means that the premium for the same policy will be higher and it keeps on increasing with each month it is put off and needs to be paid till the insured has a Medicare drug plan.