Mr. Landry is approaching his 65th birthday. He has signed up for Medicare Part A, but he did not enroll in Part B because he has employer-sponsored coverage and intends to keep working for several more years. But he is considering enrolling in Part D prescription drug coverage because he believes it is superior to his employer plan. How would you advise him?
The Correct Answer and Explanation is:
Correct Answer:
Mr. Landry can enroll in a Medicare Part D plan even if he chooses not to enroll in Part B, as long as he is enrolled in Part A. However, he should compare the costs and coverage of the Medicare Part D plan with his employer-sponsored drug coverage. If his employer plan is creditable coverage (i.e., as good as or better than Medicare Part D), he may not need to enroll in Part D immediately to avoid penalties later.
Explanation
Medicare Part D is the prescription drug coverage portion of Medicare, available to anyone who is enrolled in either Medicare Part A or Part B. Since Mr. Landry has Medicare Part A, he is eligible to enroll in a standalone Part D plan.
However, he also has employer-sponsored health insurance, which includes prescription drug coverage. The key question here is whether his employer’s drug coverage is creditable. “Creditable coverage” means that the employer plan provides prescription benefits that are expected to pay, on average, as much as the standard Medicare Part D plan.
If Mr. Landry’s employer coverage is creditable, he does not need to enroll in a Part D plan right now, and he will not incur a late enrollment penalty if he decides to sign up for Part D later—after he retires or loses the employer coverage. His employer is required to provide an annual notice indicating whether the plan is creditable, so he should check this documentation.
However, if his employer coverage is not creditable, and he delays enrolling in Part D, he may face a late enrollment penalty later when he eventually signs up.
Since Mr. Landry believes that Medicare Part D may offer better benefits than his employer plan, he should closely compare the cost, formulary, pharmacy network, and coverage rules of both options. If Part D is indeed better for his medication needs and cost-effective, enrolling now could be a smart choice, even while keeping his employer coverage.
