Senior Health Insurance Article

Medicare Part D Explained

Medicare Part D is a new drug benefit designed to help seniors pay for the cost of their prescription medications. The program is part of the Medicare Prescription Drug Improvement and Modernization Act of 2003.

Q: How do Medicare Parts A, B , C and D differ?

A: See below for details on the 4 parts of medicare.

Medicare Part A: Covers institutional services - most Medicare eligibles are automatically enrolled.

Medicare Part B: Covers professional services - requires enrollment and premium; beneficiary portion is typically deducted from the Social Security check.

Medicare Part C: Full replacement product (Medicare Advantage) for Medicare Part A and Medicare Part B - government pays private health plans what it estimates it would have paid for Parts A and B; beneficiary must enroll in Part B; any additional premium for Part C is collected by the Part C plan.

Medicare Part D: The new drug benefit designed to help seniors pay for the cost of their prescription medications.  With Part D, Medicare shares the cost of the prescription drug benefit with the retiree.

Q: How will the Part D program work?

A: Medicare will offer the Part D benefit by contracting with private companies, also referred to as Prescription Drug Plan Sponsors (PDPs) or Medicare Advantage Drug Plan Sponsors (MA-PDs). Medicare beneficiaries will have the opportunity to purchase the Part D benefit from a PDP in their area. This is similar to the process that Medicare used to offer the Medicare-approved drug discount card program.

Q: What are Medicare Part D’s key advantages?

A: The Medicare Part D benefit is expected to reflect the following:
1.  Access to a wide pharmacy network, including national chains as well as independent pharmacies
2.  Competitive discounts
3.  Point-of-sale drug claim processing
4.  Mail service
5.  Medical therapy management programs

Q: Who is eligible for the Part D drug benefit?

A: All individuals entitled to Medicare Part A or enrolled in Part B will qualify for Part D coverage. Ready to sign up for a Prescription Plan? Go to the Medicare Part D Prescription Overview.

Q: Will late penalties apply if customers do not immediately enroll in Medicare Part D?

A: A late penalty will apply when Medicare-eligible individuals without creditable coverage do not enroll in Part D during their initial enrollment period. This penalty was designed to encourage beneficiaries to sign up for Part D drug coverage at the youngest possible age, keep overall program costs more affordable and to remain consistent with the penalty used for delayed enrollment into Medicare Part B.

Q: Is enrollment in Medicare Part D mandatory?

A: In general, Medicare Part D is a voluntary prescription drug benefit and will not automatically be added to a customer’s Medicare benefits. However, individuals eligible for both Medicaid and Medicare will be automatically enrolled.

Comments and Questions

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  • Comment from Ron on March 06, 2016

    Please explain the reasoning used to penalize people who sign up for Medicare Part D late with a penalty fee? It seems to me that they weren’t using the plan before they enrolled, so why do they get penalized for not using the plan? How do they justify making you pay a penalty for something you weren’t using? Thanks in advance for your kind response.


    There isn’t a specific answer that we’ve seen as to why Part D late enrollees would be penalized. However, our best educated guess would be similar to the ACA mandate, that the only way to keep rates low is to have everyone enrolled, especially those that are healthy. With that said, we totally understand your frustration.

    -Amy from

  • Comment from don on December 15, 2015

    in 2010 I became a SSDI recipient, signed up for Medicare but not part D. Recently my one and only medication went from 64 a month to 104 per month, so I thought I would check on the prat D to help out. I signed up during the enrollment period and received a letter shortly after indicating I may not have had prescription drug coverage and would have to pay a penalty . So I called it figured out with premiums and late fees ( I think ). I have read why or the “idea” why the late fee is in place but why does a person have to pay that penalty for the rest of his/her life ?  Why wouldn’t the penalty be for just the time period they are adjusting for ?
    This is very unfair to punish someone for a lifetime for a year or two of non prescription drug coverage.

  • Comment from John L Tiss on December 02, 2015

    If a person having Medicare parts A & B lives to be 100 and never enrolls in Medicare part D, will this person
    be required to pay a penalty?  If so, when and how can it be paid? 


    You only pay a penalty for Part D if you were to enroll. If you were to never enroll, you would not be charged a penalty. If you do enroll, it will automatically be accrued and charged on your monthly bill.

    -Amy from

  • Comment from Rosalie on November 20, 2015

    I am currently enrolled in Humana Enhanced plan.Plan F.  Can I at this point change companies? My enrollment date with Humama was Oct 1, 2014.  this is my first year experience with part D. so am not sure if I can drop Humana at this date since my enrollment date was 10/01/2014.
    And I do have until Dec 7 to enroll in new company if I choose to do so?
    thank you,



    Good news! You can change your Medicare Part D plan every year during Open Enrollment. If you need help finding a plan, please call us at 800-930-7956.

    -Eric from

  • Comment from Judy Ross on October 24, 2015

    I do not understand why the above says that Medicare Part D is not mandatory, yet those who qualify for both medicare and medicaid are automatically signed up and thus would be required to pay the premium for this. 

    The above also says “A late penalty will apply when Medicare-eligible individuals without creditable coverage do not enroll in Part D during their initial enrollment period.” 

    So it seems that Medicare Part D is mandatory unless one has “credible coverage.”

    Please explain.


    We totally understand your confusion. While, technically it is not mandatory -meaning you are not required to have it, because your penalty is not owed at tax time and you would never owe a penalty if chose to never enroll- but if you decide to get a Part D plan down the line, and you did not have creditable coverage, that’s the only time your penalty would be applied. Hope this helps!

    -Amy from

  • Comment from Kim Grosso on December 09, 2014

    My mom is 81 and has been enrolled in Medicare since she was 63. Until 2013 she and my dad were getting their medications from Canada. When my dad passed away mom enrolled in Medicare Part D. Now she was notified by her secondary carrier that she owes a late fee of $285.90 and her monthly premiums will be $85.40. My mom lives on my Proceeds from my dads life insurance and has no monthly income other than social security. She cannot afford this premium. Does she have any recourse?


    Thank you for your question. We completely feel for your mother’s situation. However, since this is a very specific question and we would need more details please call us at 800-930-7956.

  • Comment from cathycollins on November 15, 2014

    we are on a HMO advantage plan which have the
    tiers for RX. If we max out and go into the donut
    hole how does part D benefit us? We live in New Mexico?


    Thank you for your question. While some enhanced prescription drug plans offer additional coverage in the donut hole, most will not. For 2015, if you hit the coverage gap you’ll pay 45% for brand name drugs, and 65% for generic drugs. However, to learn more about your plan’s benefits or to compare with other plans call 800-930-7956.

  • Comment from Jayne Mourino on November 15, 2011

    Medicare part D is very beneficial for individuals,I haven’t yet enrolled for any of them,kindly guide me on the procedure to do it.

  • Comment from bravo hogg on November 09, 2011

    As per my point of view everybody have to take medicare because nobody knows when the bad things happened with them.thanks

  • Comment from Drew Bitsko on November 09, 2011

    Heya thanks for sharing this information…have been researching all over yahoo and google and could not really locate a decent content about this Part D.

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