If you have Medicare, you are eligible for Medicare prescription drug coverage, also known as Medicare Part D. It’s an optional addition to your healthcare coverage that normally would have required you to pay an additional monthly premium.
But if you received a yellow Medicare Part D Auto-Enrollment Notice, your Part D membership may be free!
Then, you may automatically qualify for the Medicare Part D Extra Help program.
If this is the case, you’ll receive a Part D auto-enrollment notice (also known as CMS Product No. 11154). This yellow letter is sent to inform you that you meet the auto-enrollment requirements and will be enrolled in a pre-selected Medicare Prescription Drug Plan unless you decide to join a plan on your own.
The automatic enrollment notice lets you know:
- Information about the plan you’ll be enrolled in automatically
- A list of other Medicare Prescription Drug Plans available to you and
- A list of frequently asked questions and answers about your Medicare prescription drug coverage
What is Extra Help?
Extra Help is a federal program that helps pay for out-of-pocket costs related to a Medicare prescription drug coverage plan. It is also known as the Part D Low-Income Subsidy (LIS) and it is estimated by the Social Security Administration to be worth about $5,000 per year.
Applicants can qualify if their income and assets fall under certain limits. Assets include savings, investments, and real estate (other than your home). (For a more exhaustive list, read this guide from the Social Security Administration). In 2019, eligible individuals could earn no more than $18,735 annually and own no more than $14,390 in assets; for couples, it was $25,365 for income and $28,720 for assets.
To find out if you qualify for Extra Help, you’ll need to file an Application for Extra Help with Medicare Prescription Drug Plan Costs through the Social Security Administration. They’ll need to know the value of your income and assets. If you’re married and living together, you’ll also need to provide information about you and your spouse.
However, if you’re enrolled in Medicaid, Supplemental Security Income, or a Medicare Savings Program, you automatically qualify for Extra Help and don’t need to apply to be a part of the program.
What Does Extra Help Cost?
If you qualify for the Extra Help program your monthly premium and deductibles for Medicare Part D will be reduced or eliminated. However, you may still be responsible for copayments for prescriptions covered by your plan.
What Do You Do If You Receive The Medicare Part D Auto-Enrollment Notice?
You should take the time to call the assigned Medicare drug plan to get information about your new drug coverage.
It’s possible that the plan may not cover all of your prescriptions or isn’t accepted at the pharmacy you use. If that’s the case, you may want to find a plan that better suits your healthcare needs.
You can find a list of alternative Medicare-approved plans included with your Part D Auto-Enrollment Notice.
What If You Want to Switch Part D Plans on Extra Help?
If you decide that the plan that was selected for you isn’t the right plan for you, you can — and should — switch to a plan that provides you with the coverage you need.
Since you qualify for Extra Help, you’re not limited to a single enrollment period. You can join, switch or drop your Medicare Part D coverage one time during each of the following periods:
- January – March
- April – June
- July – September
Any changes you make will go into effect on the first day of the following month. If you are unhappy with this switch, you’ll have to wait until the next period to make another change.
If you’d like to make a change from October through December, you’ll have to do it during Medicare’s standard Open Enrollment Period, which is October 15 – December 7. Any changes made during that time will go into effect on January 1.
To switch to a different Medicare Part D plan, call the new provider to find out their requirements to join. Once you’ve successfully enrolled in a new plan, you don’t need to do anything else. You’ll be automatically disenrolled from your current plan. Your coverage will switch over at the beginning of the next month.
What If You Have Other Prescription Drug Coverage?
If you have (or are eligible for) another type of prescription coverage, it’s important to talk to your current plan provider to learn how joining a Medicare Drug Plan may affect your current coverage.
You may find you don’t need a Medicare Drug Plan. Or, in a worse case, you and your dependents could completely lose prescription drug coverage if you do switch plans.
If you’re part of an employer or union plan and get the Retiree Drug Subsidy (RDS), you won’t be automatically enrolled in a Medicare drug plan, even if you meet the requirements. Instead, you’ll receive a notice letting you know that you qualify for Extra Help that explains your options.
What If You Decide To Decline Medicare Part D Coverage?
You have the option to decline a Medicare Drug Plan completely. If you decide that you don’t want either the plan Medicare has selected for you or any other Medicare Drug Plan, you need to call Medicare and tell them you’d like to decline prescription drug coverage.
It’s important to note that you must have a drug plan for insurance to help pay the cost of prescribed medications. So if you need prescription drugs and don’t have Medicare drug coverage, you would have to pay the full price yourself.
If you decline Medicare Part D coverage but then change your mind, you can re-enroll. As long as you are eligible for Medicaid, you can join a Medicare drug plan at any time throughout the year, without facing a late enrollment penalty for Part D. But, if you lose your Medicaid eligibility, you may have to pay a penalty to rejoin.