What Medicare Part D Is and How It Connects to Your SSDI

Medicare Part D is the prescription drug coverage portion of Medicare. If you receive SSDI and are 65 or older, or if you have been on SSDI for 24 months, you become may be able to access for Medicare. Part D is optional — you choose whether to enroll — but it covers the cost of prescription medications through private insurance plans that Medicare approves.

Part D is separate from Part A (hospital coverage) and Part B (doctor and outpatient care). You can have Part A and Part B without Part D, but if you go without Part D coverage when you first become may be able to access and later want to enroll, you may pay a late enrollment penalty for as long as you have Medicare. That penalty is a percentage added to your monthly premium, calculated based on how many months you delayed enrollment.

The connection to SSDI is straightforward: your SSDI may be able to access triggers your Medicare may be able to access, and Part D becomes one of your coverage options at that point. You do not automatically get Part D — you must actively choose a plan and enroll in it.

Key Takeaways

  • You become may be able to access for Medicare Part D when you turn 65 or after you have been on SSDI for 24 months, whichever comes first.
  • Part D is optional, but enrolling late without a valid reason results in a permanent monthly penalty added to your premium.
  • You choose from multiple Part D plans offered by private insurance companies, and the plans, costs, and covered drugs change every year.
  • Part D covers most prescription drugs, but you pay a monthly premium, annual deductible, and copayments or coinsurance depending on the plan and the drug tier.
  • If your income is low, you may be able to get help paying Part D costs through the Low-Income Subsidy program, which has no asset limit.

When You Become may be able to access for Part D

You become may be able to access for Medicare Part D at one of two points: when you turn 65, or after you have been receiving SSDI for 24 consecutive months, whichever happens first. Most people on SSDI become may be able to access before age 65 because they have already been on the program for two years or more.

Your may be able to access does not start automatically. Social Security will send you a notice in the mail when you become may be able to access, usually about three months before your coverage can begin. That notice includes information about how to enroll and the important date for your initial enrollment period. Read it carefully, because missing the important date without a valid reason triggers the late enrollment penalty.

If you are already on Medicare Part A and Part B when you become may be able to access for Part D, you can enroll in Part D during the general enrollment period (January 1 through March 31 each year) or during your initial enrollment period. Your initial enrollment period is the seven-month window that includes the month you become may be able to access, plus three months before and three months after.

How to Choose and Enroll in a Part D Plan

Part D plans are offered by private insurance companies that contract with Medicare. Each company offers one or more plans, and the plans available to you depend on where you live. You can view all available plans, their costs, and which drugs they cover by visiting Medicare.gov or calling 1-800-MEDICARE.

When comparing plans, look at three main costs: the monthly premium (what you pay every month), the annual deductible (what you pay out of pocket before the plan starts paying), and the copayments or coinsurance (your share of the cost for each prescription). Plans are organized into tiers — generic drugs usually cost less than brand-name drugs, and specialty drugs (often for serious conditions) cost the most.

To enroll, you can go online to Medicare.gov, call 1-800-MEDICARE, or visit your local Social Security office. Enrollment during your initial period or during the annual open enrollment period (October 15 through December 7 each year) takes effect on the first day of the following month. If you enroll after your initial period without a valid reason, the late enrollment penalty applies.

What Part D Covers and What You Pay

Part D covers most prescription drugs, including brand-name and generic medications. However, each plan has a formulary — a list of covered drugs — and not every drug is on every plan's formulary. Before you enroll, check whether your current medications are covered by the plan you are considering.

Your costs work in stages. First, you pay the monthly premium. Then, you pay the annual deductible (usually between $0 and $545, depending on the plan). After you meet the deductible, you pay a copayment or coinsurance for each prescription. The amount depends on the drug tier: Tier 1 (generic) might be $5, Tier 2 (preferred brand-name) might be $25, and Tier 3 or higher (non-preferred or specialty drugs) might be $50 or more.

Once your out-of-pocket costs reach a certain amount (called the out-of-pocket threshold, usually around $7,050), you enter catastrophic coverage. At that point, you pay only a small copayment or coinsurance for the rest of the year, and Medicare and the plan split the remaining cost.

The Coverage Gap and How It Affects You

Between the point where you finish paying your deductible and the point where you reach catastrophic coverage, there is a coverage gap sometimes called the "donut hole." During this gap, you pay a higher percentage of the drug cost. The exact amount you pay depends on the plan, but it is typically 25 percent of the drug cost.

The coverage gap affects people who use many expensive medications. If you take only a few inexpensive drugs, you may never reach the gap. If you take several medications or specialty drugs, you might spend enough to enter the gap and then reach catastrophic coverage within a single year.

To understand whether the coverage gap will affect you, add up the cost of your medications for a year using the plan's formulary and cost-sharing information. Medicare.gov has a tool that lets you enter your drugs and see your estimated costs under each plan.

Getting Help Paying Part D Costs If Your Income Is Low

If your income is at or below 150 percent of the federal poverty line, you may be able to get help paying Part D premiums, deductibles, and copayments through the Low-Income Subsidy program (also called "Extra Help"). This program has no asset limit, which means you can have savings and still be may be able to access.

To explore for the Low-Income Subsidy, contact Social Security at 1-800-772-1213 or visit your local Social Security office. You can also explore online at ssa.gov. You will need to provide proof of income (such as recent pay stubs, tax returns, or a benefit statement) and information about your household size. Social Security will tell you whether you may have access to and, if you do, how much help you will receive.

If you receive the Low-Income Subsidy, you do not have to choose a plan yourself. Instead, Social Security assigns you to a plan in your area. You can request a different plan if you want, but you do not have to. The subsidy covers most or all of your premium and copayments, depending on your income level.

What Happens If You Change Plans or Drop Coverage

You can change Part D plans once per year during the annual open enrollment period (October 15 through December 7). The new plan takes effect on January 1. You can also change plans if you have a may have access to life event, such as moving to a different state, losing other drug coverage, or becoming may be able to access for the Low-Income Subsidy.

If you drop Part D coverage and later want to re-enroll without a valid reason, you will owe the late enrollment penalty. A valid reason includes losing other creditable drug coverage (coverage that is at least as good as Part D) or becoming newly may be able to access for the Low-Income Subsidy. If you have a valid reason, you can enroll without penalty during a special enrollment period.

Keep records of any other drug coverage you have, because you may need to prove it was creditable if you drop Part D and want to re-enroll later without a penalty.

Frequently Asked Questions

Do I have to enroll in Part D when I become may be able to access?

No, Part D is optional. However, if you go without Part D and later want to enroll, you will owe a late enrollment penalty for as long as you have Medicare unless you have a valid reason for the delay, such as having other creditable drug coverage.

What if my medication is not on my plan's formulary?

You can ask your doctor to request an exception from the plan, or you can switch to a different Part D plan during the annual open enrollment period. Some plans cover more drugs than others, so comparing formularies before you enroll helps avoid this problem.

Can I use Part D at any pharmacy?

Most Part D plans have a network of pharmacies where you pay the lower copayment or coinsurance. If you use an out-of-network pharmacy, you may pay more. Check your plan's pharmacy network before you enroll, especially if you have a pharmacy you prefer.

What if I cannot afford my copayments even with Part D?

If your income is low, the Low-Income Subsidy program can cover most or all of your copayments. You can also ask your doctor about generic alternatives, patient information programs run by drug manufacturers, or nonprofit organizations that help people pay for medications.

Does Part D cover over-the-counter drugs?

No, Part D covers only prescription medications. Over-the-counter drugs are not covered, though some plans may offer a small benefit for certain over-the-counter items if you receive the Low-Income Subsidy.