What is Creditable Drug Coverage?

Published by: Medicare Made Clear

Creditable Drug Coverage

Medicare defines “creditable coverage" as coverage that is at least as good as what Medicare provides. Therefore, creditable drug coverage is as good as or better than Medicare Part D.

 

 

Why Creditable Drug Coverage Matters in Medicare

 

Creditable drug coverage matters because it may allow you to delay enrolling in Medicare and avoid the Part D late enrollment penalty. The penalty is charged if you enroll in a Medicare Part D plan after your Initial Enrollment Period (IEP) ends and don’t qualify for an exception.

 

The Part D penalty can sneak up on you if don’t know the rules. Here's a summary of what you need to do to delay Part D enrollment without penalty:

 

  • Make sure you can qualify for a Medicare Special Enrollment Period.
  • Get a written "notification of creditable coverage" from your previous plan.
  • Enroll in a Part D plan within 63 days of losing or leaving your former plan and/or the former creditable drug coverage.

 

Typically, this situation is seen most for people who plan to keep working past 65. If you are working past age 65 and plan to delay Medicare enrollment, talk with your employee benefits administrator. He or she can tell you if your employer plan provides creditable drug coverage.

What to Know About Medicare Part D When Still Working

How Much is the Medicare Part D Late Enrollment Penalty?

 

The late penalty for Medicare Part D is an additional 1 percent of the premium amount for each month you’re late. You pay the penalty for as long as you have Part D.

 

For example, you enroll in a Part D plan that starts on November 1 but your IEP ended on June 30. As a result, you are four months late signing up for Part D.

 

Your Part D penalty would be 4 percent of the premium because you signed up four months late.

 

 

How to Get Medicare Part D Coverage

 

You can get Medicare prescription drug coverage in a stand-alone Part D plan or as part of a Medicare Advantage plan (Part C). Private insurance companies offer the plans under contract with Medicare.

 

You will need to have Part A and/or Part B to get a stand-alone Part D plan, and you will need both Parts A & B to get a Medicare Advantage plan.

Shop Prescription Drug Plans

 

Learn more about prescription drug coverage and shop Part D plans in your area.

Medicare Made Clear

Get to Know Medicare

Medicare Made Clear is brought to you by UnitedHealthcare to help make understanding Medicare easier. Click here to take advantage of more helpful tools and resources from Medicare Made Clear including downloadable worksheets and guides.

Medicare Made Clear

 

Whether you're just starting out with Medicare, need to brush up on the facts, or are helping a loved one, start your journey here.

 

Introduction to Medicare 

Get the Latest

 

Boost your Medicare know-how with reliable, up-to-date news and information delivered to your inbox every month.

Sign up now

Related Articles

Explore More Medicare Topics

Benefits & Coverage

Working Past 65

Medicare Costs

Medicare Tips & FAQs

Shopping for Medicare

Eligibility & Enrollment

Find a Plan

Call Us

Call UnitedHealthcare at FED TFN, TTY 711 (toll-free)

 

Hours: 8 a.m. – 8 p.m.

7 days a week

Call UnitedHealthcare at MEDSUPP TFN, TTY 711 (toll-free)

 

Hours:

7 a.m. to 11 p.m. ET,

Monday – Friday

9 a.m. to 5 p.m. ET, Saturday

Meet with Us

Make an appointment with a licensed insurance agent/producer in your area