When it comes to prescription drug coverage, kupuna on Medicare have options. While most seniors get their prescription drug coverage through a Medicare Part D Plan or a Medicare Advantage Plan, some have other drug coverage available to them. These other options come in many forms, including employee or union benefits, Medicaid, or Veterans benefits. If you have other creditable* drug coverage, you may be wondering how they work with Medicare prescription drug coverage. Each type interacts differently, and we will provide some basic information in this article.
*creditable prescription drug coverage, or “creditable coverage”, is prescription drug coverage that on average pays at least as much as Medicare’s standard prescription drug coverage. In order to avoid a Late Enrollment Penalty (LEP), seniors must have creditable drug coverage or Medicare coverage.
As always, you can rely on your friendly Medicare agent at PBC to help you understand your Medicare drug coverage. Contact us today for FREE advice.
How Does Medicare Prescription Drug Coverage Work with Other Drug Coverage?
There are many different types of “other” drug coverage available to some seniors. This helpful list identifies the most common and how each interacts with Medicare coverage:
Employer or union health coverage
Probably the most common type of other drug coverage is coverage from an employer or union. This coverage is provided by your or your spouse’s current or former employer or union. Each year, your employer or union is obligated to inform you about whether this drug coverage is creditable. Before signing up for any other prescription drug coverage you should contact your benefits administrator to see if it will affect the coverage they are providing.
Medicare Supplement Insurance (Medigap) policy that includes prescription drug coverage
If you are grandfathered into an old Medigap policy that includes prescription drug coverage, you should make sure that it is creditable. If not, you will want to join a Medicare drug plan to avoid a LEP. Note that if you do join a Medicare drug plan, your Medigap insurance company is legally obligated to cancel the prescription drug coverage under your Medigap policy and reduce your premiums accordingly.
If you are on Medicaid, your drug costs are covered by Medicare as long as you join a Medicare drug plan. If you don’t choose a Medicare drug plan on your own, Medicare will enroll you in one, though you can switch to another plan whenever you want.
Supplemental Security Income benefits
If your Medicare premiums are subsidized by your state Medicaid program, you are automatically qualified for the Extra Help program to help with the cost of prescription drugs. You will need to join a Medicare drug plan for Medicare to cover your drug expenses but if you don’t sign up on your own, Medicare will enroll you in one.
Seniors who lose their jobs may have the option to sign up to continue their health coverage at full price through COBRA. If your plan includes creditable drug coverage you will be given a special enrollment period to join a Medicare drug plan without a penalty when your COBRA coverage ends. Talk with a Medicare agent to see if signing up for COBRA is the best option for you.
Long-term care facility
Long-term care facilities often have pharmacies that contract with Medicare drug plans to provide drug coverage to their residents. If you are moving into a nursing home, contact your Medicare agent to make sure that you have a Medicare drug plan that contracts with your long-term care facility's pharmacy.
Federal Employee Health Benefits (FEHB) program
This is creditable drug coverage offered to current and retired federal employees and their eligible family members. If you decide to sign up for Medicare drug coverage as well, you can keep your FEHB plan.
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
CHAMPVA provides health coverage to the spouse or widow and to the children of a Veteran who is “rated permanently and totally disabled due to a service-connected disability.” Beneficiaries receive a comprehensive health care program that shares the expense of covered health care services and supplies. While beneficiaries are entitled to sign up for a Medicare drug plan, they lose access to the Meds by Mail program.
Veteran’s benefits provide health coverage for veterans and people who have served in the U.S. military. While recipients are able to join a Medicare drug plan, they are prohibited from using both types of drug coverage for the same drug at the same time.
TRICARE (military health benefits)
Active-duty service members, military retirees and their families are eligible for a health care plan called TRICARE. Most recipients need Medicare Part B to keep TRICARE drug benefits. Joining a Medicare drug plan or a Medicare Advantage Plan with drug coverage are available options.
Indian Health Services (IHS)
The IHS provides access to health care services for American Indians living in Hawaii at the Ke Ola Mamo clinic in Honolulu. Seniors who qualify receive drugs through their local Indian health facility at no cost. Signing up for a Medicare drug plan or Medicare Advantage Plan with drug coverage is allowed and could help your Indian health facility because the plan reimburses the Indian health facility for the cost of your drugs.
No matter what other drug plan you are enrolled in, it’s important to keep any creditable prescription drug coverage information you get from your plan.
Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.
At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.