Medicare Part D: Prescription drug benefit
Medicare offers prescription drug coverage under Part D for everyone with Medicare. But to get Medicare drug coverage, you must take the initiative and join a Medicare drug plan.

Medicare drug plans are run by insurance companies and other private companies Medicare approves. Each plan varies in cost and drugs covered. Even if you don't take a lot of prescription drugs now, you still should consider joining a Medicare drug plan because if you decide not to join such a plan when you are first eligible, you will pay a late-enrollment penalty if you choose to join later. The penalty is 1 percent of the monthly premium for each month you don't enroll and is applied to all future monthly premiums.

"Although there will be a number of seniors out there who don't take any prescription drugs right now and who'll view paying for prescription drug insurance as kind of a waste, they also need to think about the future," says Clark Howard, consumer-advice talk-show host and author. "Consequently, you are so much better off holding your nose and picking a plan now rather than having to do so in the future and also having to pay a penalty on top of your regular premiums."

There are two ways to get Medicare prescription drug coverage:

1. You can join a stand-alone Medicare Prescription Drug plan. These plans, sometimes called PDPs, add drug coverage to the original Medicare plan, to some Medicare PFFS plans, to some Medicare Cost Plans and Medicare Medical Savings Account, or MSA, plans. (The latter two plans are part of the catchall "other Medicare plans" that are not Medicare Advantage plans. Medicare Cost Plans, available only in certain parts of the country, are a variation of the original Medicare plan. An MSA plan combines a high-deductible Medicare Advantage plan and a bank account, much like the consumer-directed health plans that are available in the private sector.)
2. You can join a Medicare Advantage plan (such as an HMO or PPO) or another Medicare health plan that includes prescription drug coverage. Through these you will get all of your Medicare coverage (Part A and Part B), including prescription drugs (Part D). These plans are sometimes called MA-PDs and you will usually pay a separate monthly premium in addition to your Part B premium.

Every year, from Nov. 15 to Dec. 31, you can switch to a different Medicare drug plan if your plan coverage changes or your prescription needs change. When you join or switch to a new Medicare drug plan, your coverage generally will begin on Jan. 1 of the following year.