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How Medigap policies work with Medicare drug coverage (Part D)

You can't join a Medicare Prescription Drug Plan and have a Medigap policy with drug coverage

If you have a Medigap policy with prescription drug coverage, this means you chose not to join a Medicare drug plan.

If your Medigap policy covers prescription drugs, you must tell your Medigap insurance company if you join a Medicare Prescription Drug Plan so it can remove the prescription drug coverage from your Medigap policy and adjust your premium. Once the drug coverage is removed, you can't get that coverage back even though you didn't change Medigap policies.

Your Medigap carrier must send you a notice each year telling you if the prescription drug coverage in your Medigap policy is creditable. You should keep these notices in case you decide later to join a Medicare drug plan.

Medigap policy with creditable drug coverage

If you have a Medigap policy that includes creditable prescription drug coverage, you can only join a Medicare drug plan between October 15–December 7, unless you lose your Medigap policy (for example, if it isn't guaranteed renewable, and your company cancels it). In that case, you can join a Medicare Prescription Drug Plan at the time you lose your Medigap policy.

Medigap policy without creditable drug coverage

If you don't have credible prescription drug coverage and join a Medicare Prescription Drug Plan, you'll probably pay a higher premium (a penalty added to your monthly premium) than if you joined when you were first eligible.

Each month that you wait to join a Medicare drug plan will make your late enrollment penalty higher.