Creditable prescription drug coverage
Creditable prescription drug coverage is prescription drug coverage that’s expected to pay, on average, at least as much as Medicare drug coverage (Part D) . Your current plan must tell you each year if your drug coverage is creditable prescription drug coverage.
Why do I need to have creditable drug coverage?
If you go 63 days or more without Medicare drug coverage or other creditable prescription drug coverage, you may have to pay a
Part D late enrollment penalty
if you get Medicare drug coverage later. You’ll generally have to pay the penalty as part of your monthly
premium
for as long as you have Medicare drug coverage. Medicare drug coverage (Part D) helps pay for your prescription drugs. You can get drug coverage through a Medicare drug plan or use other creditable prescription drug coverage (like drug coverage you get from your job).
You might already have creditable drug coverage from:
- A current or former employer or union
- TRICARE or Department of Veterans Affairs (VA)
- The Indian Health Service (IHS)
You typically don’t need to get Medicare drug coverage as long as you keep your creditable coverage.
What you should do to avoid paying a penalty:
- Ask your current plan if your drug coverage is considered creditable drug coverage by Medicare
- Keep records showing you have creditable coverage
- If you don’t have creditable drug coverage, consider getting Medicare drug coverage when you’re first eligible for Medicare to avoid paying a penalty
If you have other drug coverage and decide to get Medicare drug coverage:
- You, your spouse, or dependents may lose all of your employer or union health coverage
- Your out-of-pocket drug costs could be different
If I (or my spouse) have employer or union health coverage, can I keep it?
Prescription drug coverage is insurance. Doctor samples, discount cards, free clinics, or drug discount websites aren’t drug coverage.
What happens if I have creditable coverage, and get Medicare drug coverage later?
When you join a Medicare drug plan or health plan, the plan may send you a letter asking if you had creditable prescription drug coverage. If you get a letter, you must complete the form and return it by the deadline in the letter. If you don't return the form by the deadline, the plan won't know if you had other creditable prescription drug coverage, and you may be charged a late enrollment penalty.
What do you want to do next?
Learn about costs for Medicare drug coverage
Understand what you’ll pay for premiums, deductibles, and drugs before choosing a plan.
Understand your coverage choices
Explore the two main ways you can get Medicare drug coverage.
Join or change plans
Compare plans in your area and join one when you’re ready.