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As a Medicare beneficiary in New Mexico, the costs of your current and future prescription medications are likely to be a concern. Medicare Part D is a government-sponsored private insurance offering prescription drug coverage. Each stand-alone Medicare Part D Prescription Drug Plan in New Mexico has a different cost, depending on your location and zip code, but most require payment of a monthly premium, annual deductible, and copayment or coinsurance.
Medicare Part D is the federal program designed to assist Medicare beneficiaries like you with prescription drug coverage, whether they live in New Mexico or elsewhere. However you don’t receive your prescription drug coverage directly from Medicare. Instead, you receive these benefits from private insurance companies contracted with Medicare to offer prescription drug coverage to Medicare beneficiaries, locally, where they live.
In New Mexico you have a choice in your selection of insurance plans providing Part D prescription drug coverage. Two basic types of plans exist. Depending upon where you live and what other choices you’ve made about your Medicare coverage, one of these two types is likely to be a good fit, providing coverage to help pay some of your medication costs not available through Original Medicare. These two types of plans are described below.
One way you can receive Medicare Part D prescription drug coverage is to enroll in a Medicare Advantage Prescription Drug plan for where you live in New Mexico. A Medicare Advantage Prescription Drug plan combines health and prescription drug coverage into a single plan. Medicare Advantage Prescription Drug plans must offer at least the same level of coverage as Original Medicare Part A (hospital insurance) and Part B (medical insurance) provide. Many offer additional health benefits that Original Medicare does not—such as routine dental, vision, or hearing—and prescription drug coverage. To sign up for a Medicare Advantage Prescription Drug plan you must have Medicare Part A and Part B, and you must live in the plan’s service area.
Another way you can receive Medicare Part D prescription drug coverage is to enroll in a stand-alone Medicare Part D Prescription Drug Plan. A Medicare Part D Prescription Drug Plan is designed to work alongside your Original Medicare coverage. If you have Medicare Part A and/or Part B, you can enroll in a Medicare Part D Prescription Drug Plan to receive prescription drug benefits to complement your health benefits. You can also add prescription drug coverage from a Medicare Part D Prescription Drug Plan if you are enrolled in a Medicare Advantage plan that does not provide prescription drug coverage. To choose this option, you must have Medicare Part A and/or Part B and live in the Part D Prescription Drug Plan’s service area. You cannot combine a Medicare Advantage Prescription Drug plan and a Part D Prescription Drug Plan.
Each Medicare Part D Prescription Drug Plan in New Mexico has a formulary. A formulary is a list of covered prescription drugs. The formulary may change at any time. If enrolled, you will receive notice from your plan when necessary. Typically a Medicare Part D Prescription Drug Plan groups the medications in its formulary into coverage categories called “tiers”. Each tier has a designated out-of-pocket cost (e.g., copayment or coinsurance amount) for the medications within the tier. The top tier includes the most expensive drugs, while the bottom tier lists the less expensive medications. If your doctor determines that a drug in a higher tier is medically necessary for your treatment instead of a similar drug in a lower tier, you or your doctor can ask your plan for a tiering exception so that you can receive the benefit of a lower copayment for a higher tier medication.
Most Medicare Part D Prescription Drug Plans in New Mexico permit you to choose between brand-name drugs and generic drugs. The Food and Drug Administration (FDA) defines generic drugs as having the same active ingredients as brand-name drugs, at the same strength, dosage, and with the same method of administration. The FDA also requires that generics are tested to have the same results as brand-name drugs. Generic drugs often cost less than the brand-name versions, resulting in lower out-of-pocket expenses for Medicare beneficiaries. If a generic drug is not available, your Part D Prescription Drug Plan may allow you to substitute it with a similar generic drug used to treat the same condition instead of paying more for the brand-name drug, so be sure to discuss all prescription drug options with your doctor.
If you enroll in a Medicare Part D Prescription Drug Plan, you continue to pay any applicable Part A and/or Part B premium(s) to remain enrolled in Medicare to retain your insurance coverage. You may also have a separate monthly premium you pay to the Part D Prescription Drug Plan in exchange for prescription drug benefits.
Generally, the prescription drug benefits of Medicare Advantage Prescription Drug plans share many of the characteristics described above.
A good time to enroll in a plan that offers Medicare Part D prescription drug coverage is during your seven-month Medicare Initial Enrollment Period, which begins three months before you turn 65, includes your birthday month, and ends three months after that month. If you’re enrolled in Medicare due to a disability, you can enroll in a plan during the time period of three months before until three months after your 25th month of disability.
You can enroll in a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan during the Annual Election Period for Medicare Advantage and Medicare prescription drug coverage, which runs from October 15 to December 7 each year. You may also change plans during this time. The effective date of your coverage is January 1st of the following year.
January 1 to March 31 each year is the Medicare Advantage Open Enrollment Period. If you disenroll from a Medicare Advantage or Medicare Advantage Prescription Drug plan at this time and return to Original Medicare, Part A and Part B, you can add a stand-alone Medicare Part D Prescription Drug Plan until March 31.
Timing is important. If you go without creditable drug coverage (that is, prescription drug insurance that is at least as good as Medicare Part D coverage) for 63 days or more after your Initial Enrollment Period ends, you may be liable for a late-enrollment penalty. The Medicare Part D late-enrollment penalty is calculated using 1% of the national base beneficiary premium and the number of full months you were eligible for Medicare Part D but didn’t enroll. This amount is then added to your Medicare Part D monthly premium. The national base beneficiary premium may increase each year, which means your late-enrollment penalty may also increase annually.
Whether you are interested in signing-up for a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan, it’s to your benefit to shop and compare. While many plans offering Medicare Part D prescription coverage may be in New Mexico, not all may be available in the area where you live. You can narrow your search by entering your zip code in the eHealth plan finder on this page.
Also, plans offering Medicare Part D prescription coverage have different costs. Premiums, deductibles, copayments, and coinsurance are likely to vary. Also formularies, the lists of covered prescription drugs, may vary. So it’s important to check to see if your medications are on the plan’s formulary and, if so, on which tier.
If you are currently enrolled in a Medicare Part D Prescription Drug Plan, it’s a good idea to review your coverage on a yearly basis to be aware of any changes. Medicare Part D Prescription Drug Plans in New Mexico and the rest of the United States are allowed to change their premiums, copayments, deductibles, and formularies each year and you will receive notice of these changes in the Annual Notice of Changes and Evidence of Coverage the plan mails you in the fall before the new benefits are effective the following January 1st.
See the following pages for extra information about Medicare in New Mexico: