In New Jersey, as in other states, Medicare beneficiaries with Original Medicare have the option of signing up with a Medicare plan that offers prescription drug (Part D) coverage. Offered by private insurance companies that contract with Medicare, stand-alone Medicare Prescription Drug Plans help pay for prescription drugs. The availability and cost to New Jersey Medicare beneficiaries interested in enrolling in a stand-alone Medicare Part D Prescription Drug Plan may vary according to the plans and their specific prescription drug benefits available where you live. In most cases you’ll have your choice of several stand-alone Medicare Part D Prescription Drug Plans offered by different companies. Most plans will require payment of a monthly premium, annual deductible, and copayment or coinsurance.
How Medicare Part D works in New Jersey
As a New Jersey Medicare beneficiary, you are eligible to sign up for a stand-alone Medicare Part D Prescription Drug Plan if you have Medicare Part A and/or Part B and you do not have prescription drug coverage as part of your Medicare benefits; that is, if you have Original Medicare Part A and Part B, or Original Medicare and a Medicare Supplement (Medigap), or a Medicare Advantage (Medicare Part C) plan that doesn’t provide prescription drug coverage, you generally may enroll in a stand-alone Medicare Part D Prescription Drug Plan.
In New Jersey (as elsewhere) each stand-alone Medicare Part D Prescription Drug Plan has its own formulary. A formulary is a list of covered prescription drugs. The formulary may change at any time. You will receive notice from your plan when necessary. The plan formulary’s covered prescription drugs are placed in different tiers (or benefit categories), generally based on cost. Prescription drugs in the lowest tier tend to cost less, while medications in the highest tier are higher priced. Generally, your out-of-pocket expense, the copayment or coinsurance amount you pay for the prescription drug, will be higher or lower depending on where your medication appears in the tiers. In some instances, if your doctor prescribes a more expensive drug in a higher tier to treat your health condition, you may be eligible for a tiering exception, which could result in a lower copayment for your prescription drug.
Most Medicare Part D Prescription Drug Plans allow you to choose between generic and brand-name prescription drugs. Generic drugs, according to the Food and Drug Administration, are safe equivalent versions of brand-name drugs that use similar active ingredients and offer similar results as the brand-name originals. Beneficiaries usually experience lower out-of-pocket expenses when they choose generic drugs.
Sometimes the standard generic version of your brand-name prescription drug is not available. In some cases, there may be a similar generic drug that could work just as well for your particular condition. Be sure to discuss all such generic drug options with your doctor or other prescribing health-care provider.
Eligibility and enrollment
Naturally, if you are interested in obtaining Part D prescription drug coverage, you want to know whether you are eligible to enroll in a Medicare plan that offers prescription drug coverage and when you can do so.
- In New Jersey, as in other states, you must have Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance) to enroll in a stand-alone Medicare Part D Prescription Drug Plan.
- You must live in the service area of the Medicare Part D Prescription Drug Plan you choose.
- You can enroll in a stand-alone Medicare Part D Prescription Drug Plan during the seven-month Medicare Initial Enrollment Period, which begins three months before you turn 65, includes your birthday month, and ends three months after your birthday month.
- If you have a disability, your Initial Enrollment Period is typically the seven-month period that starts after you’ve been collecting disability benefits from the Social Security Administration or Railroad Retirement Board for 21 consecutive months (the Initial Enrollment Period starts the 22nd month you receive disability benefits, includes the 25thmonth, which is the month you attain Medicare eligibility and ends three months later, or the 28th month you receive disability benefits).
- You can also enroll in a stand-alone Prescription Drug Plan during the Annual Election Period, which runs from October 15 to December 7 each year. You can also change Medicare Part D Prescription Drug Plans during this period or the Medicare Advantage Open Enrollment Period which is January 1 through March 31 each year.
- If you’re enrolled in a Medicare Advantage plan and decide to switch to Original Medicare, you can do so during the Medicare Advantage Open Enrollment Period , which runs from January 1 to March 31 each year. This action returns you to Original Medicare coverage and makes you eligible for a stand-alone Medicare Part D Prescription Drug Plan. You have until March 31 to add a prescription drug plan to your Original Medicare coverage.
An important consideration is when to enroll in a Medicare plan that offers Part D prescription drug coverage. You could be subject to a lifetime Part D late enrollment penalty if at any time after the close of your Initial Enrollment Period you remain without creditable drug coverage for 63 continuous days or more. (Creditable prescription drug coverage is coverage that is as good as Part D coverage.) The late enrollment penalty is calculated using 1% of the national base beneficiary Medicare Part D premium ($32.74 in 2020) multiplied by the number of full months you were eligible for a prescription drug plan but didn’t enroll. This amount is then added to your Part D monthly premium. Since the national base Medicare Part D premium could increase each year, your late enrollment penalty could increase as well.
Types of Medicare plans offering prescription drug coverage in New Jersey
Before you choose a Medicare plan offering prescription drug coverage in New Jersey, it may be helpful to understand you have the option of two different types of plans: a stand-alone Medicare Part D Prescription Drug Plan and a Medicare Advantage Prescription Drug plan. While the Part D prescription drug coverage is similar, each plan works a little differently so you will want to consider which type is better suited to your needs.
- A stand-alone Medicare Part D Prescription Drug Plan works alongside your Original Medicare coverage to help pay your prescription drug costs. If you have Medicare Part A or Part B or both Part A and Part B, you can enroll in this type of plan. When you’re enrolled in a stand-alone Medicare Part D Prescription Drug Plan, you typically pay the plan’s monthly premium in addition to your Original Medicare premium(s).
- A Medicare Advantage Prescription Drug plan, on the other hand, combines health and prescription drug coverage into one plan, offered by a Medicare-approved private insurance company and providing prescription drug coverage in addition to at least the same coverage as Original Medicare. Sometimes Medicare Advantage Prescription Drug plans provide additional benefits such as routine vision, hearing, and dental coverage, in a single plan. Because Medicare Advantage Prescription Drug plans are an alternative way to receive your Medicare Part A, Part B and Part D benefits, you must be enrolled in Medicare Part A and Part B to enroll in a Medicare Advantage Prescription Drug plan. You usually have to pay a monthly plan premium in addition to your Medicare Part B premium.
Things to consider when deciding on a Medicare plan offering prescription drugs
You may want to consider the following suggestions as you decide whether to add prescription drug coverage to your Medicare coverage and which plan to choose:
- If you and your doctor believe you’ll need prescription drugs in the future, keep that in mind as you decide whether or not you need prescription drug coverage from a Medicare plan. You might not need prescription drug benefits right now, but you could face a lifetime late enrollment penalty if you add this coverage later.
- Make a list of your current medications. If you decide to enroll in a Medicare plan providing prescription drug coverage, make sure the plan’s formulary includes your medications.
- If you already have Medicare prescription drug coverage, review your plan coverage toward the end of the year to keep up with any important changes. In New Jersey, as in other states, Medicare Part D Prescription Drug Plans can change their premiums, copayments, deductibles, and drug formularies every year. Review the Annual Notice of Changes and Evidence of Coverage your plan mails you in the fall of each year to understand what your prescription drug coverage will be during the coming year. You may want to check other plans to see if any other stand-alone Medicare Prescription Drug Plans or Medicare Advantage Prescription Drug plans would better suit your health needs.
For more information about private Medicare insurance for New Jersey beneficiaries, please see: