Medicare’s Open Enrollment Period — also called the Annual Enrollment or the Annual Election Period — runs each year from October 15 to December 7. During this time period, beneficiaries enrolled in a Medicare Advantage or Medicare Part D plan can evaluate, compare and switch their plans, if desired. With a variety of options  available, it’s important you understand how this can affect your coverage. Below we highlight common situations about Prescription Drug Plan changes during Open Enrollment.

In addition, it’s important to understand the benefits of prescription drug plans and penalties you may face should you not maintain creditable coverage. 

Situation 1: I only have Original Medicare (Parts A & B)

In this situation, you do not have a stand-alone prescription drug plan. If you do not currently have creditable coverage through another avenue (employer, union, TRICARE, PACE, VA), you may face a penalty. However, you still have options to ensure you get prescription drug coverage:

• You can join a Medicare Advantage plan that includes prescription drug coverage (MA-PD).
• You can remain enrolled in Original Medicare and join a stand-alone Medicare prescription drug plan. 

If you choose not to enroll in Part D coverage, you could face penalties which add up the longer you go without Part D or creditable prescription drug coverage. 

Situation 2: I have Original Medicare (Parts A & B) along with a stand-alone Medicare prescription drug plan

• You can switch to a Medicare Advantage plan with built-in drug coverage (MA-PD). 
  • If you switch to a Medicare Advantage plan without drug coverage and you do not keep a stand-alone prescription drug plan, you may face a penalty.
• You can maintain Original Medicare while changing your current Medicare prescription drug plan to a different one.
• You can drop your prescription drug coverage entirely. In this case, should you not have creditable coverage through another entity, you may face a penalty if you re-enroll in a prescription drug plan (either stand alone or an MA-PD).
• Make no changes.

Situation 3: I currently have a Medicare Advantage plan (Part C) with built-in prescription drug coverage.

• You can switch to another Medicare Advantage plan with or without drug coverage.
  •  If you switch to a Medicare Advantage plan without drug coverage, you will need to evaluate a stand-alone prescription drug plan or you may face penalties.
• You can revert back to Original Medicare by dropping your Medicare Advantage plan. In this case, you will need to evaluate a stand-alone prescription drug plan or you may face penalties.
• Make no changes.

Situation 4: I currently have a Medicare Advantage plan (Part C) and a stand-alone Medicare prescription drug plan (Part D)

• You can switch to another Medicare Advantage plan with or without drug coverage. If you switch to a Medicare Advantage plan with drug coverage (MA-PD), you do not need a stand-alone Medicare prescription drug plan.
• You can change your current Medicare prescription drug plan to a different one.
• You can drop your Medicare prescription drug plan entirely; however, you might incur a penalty if you decide to get drug coverage again later.
• You can revert back to Original Medicare by dropping your Medicare Advantage plan. In this case, you will need to evaluate a stand-alone prescription drug plan or you may face penalties.
• Make no changes.

Key Takeaway

Be aware of the situations or changes that could cause you to lose creditable prescription drug coverage. While the potential financial penalty for enrolling in a prescription drug plan after dropping coverage is notable, you should also feel comfortable regarding access to required prescriptions.