What do you need to know about prescription drug coverage? Let's unpack what you need to know.

According to a 2016 study from the CDC, 40% of people over the age of 65 take five or more medications a day. Medicare can help you pay for it.

A Medicare prescription drug plan is also known as Medicare Part D. To get Medicare drug coverage, you must join a plan run by an insurance company or a private company approved by Medicare. There are two ways you can sign up.

The first by a stand-alone Medicare Part D plan. The second, purchase a Medicare Advantage Plan that includes prescription drug coverage. And remember, you can only get these through private insurance companies.

Keep in mind, each plan has a list of prescription drugs that it covers on a list called a formulary. The formulary has information like which tier the drug is on. Tiers help determine how much you'll pay for your medicine. The formulary also tells you about any special rules, including whether there are quantity limits.

You can get the most out of the Part D plan by checking different ways to save like reduced pricing at preferred pharmacies, extra benefits, or 90 day drug prescriptions.

Don't forget, if you don't sign up when you're first eligible, you could pay more in the form of a late enrollment penalty.

Let's unpack what you need to know about Medicare Advantage.

Sometimes it's just easier to get everything you need in one place. That's the idea behind Medicare Advantage, also known as Medicare Part C. It helps you make the most of one plan. These types of plans are provided by private insurance company and include coverage for everything that original Medicare covers.

So what is the advantage?

Medicare Advantage plans can cover more. For example, many offer prescription drug coverage, as well as dental, vision, and hearing benefits. Some include coverage for things like fitness memberships. Others even connect you to wellness coaches, either online or by phone, to help you reach your health goals.

If you choose Medicare Advantage, you continue to pay a monthly Part B premium to Medicare, in addition to any premiums you pay to the company that provides your plan. Medicare Advantage plans can offer richer benefits at a more reasonable price because they harness the power of coordinated care within a network of providers.

But keep in mind, not every doctor or hospital is part of your network, and if a provider is outside your network, their services may not be covered. So before you sign up for a Medicare Advantage plan, make sure the doctors you want are in the plan’s network.

If you like the idea of being able to manage all your Medicare and prescription drug benefits under one plan, a Medicare Advantage plan might be for you.

What is Medicare?

Let's learn more about your potential Medicare benefits by unpacking its parts. Medicare is the government-sponsored health insurance program for people 65 and older. People under the age of 65 with certain types of disabilities also qualify. You can first sign up for a plan during the initial enrollment period. Three months before you turn 65, your birth month, and three months after you turn 65.

Let's breakdown the parts.

Medicare Part A covers most inpatient medical expenses like hospital stays and home healthcare. You'll need to pay a deductible before the program covers a portion of your costs. The deductible could be assessed more than once in a year.

Part B works with Part A by covering additional care like doctor visits, lab tests, and outpatient procedures.

Together, Part A and B are often referred to as Original Medicare. You pay a monthly premium for your Part B coverage. Remember, unless you get medical coverage from another source, like your work or through your spouse, it's a good idea to sign up for Part B as soon as you're eligible.

Why? Because you may pay a higher Part B premium if you wait.

Part C, also known as Medicare Advantage, are plans offered by private insurance companies approved by Medicare. They may offer more benefits at a lower cost than Original Medicare.

How? Because Medicare Advantage plans are made up of networks of healthcare providers. These networks give you access to in-network professionals. This helps make your care more affordable. Keep in mind that if you purchase a Part C plan, you may pay a monthly premium and/or deductible.

Medicare Advantage plans may include benefits that can help you take care of your whole health like dental, vision, and fitness programs.

Part D helps pay for prescription drug coverage. These plans are offered by private insurance companies that are approved by Medicare. Depending on the Part D plan you choose, you may pay a monthly premium and sometimes a deductible.

Medicare supplement plans, also known as Medigap plans, can help pay for some bills Original Medicare doesn't cover. They can also provide medical coverage when you travel outside the United States.

These plans are sold through approved private insurance companies and they're only available to people who only have Original Medicare.

Are you thinking about signing up for Medicare?

Let's unpack what you need to know about Medicare enrollment periods.

An enrollment period is a window of time when you can make changes to your insurance plan. It's actually multiple periods because different circumstances call for different ways to enroll. Let's take a look at the different times to enroll.

The initial enrollment period.

When you turn 65 you have a seven month window to enroll in Medicare. This includes three months before the month you turn 65, your birth month, and three months after the month you turn 65. During this time, you can enroll in original Medicare, parts A and B, a Medicare Advantage Plan, part C, and a standalone Medicare prescription drug plan, part D.

Remember, in general, if you are already receiving Social Security, you will be automatically enrolled in original Medicare.

The annual enrollment period.

You can make changes to your coverage or enroll in a healthcare or prescription drug plan every year from October 15th to December 7th.

The special enrollment period.

This period allows you to change plans outside of the annual enrollment period. It's usually based on a life event. For example, if you move outside your plan's area or leave a job and lose your coverage, you may qualify to change or enroll in a new plan.

If you're interested in coverage other than original Medicare, it's important to note that each part of Medicare may have different rules for enrolling or adjusting coverage. Understanding your enrollment period options can help you get the coverage you need.