Should You Sign Up for a Medicare Prescription Drug Plan?

I just turned 65 yesterday, August 20th, and my Medicare Part A (Hospital) and Part B (Medical), Medicare Supplement, and Medicare Prescription Drug Plan (PDP), also known as Part D, all started a few weeks ago on August 1st, 2017.

NOTE: For most people, their Medicare benefits usually begin on the 1st of the month when they turn 65.

Fortunately, I’m in pretty good health, and I only take two relatively inexpensive medications. Since there is a late enrollment penalty added to your monthly PDP premiums if you don’t sign up for a PDP when you are first eligible (turning 65 or starting Medicare Part B), I decided that I was going to at least sign up for the cheapest PDP to avoid the penalty later on.


How Much is the Part D Penalty?

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

According to the website “Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($35.63 in 2017) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.”

NOTE: The national base beneficiary premium may increase each year, so your penalty amount may also increase each year.

The late enrollment penalty is approximately $0.34 per month for every month you could have had prescription drug coverage but didn’t. For example, if you went 10 months without PDP coverage before you started a new PDP, the total penalty would be approximately $3.40 per month ($0.34 x 10 months) on top of the regular prescription drug plan monthly premium. Again, the penalty amount can increase in the future.

Part D Penalty

My Prescription Drug Plan Coverage — Before and After Medicare

Before I started on Medicare, I had some limited prescription drug plan coverage through my Affordable Care Act (Obamacare) health insurance, which wasn’t so “affordable.”

I take two medications: Fluticasone nasal inhaler and Levothyroxine. Through my previous pharmacy, the regular price of the Fluticasone was $56.80 per month, but with my Obamacare insurance, I was paying $20.00 per month. In addition to that, I was paying $12.68 per month for the Levothyroxine.

Altogether, before I started on Medicare, I was paying $32.68 per month for both prescriptions.

In contrast, I recently signed up with the Medicare “Humana Walmart Rx Plan” because it is currently the cheapest and most cost-effective drug plan for my particular situation. During the next Annual Enrollment Period (AEP), which is from October 15th through December 7th each year, I may sign up for a different PDP plan if I find another plan that is better than the one that I currently have.

Regardless of what PDP you currently have, you should always shop around every year during the AEP between October 15th and December 7th.


NOTE: I am not certified to sell prescription drug plans, and I am not recommending, endorsing, or promoting Humana or any particular insurance carrier. My primary focus and area of expertise is with Medicare Supplement insurance plans.

With my Humana PDP, I pay a monthly premium of $17 per month, and I have a $400 per calendar year deductible. However, the two prescriptions that I take are classified as
Tier 1 prescriptions, and under my current plan, Tier 1 and Tier 2 prescriptions are not subject to the deductible, so I don’t have to pay any deductibles for the two prescriptions that I take!

With my Humana PDP, I chose to have my prescriptions mailed to me every three months, so I no longer have to drive to the pharmacy to pick up my prescriptions each month. That’s a nice benefit too!

NOTE: In my particular situation, the mail-order option ended up costing me less than picking my prescriptions up from a pharmacy, but that isn’t always the case.

For the Fluticasone, I am currently paying $8.00 TOTAL for a three-month supply! That comes out to $2.67 per month! For the Levothyroxine, I do not have to pay anything other than my monthly premium!

As mentioned before, I am currently paying $17.00 per month for my Humana PDP premium, and my total out-of-pocket cost for my medications is $2.67 per month for a total cost of $19.67 per month. In contrast, I was paying $32.68 per month prior to Medicare just for my prescriptions, not including my not-so-reasonably-priced health insurance premium.

I am very happy with my Medicare prescription drug plan. For me, it is significantly better than the prescription coverage that I had before I was on Medicare.


Is a Medicare Prescription Drug Plan Good for Everyone?

Fortunately for me, the prescriptions that I take are relatively inexpensive, but I know that isn’t the case for everyone. Some of my clients take a lot of expensive prescriptions, and a PDP doesn’t always save them money or else some of the prescriptions may not be covered at all by the PDP, which is very frustrating.

Some people don’t take any prescriptions at all, and they may question whether it makes sense to sign up for a PDP if they currently don’t need one, even though their health could (and probably will) change at some point in the future.

Because of the late enrollment penalty, I would still recommend signing up for the cheapest PDP, at least for the time being, if it isn’t a financial hardship.

NOTE: This blog addresses my experience with Medicare prescription drug plans. To read about my experience with Medicare Supplement insurance plans, please click here.

Everyone is different, and what is good for one person isn’t necessarily good for another. Should you sign up for a prescription drug plan? That is a personal decision and a question that only you can answer.


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I am an independent insurance agent specializing in Medicare Supplement insurance plans. I work with all the major insurance carriers in California, Washington, and several other states. If you have any questions, or if you would like for me to shop around for you to save you money on your Medicare Supplement insurance, please don’t hesitate to let me know!

Thank you!

Ron Lewis
866.718.1600 (Toll-free)