Who Is Eligible for Medicare Part D?

Before you can take advantage of a Part D plan, you must first be eligible to sign up. There are specific criteria you need to meet in order to qualify for the program.

To be eligible for Part D, you must first be eligible for Medicare at large. The rules for Medicare eligibility are straightforward. Beyond that, there are other specific rules for enrolling in Part D that you need to know.

American Ties

Medicare is a federal healthcare program that Americans pay into with taxes. It makes sense that the government would want to make sure that you have ties to the country before they allowed you access to that benefit.

Permanent legal residents must live in the country for at least five consecutive years. Not only that, five of those years must immediately precede their application to Medicare.

Medical Need

The second requirement for Medicare eligibility is to demonstrate medical need. Medicare leaves no room for interpretation here. You will be eligible for the program if you meet at least one of the following criteria.

Age

You are 65 years or older. More than 60 percent of Americans in this age group have two or more chronic medical conditions. Even if you do not have any medical problems at the present time, you are at a statistically higher risk for developing one.

Amyotrophic Lateral Sclerosis (ALS)

This condition, also known as Lou Gehrig's disease, is a debilitating neurologic disease that weakens your muscles. You will be automatically eligible for Medicare at the time you are diagnosed, regardless of how old you are.

Kidney Disease

You have end-stage renal disease (ESRD). This does not mean your kidneys are just having a tough time. It means that your kidneys are functioning so poorly they require dialysis or a kidney transplant for you to stay alive. In order to be eligible for Medicare, you or your spouse must have also paid a certain amount of Social Security taxes into the system.

Other Disabilities

You have a disability that is expected to last longer than 12 months. This disability can be for any number of reasons but must be approved for Social Security Disability Insurance (SSDI) to be eligible for Medicare. You cannot sign up for Medicare until you have been on SSDI for 24 months.

Alternatively, you could have a disability that is recognized by the Railroad Retirement Board. Medicare eligibility, in that case, would start right away.

Part D Eligibility With Medicare

Once you are eligible for Medicare, you can decide which parts you want to sign up for—Parts A, B, C, or D.

Your first decision will be whether to opt for Original Medicare (Parts A and B) or a Medicare Advantage (Part C) plan. You cannot have both. For clarification, Medicare Advantage plans offer everything that Parts A and B do but may provide additional benefits for an added cost.

In order to apply for Part D, you may enroll in Part A, Part B, or both. There is no option to apply for Part D alone.

Alternatively, you can choose to sign up for a Medicare Advantage plan. There are Medicare Advantage Prescription Drug Plans (MA-PD plans) that include Part D coverage.

There are times you may be eligible for Medicare but are not allowed to enroll in a Part D plan. This occurs when you reside outside of the country or U.S. territories. When you return to the United States, you will be eligible to sign up. When you are incarcerated, you receive benefits from the prison system, not Medicare. You may enroll in Part D after you are released.

Dual Eligibility With Medicaid

Millions of Americans are eligible for both Medicare and Medicaid every year. This dual eligibility may provide extra coverage to beneficiaries but with that comes extra regulation. It is important to note that both programs are managed by the same federal agency, the Centers for Medicare and Medicaid Services (CMS).

Although Part D plans are voluntary for most Medicare beneficiaries, those who are dual eligible have no choice. Medicaid requires that you sign up for Medicare as soon as you are eligible and this includes signing up for a Part D plan. If you do not sign up yourself, you will be automatically enrolled in Original Medicare and a Part D plan by the government. You will have the option to change to a MA-PD or pick a different Part D plan at a later time.

Eligibility for Family Members

Unlike other types of insurance plans, you cannot share your Medicare benefits with anyone else. This means that your spouse and dependents will need to find their own coverage.

If your family relies on you for health insurance, you may want to consider holding onto your private plan until other coverage can be arranged for them. But beware. Signing up late for Medicare could lead to costly penalties in the future. Everyone’s financial situation is different and you will have to decide what works best for you.