Sixty-Five Incorporated

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What is creditable drug coverage?

This is drug coverage that is considered at least as good as that of the standard Medicare prescription drug plan. This means the drug plan will pay at least as much as the standard Medicare plan.

Why does this matter?
If the drug coverage is creditable, you do not need to purchase a Part D prescription drug plan as long as you keep this plan. When you decide to give up this coverage or the coverage ends, you will have a special enrollment period to purchase a Part D plan without facing a late enrollment penalty. 

How can I determine whether the coverage is creditable?
If you are turning 65, ask a plan administrator for a copy of the current notice. Once you are over 65, the entity sponsoring the drug plan must notify Medicare-eligible members every year by October 15 as to the status of the coverage (whether or not it is creditable).   

What if the drug coverage of this plan is not creditable?
You should consider enrolling in a Part D prescription drug plan during the Initial Enrollment Period. (You would also need to enroll in Medicare Part A to qualify for a drug plan.) If you delay, you will face a Part D late enrollment penalty for every month you go without creditable coverage.