What is Creditable Coverage?

by Doug Benson on January 14, 2013. Updated April 26, 2013

in Prescriptions

Medicare Creditable Coverage is a term you will likely hear only when you are turning 65 and/or joining Medicare and selecting a Medicare Prescription Plan the first time.

While Medicare Prescription Plans are optional, Medicare wants everyone who is eligible to get a plan. Like most insurance plans, the more people who have it, the more money that is available for those who need it. If you are eligible but do not get a Part-D plan, you will have to pay a penalty when you do finally get one UNLESS you have a “Creditable” prescription plan through another source (usually as part of a company group plan.)

Medicare determines whether or not a non Medicare Part-D plan is Creditable. A plan is Creditable if it offers equivalent coverage to the standard Medicare Part D plan. Most company group plans and private health plans do offer Creditable prescription coverage, so this is usually not a problem.
If you are Medicare Eligible, and plan to keep your existing prescription plan for some period of time, you should call your insurance company and ask them to send you a letter stating whether or not their plan is Creditable with Medicare.

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