Medicare Part D creditable coverage is a type of health insurance that helps pay for prescription drugs. It is important to have creditable coverage to avoid paying a penalty when you enroll in Medicare Part D. In 2025, the rules for creditable coverage will change. These changes will make it easier for people to get creditable coverage and avoid the penalty.
One of the most important changes is that Medicare will now consider more types of health insurance as creditable coverage. This includes health insurance from employers, unions, churches, and other organizations. Additionally, Medicare will now consider certain types of foreign health insurance as creditable coverage. This is good news for people who live outside the United States or who travel frequently.
Another important change is that Medicare will now allow people to have more than one type of creditable coverage at the same time. This is helpful for people who have health insurance from multiple sources, such as an employer and a spouse. In the past, people could only have one type of creditable coverage at a time. This could lead to people paying a penalty if they had a break in coverage. The new rules will make it easier for people to avoid this penalty.
Resources for Obtaining Creditable Coverage
Employer-Sponsored Health Insurance
Contact your employer’s human resources department to inquire about their health insurance plans. If you meet the eligibility requirements, you may be able to obtain creditable coverage through your employer.
Individual Health Insurance
Shop for health insurance plans on the Health Insurance Marketplace (healthcare.gov) or through private insurers. Be sure to select a plan that meets the creditable coverage requirements.
Medicare
If you are enrolled in Medicare Part A (hospital insurance) or Medicare Part B (medical insurance), you automatically have creditable coverage.
Medicaid
Apply for Medicaid through your state’s Medicaid agency. Medicaid is a joint federal-state program that provides health insurance to low-income individuals and families.
Tricare
If you are a member of the military or a veteran, you may be eligible for Tricare health insurance. Tricare provides creditable coverage for military families.
Veterans Health Administration (VA)
Veterans who meet certain eligibility requirements may be able to obtain health care through the VA. VA health care is creditable coverage.
Indian Health Service (IHS)
American Indians and Alaska Natives may be eligible for health care through the Indian Health Service. IHS provides creditable coverage.
Peace Corps
Peace Corps volunteers who have served for at least 27 months are eligible for creditable coverage through the Peace Corps.
Foreign Insurance
Health insurance coverage from a foreign country may be creditable if it meets certain requirements. You should contact the Social Security Administration to determine if your foreign insurance is creditable.
Medicare Part D Creditable Coverage in 2025
Medicare Part D is a prescription drug coverage program that is available to all Medicare beneficiaries. In order to avoid penalties, beneficiaries must have creditable prescription drug coverage that is at least as good as Part D. Creditable coverage can be provided by a variety of sources, including Medicare Part D plans, employer-sponsored group health plans, and other government programs.
The Centers for Medicare & Medicaid Services (CMS) has announced the following changes to the Medicare Part D creditable coverage rules for 2025:
- The definition of “creditable coverage” will be expanded to include certain low-income subsidy (LIS) programs.
- The look-back period for determining creditable coverage will be extended from 63 days to 90 days.
- The penalty for not having creditable coverage will be increased from 1% per month to 2% per month.
These changes are designed to make it easier for beneficiaries to obtain creditable coverage and avoid penalties. The expanded definition of creditable coverage will allow more beneficiaries to qualify for LIS programs, which can help them to afford the cost of their prescription drugs. The extended look-back period will give beneficiaries more time to obtain creditable coverage after they lose their previous coverage. And the increased penalty for not having creditable coverage will encourage beneficiaries to obtain coverage as soon as possible.
People Also Ask About Medicare Part D Creditable Coverage in 2025
What is Medicare Part D creditable coverage?
Medicare Part D creditable coverage is prescription drug coverage that is at least as good as Medicare Part D. Creditable coverage can be provided by a variety of sources, including Medicare Part D plans, employer-sponsored group health plans, and other government programs.
Why is creditable coverage important?
Creditable coverage is important because it can help you to avoid penalties. If you do not have creditable coverage, you may have to pay a penalty of 1% per month for each month that you do not have coverage. This penalty can add up quickly, so it is important to make sure that you have creditable coverage.
How do I get creditable coverage?
There are a variety of ways to get creditable coverage. You can enroll in a Medicare Part D plan, join an employer-sponsored group health plan, or participate in another government program that provides creditable coverage.
What are the changes to the Medicare Part D creditable coverage rules for 2025?
The Centers for Medicare & Medicaid Services (CMS) has announced the following changes to the Medicare Part D creditable coverage rules for 2025:
- The definition of “creditable coverage” will be expanded to include certain low-income subsidy (LIS) programs.
- The look-back period for determining creditable coverage will be extended from 63 days to 90 days.
- The penalty for not having creditable coverage will be increased from 1% per month to 2% per month.
