7.1 Part D Overview & Eligibility

AHIP Medicare Certification Exam

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1 Introduction

1.1 About the AHIP Medicare Certification Exam 1.2 How to Use This Study Guide

2 Chapter 2: Medicare Program Fundamentals

2.1 What Medicare Is: Program Structure & How Parts A–D Fit Together 2.2 Medicare Part A — Hospital Insurance 2.3 Medicare Part B — Medical Insurance 2.4 Medicare Eligibility Rules (Age 65, Disability, ESRD, ALS)

3 Chapter 3: Medicare Enrollment Periods

3.1 Initial Enrollment Period (IEP) 3.2 Annual Enrollment Period (AEP): October 15 – December 7 3.3 Medicare Advantage Open Enrollment Period (MA OEP): January 1 – March 31 3.4 Special Enrollment Periods (SEPs) & Qualifying Life Events 3.5 Late Enrollment Penalties (Part A, Part B, Part D)

4 Chapter 4: Medigap & Coordination of Coverage

4.1 Medigap (Medicare Supplement) Basics & Guaranteed Issue Rights 4.2 Dual Eligibility & Medicare Savings Programs 4.3 How Original Medicare, MA, Part D & Medigap Interact

5 Chapter 5: Medicare Advantage Plan Types

5.1 Medicare Advantage (Part C) Overview: How MA Differs from Original Medicare 5.2 HMO & HMO-POS Plans 5.3 PPO Plans 5.4 PFFS Plans (Private Fee-for-Service) 5.5 MSA Plans (Medicare Medical Savings Accounts) 5.6 Cost Plans & Employer Group Waiver Plans (EGWPs)

6 Chapter 6: Special Needs Plans & MA Plan Design

6.1 Special Needs Plans (SNPs) Overview 6.2 D-SNP — Dual-Eligible Special Needs Plans 6.3 C-SNP & I-SNP — Chronic Condition & Institutional Special Needs Plans 6.4 MA Benefits, MOOP & Supplemental Benefits 6.5 MA Star Ratings & Plan Quality

7 Chapter 7: Part D Structure & the 2026 Redesign

7.1 Part D Overview & Eligibility 7.2 Formularies & Drug Tiers 7.3 The 2026 Part D Benefit Redesign ($2,100 OOP Cap, $615 Max Deductible, Catastrophic Phase) 7.4 Medicare Prescription Payment Plan (Drug-Cost Smoothing)

8 Chapter 8: Part D Costs, Assistance & Appeals

8.1 Low-Income Subsidy (LIS) / Extra Help 8.2 Part D Late Enrollment Penalty & Creditable Coverage 8.3 Coverage Determinations, Exceptions & Appeals

9 Chapter 9: CMS Marketing Rules & Scope of Appointment

9.1 CMS Medicare Communications & Marketing Guidelines (MCMG) Overview 9.2 Scope of Appointment (SOA): the 48-Hour Rule & Exceptions 9.3 Permitted vs. Prohibited Marketing & Sales Activities 9.4 Marketing Events vs. Educational Events

10 Chapter 10: Enrollment & Disclosure Requirements

10.1 The Pre-Enrollment Checklist (PEC) 10.2 Enrollment Procedures & Application Requirements 10.3 Call Recording & Third-Party Marketing Organization (TPMO) Disclaimers 10.4 Agent & Broker Compensation Rules

11 Chapter 11: Marketing Conduct & Oversight

11.1 Cross-Selling Restrictions & Nominal Gift Value Rules 11.2 Marketing to Vulnerable Populations & Non-Discrimination in Sales 11.3 Website, Social Media & Advertising Compliance 11.4 Complaint Tracking Module (CTM) & Agent Oversight

12 Chapter 12: Understanding Fraud, Waste & Abuse

12.1 Defining Fraud, Waste & Abuse (and the Difference Between Them) 12.2 The False Claims Act 12.3 The Anti-Kickback Statute

13 Chapter 13: Compliance Laws & Screening

13.1 The Stark Law (Physician Self-Referral) 13.2 HIPAA Privacy & Security Basics 13.3 The OIG Exclusion List & Sanctioned-Provider Screening

14 Chapter 14: Reporting, Compliance Programs & Consequences

14.1 Detecting & Reporting FWA 14.2 Compliance Program Requirements (Seven Core Elements) & Non-Discrimination Training 14.3 Consequences & Corrective Action Plans

7.1 Part D Overview & Eligibility

Key Takeaways Explain This Topic AI

Part D is a voluntary benefit created by the MMA of 2003, effective January 1, 2006, and is delivered exclusively through private plans — never directly by CMS.

As of February 2026, 56.1 million beneficiaries have Part D coverage: 31.3 million (56%) via MA-PD and 24.9 million (44%) via standalone PDP (KFF).

Eligibility requires entitlement to Part A OR enrollment in Part B (not both) plus residence in the plan's service area — there is no medical underwriting.

A beneficiary generally cannot hold both a standalone PDP and an MA-PD simultaneously; enrolling in a PDP while in an MA-PD triggers implicit disenrollment from the MA-PD.

Dual eligibles who do not pick a plan are auto-enrolled into a benchmark PDP, and LIS-eligible beneficiaries receive similar facilitated enrollment — both retain the right to switch anytime via SEP.

Last updated: July 2026

Why Part D Overview & Eligibility Matters on the AHIP Exam

Module 3 (Part D Prescription Drug Plans) carries a 15% weight on the AHIP Medicare final — the lightest of the five modules, but do not mistake "lightest" for "skippable." Every agent selling a Medicare Advantage Prescription Drug (MA-PD) plan or a standalone Prescription Drug Plan (PDP) is legally required to get the mechanics of Part D right, because a client who cannot afford their insulin or cardiac medication because you enrolled them in the wrong plan type is both a compliance problem and a real harm. The AHIP exam tests whether you know who can enroll , how they get coverage, and when enrollment happens — and Module 3 questions frequently combine with Module 1 (enrollment periods) and Module 4 (marketing rules), so a shaky foundation here costs you points in three modules, not one.

What Medicare Part D Is

Medicare Part D is the voluntary outpatient prescription drug benefit created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) , effective January 1, 2006. Unlike Part A and Part B, which the federal government administers directly, Part D benefits are delivered exclusively through private insurance companies under contract with the Centers for Medicare & Medicaid Services (CMS). This is a foundational exam point: there is no "Original Medicare Part D" — every beneficiary who wants drug coverage must enroll in a private plan.

As of February 2026, 56.1 million Medicare beneficiaries are enrolled in Part D coverage, according to KFF analysis of CMS enrollment data. Of that group:

• Delivery Path Enrollment (Feb 2026) Share
• Medicare Advantage Prescription Drug (MA-PD) plans 31.3 million 56%
• Standalone Prescription Drug Plans (PDPs) 24.9 million 44%
• Two Ways to Get Part D Coverage

A beneficiary gets Part D drug coverage one of two ways, and the AHIP exam expects you to know the rule that connects them:

Standalone PDP — paired with Original Medicare (Parts A and B), or with a Medicare Advantage plan that does not include drug coverage (an MA Medical Savings Account plan, or certain Private Fee-for-Service plans without embedded Part D).

MA-PD — drug coverage bundled directly into a Medicare Advantage (Part C) plan, such as an HMO-PD or PPO-PD.

The one-plan rule: a beneficiary generally cannot be enrolled in both a standalone PDP and an MA-PD at the same time. If someone already in an MA-PD plan enrolls in a standalone PDP, CMS will treat that as an implicit request to disenroll from the MA-PD and return to Original Medicare — an outcome that can blow up a client's coverage if an agent does not explain it clearly. The recognized exception is Medicare Medical Savings Account (MSA) plans and some Cost Plans, which are legally barred from including Part D benefits, so enrollees in those plans are expected to pair them with a standalone PDP.

Eligibility Requirements

To enroll in Part D, a person must:

Be entitled to Medicare Part A or enrolled in Medicare Part B (only one of the two is required, not both), and

Live in the service area of the plan they want to join.

There is no income test, no health screening, and no medical underwriting for Part D enrollment itself (though premiums can carry an income-related surcharge — the Income-Related Monthly Adjustment Amount, or IRMAA — for higher earners, similar to Part B).

Enrollment Timing (Cross-Reference)

Part D follows the same enrollment period structure taught in Chapter 3: the Initial Enrollment Period (IEP) , the Annual Enrollment Period (AEP, October 15 – December 7) , and various Special Enrollment Periods (SEPs) . One detail specific to Part D: someone who delays enrollling without creditable coverage (drug coverage at least as good as standard Part D, such as many employer plans) can face a Late Enrollment Penalty (LEP) that accrues for every month of the gap — covered in full in Section 8.2. Do not confuse Part D's LEP mechanics with the MA OEP (Medicare Advantage Open Enrollment Period, January 1 – March 31), which allows only one MA-to-MA or MA-to-Original-Medicare switch and does not independently open standalone PDP enrollment for someone who stayed in Original Medicare all along.

Auto-Enrollment and Facilitated Enrollment

CMS does not leave the most vulnerable beneficiaries without drug coverage by default:

Dual eligibles (people enrolled in both Medicare and Medicaid) who do not actively choose a PDP are auto-enrolled into a randomly assigned benchmark plan (a plan with premiums at or below the regional low-income subsidy benchmark) so they are never without coverage.

Other beneficiaries who qualify for the Low-Income Subsidy (LIS/Extra Help) but have not selected a plan receive facilitated enrollment , a similar CMS-driven assignment process.

Agents should know that these beneficiaries retain the right to switch out of their assigned plan at any time using a Special Enrollment Period — auto-enrollment is a safety net, not a lock-in.

Common Exam Traps

Thinking Part D is administered by CMS directly — it is always a private plan.

Forgetting that MSA plans require a standalone PDP because they are barred from bundling drug coverage.

Assuming both Part A and Part B are required for Part D eligibility — only one is required.

Confusing "creditable coverage" (employer coverage that lets you delay Part D penalty-free) with "no coverage" (which starts the LEP clock running).

Quick Scenario

A client turning 65 has excellent drug coverage through a spouse's employer plan and wants to delay Part D. Before recommending that, an agent must confirm in writing that the employer plan is documented as creditable coverage — otherwise the client accrues an LEP the moment they do eventually enroll, calculated from the end of their IEP.