NEW YORK (MONEY Magazine) - Q. How do I know if the benefit is right for me?

If you don't have any prescription drug coverage now, the decision is relatively easy: Sign up with Medicare.

Although the magnitude of the projected savings for the uninsured varies, almost everyone agrees you're likely to come out ahead. In addition, you get that financial protection against big drug bills you may incur in the future.

"Unless you have a crystal ball that guarantees you'll be healthy for the next year, you're better off signing up if you can afford it," says Robert Hayes, president of the Medicare Rights Center.

If you already have drug coverage from a former employer, on the other hand, you're probably better off sticking with what you've got. Retiree health plans usually offer drug benefits that are at least as good as those Medicare will provide and are often far better, particularly because there's no doughnut hole to worry about.

As long as your retiree plan provides what's known as creditable coverage (that is, you receive a notice that your coverage is at least as good as the basic Medicare plan), you'll still be able to switch to the government program without penalty at a later date if you need to.

If instead you are currently paying for a supplementary Medigap policy with a drug benefit, you will probably want to switch to a Medicare plan now. Most Medigap policies have less generous drug benefits than the PDPs will offer and will not be considered creditable coverage. (For more on what to do about your Medigap policy, click here.)

Can I sign up later? >>

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