MEDICARE PRESCRIPTION DRUG COVERAGE (PART D)
Medicare offers prescription drug coverage to everyone with Medicare. Even if you don't take a lot of prescriptions now, you should still consider joining a Medicare drug plan. To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. If you decide not to join a Medicare drug plan when you're first eligible, and you don't have other creditable prescription drug coverage, you will likely pay a late enrollment penalty.
There are two ways to get Medicare prescription drug coverage:
- Medicare Prescription Drug Plans.
- These plans (sometimes called, PDPs) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
- Medicare Advantage Plans (like an HMO or PPO) or other Medicare health plans that offer Medicare prescription drug coverage.
You get all of your Part A and Part B coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called MA-PDs.
Who Can Get Medicare Drug Coverage?
To join a Medicare Prescription Drug Plan, you must have Medicare Part A or Part B. To join a Medicare Advantage Plan, you must have Part A and Part B. You must also live in the service area of the Medicare drug plan you want to join.
If you have employer or union coverage, call your benefits administrator before you make any changes, or before you sign up for any other coverage. If you drop your employer or union coverage, you may not be able to get it back. You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health (doctor and hospital) coverage. If you drop coverage for yourself, you may also have to drop coverage for your spouse and dependents.
How Do You Join?
Once you choose a Medicare drug plan, you may be able to join by completing a paper application, calling the plan, or enrolling on the plan's Web site or on www.medicare.gov. You can also enroll by calling 1-800-MEDICARE (1-800-633-4227). When you join a Medicare drug plan, you will have to provide your Medicare number and the date your Part A and/or Part B coverage started. This information is on your Medicare card. Note: Medicare drug plans aren't allowed to call you to enroll you in a plan. Call 1-800-MEDICARE to report a plan that does this.
What You Pay
The insurance companies that offer Medicare Part D drug plans (and Medicare Advantage plans with drug coverage) set their own prices. Monthly premiums for drug plans can vary widely, even for similar coverage
In Medicare Part D, you'll pay a share of the cost of the medications you take. Each plan that provides drug coverage, whether it's a stand-alone plan or a Medicare Advantage plan with drug coverage built-in, will include cost sharing. Each plan that provides drug coverage will share costs a little differently. Your actual drug plan costs will vary depending on the prescriptions you use, the plan you choose, whether you go to a pharmacy in your plan's network and whether your drugs are on your plan's formulary and what "coverage period" or "stage" you are in.
Some plans charge a deductible and some don't. Some drug plans charge a copay each time you fill a prescription and some drug plans charge a percentage of the cost(coinsurance) when you fill a prescription.
Regardless of how the premiums, deductibles, co-payments and coinsurance are configured by the drug plans, they all have to follow the guidelines set by Medicare relative to the structure that calls for different levels of cost-sharing the member pays during certain "stages" or "coverage periods".
Below are the "coverage periods" or "stages" of cost sharing you make throughout the year in a Medicare drug plan.
The amount a you must pay for prescriptions before Original Medicare, the Medicare Drug plan, or other insurance begins to pay. In 2023 this deductible would be a maximum of $505. The actual deductible you would pay may be less than this amount( or zero) depending on your particular plan.
Initial Coverage Period
The period after you have met your deductible (if any) and before your total prescription drug expenses have reached $4,660 (2023), including amounts that you have paid along with what the plan has paid on your behalf. When your total prescription drug costs exceed $4,660 (2023) you enter the "Coverage Gap".
Once you and the plan have spent $4,660 (2023) for covered drugs, you are in the Coverage Gap. While in the Coverage Gap you will pay 25% of the costs of generic drugs and 25% of the costs of most brand name drugs. Once your True Out-of-Pocket Costs (TrOOP) have reached $7400 (2023) your coverage in the gap ends and you enter the Catastrophic Coverage Period. Your True Out-of -pocket Costs (TrOOP) include the amounts you have paid or others have paid on your behalf towards your prescription drugs including deductibles, co-pays, coinsurance and payments made in the Coverage Gap. Premiums do not count towards true out-of-pocket costs.
Once you have entered the Catastrophic Coverage period the plan pays the majority of the prescription drug costs till the end of the year. Your costs during the Catastrophic Coverage period will be the greater of $4.15 (2023) for generic drugs, $10.35 (2023) for brand name drugs (or 5% of the retail drug cost, whichever is higher). Please note that January 1 initiates a new cycle starting with your deductible (if you have one).
Choosing a Medicare Drug plan
You can find a Medicare Part D plan that's right for you if you shop carefully. It's easy to focus only on your premium amount, but there are other things to look at when you choose a plan. For example, you should also look at your estimated out-of-pocket spending. That depends on the plan's cost sharing (deductibles, copays, and coinsurance) and the plan's prices for the drugs you take.
Also consider whether the plan offers a mail-order option, which can make it more convenient to get your drugs. You should also check the plan's formulary to see if it covers the drugs you take. What's a formulary? It's a list of the drugs that a plan covers. Each Medicare Part D plan has its own formulary. Additionally always check to see if the Drug plan you are thinking of selecting has any generic drug coverage in the Coverage Gap. Some Drug plans provide this extra coverage( sometimes for an additional costs) so it's wise to do a direct comparison of these plans plugging in the specific drugs you are currently using to see if you will benefit. It is also very important to check to see if the plan you are choosing has any restrictions.
Watch for Restrictions on Drug plans you may want to choose:
You and/or your prescriber (your doctor or other health care provider) must contact the drug plan before you can fill certain prescriptions. .
There may be limits on how much medication you can get at a time.
You must try one or more similar, lower cost drugs before the plan will cover the prescribed drug.
Common Medicare Part D Questions:
Original Medicare is the foundational coverage that offers health insurance for millions of Americans. It contains two primary benefits, Part A (Hospital Coverage) and Part B (Medical Coverage).
While these benefits will offer you coverage for many critical medical services, they will not cover any of your regular prescription drug costs. Rather, you will be able to receive this coverage through a Medicare Part D prescription drug plan. These are private plans that are designed to offer you coverage for your prescription drug costs while working in conjunction with your existing Medicare coverage.
Within your Medicare Part D plan you will receive coverage for generic, brand-name and specialty drugs to combat a variety of illnesses and conditions.
All these plans must meet standards set by Medicare regulations, but health insurers retain the right to set certain terms within their plans as well. Keep the following in mind when comparing your options:
Your plan choices may be limited depending on the policies available in your area.
To receive optimized coverage and the lowest costs, you should use a pharmacy within your plan’s network.
Insurers will use different formulas to set the costs of each prescription in their formulary.
Most plans must give patients a choice of drugs. You can ask your doctor to appeal for coverage if your plan does not already cover a drug you need.
Plans also include coverage phases—initial coverage, the donut hole and catastrophic coverage—that you encounter based on how much you are spending on prescriptions. Your drug costs might vary depending on where you are in the plan cycle.
Medicare Part D plans vary widely, and only certain plans are available in certain communities. The best one for you will be one that you can obtain both affordably and that offers you the appropriate level of benefits for your medication needs.
Our agents can help you review each of your policy options to determine the one that is most optimal for you.