Medicare Part D Prescription Drug Plans are provided by private insurance companies similar to Medicare Supplements. These companies are contracted by Medicare, so costs and availability may be determined by where you live and what carriers are available. Part D plans can be stand-alone plans or can be a part of a Medicare Advantage plan.
Each Medicare Part D plan has to adhere to a standard set by the government regulations. But each company may cover different drugs in a list called a formulary. The formulary may differ with each plan. Plan A may cover your particular prescription, but Plan B may prefer that you use a generic of the brand name you are currently using. It is important that you research which Part D Prescription Drug Plan works best for your prescriptions.
Part D Costs
– Monthly Premium
– Part B Monthly Premium
– Yearly deductible: The government sets the maximum amount, which could change from year to year, but some plans do not charge a deductible to start coverage
– Co-payments and co-insurance
– Coverage Gap (“Donut Hole”) : The coverage gap starts after you and your plan have both spent a certain amount of money for covered prescriptions. Once you have reached the gap, the costs for drugs will be all out-of-pocket. Discounts may apply to brand name drugs as well as generic drug options while you are in the coverage gap. To reach catastrophic coverage you have to pay a certain out-of-pocket amount set by the government. Catastrophic coverage will cover almost all your drug costs leaving you to pay small co-payments or co-insurance.
What You Need to Know
- To enroll in Medicare Part D, you must be eligible for and enrolled in Medicare Part A and Part B.
- It is important those who are eligible for a Part D plan and do not have creditable drug coverage enroll during the Initial Enrollment Period, beginning the first month you turn 65, to avoid a late enrollment penalty.
- Plans and premiums are different. You should look for details on plans available in your area.