MEDICARE PART D
Medicare Part D
What it covers: Prescription Drugs
Medicare Part D provides prescription drug coverage that is supplemental to your Medicare Part A and Part B plans.
Medicare Part D plans are pre-approved private insurance policies that meet Medicare requirements. To be eligible for Medicare Part D, you must be actively enrolled in at least Medicare Part A, and usually in both Part A and Part B. This prescription drug benefit under Part D is then added to your current Medicare Part A and B plan.
Medicare Part C plans, also called Medicare Advantage plans, usually (but not always) include prescription drug coverage and thus don’t typically require an additional purchase of a Part D plan.
Compared to Original Medicare (Parts A and B)
Original Medicare doesn’t cover most of your medications. Part A covers drugs you get as a hospital inpatient only. Part B covers drugs you get as an outpatient, but in very limited cases, like infusion drugs.
The drugs that are covered by a Medicare Part D plan and their pricing are listed in the plan’s formulary, which you can request to see. Plans can change the drugs on their formulary during the course of the year as long as they give 60 days notice.
Medicare does not require that all drugs be covered. As long as the plan’s formulary and benefit structure are not designed to discourage enrollment by certain Medicare beneficiaries, they are legal.
Medicare Part D coverage excludes drugs not approved by the Food and Drug Administration, those prescribed for off-label use, drugs not available by prescription for purchase in the United States, and drugs which are covered under Parts A or B of Medicare. Part D coverage also excludes drugs for weight issues, fertility treatment, and purely cosmetic purposes. They also don’t cover vitamins and mineral supplements.
What Does Medicare Part D Cost?
If you are enrolled in Medicare Part D and Medicare Part B or Medicare Advantage you must continue paying the part B premium in addition to your Part D premium. You might be required to pay a deductible and copayment/coinsurance if you have Medicare Part D. The government regulates some of the costs you might have with Medicare Part D plans such as preventing deductibles from being higher than $400.
Low-Income Subsidy offered by Medicare assists eligible people who have low incomes to pay for Medicare Part D. If you are are eligible for Medicare and receive full state Medicaid, are part of a medicare Savings program, or receive supplemental security income you are eligible for Low-Income Subsidy.
Medicare Part D will automatically sign you up for a plan if you are eligible but have not already enrolled in a plan.
Who Signs Up
While enrollment in Medicare Part A is often automatic for those that qualify for premium-free coverage, enrollment in Medicare Part D is voluntary.
You can enroll in Medicare Part D through either Original Medicare (Part A and Part B), you can get prescription drug coverage through buying a Medicare Advantage plan (Medicare Part C plan) that includes that coverage.
Where to Sign Up
Once you choose a Medicare Part D plan, you can enroll on on the plan’s website, or you can call the Medicare number at 1-800-MEDICARE (1-800-633-4227).
When you join a Medicare drug plan, you’ll need to give your Medicare number and the date your Part A and/or Part B coverage started. This information is on your Medicare card.
When To Sign Up
You can sign up for Medicare Part D coverage during the Initial enrollment Period or the Annual Election Period, or Special Election Period.
Initial enrollment period
Begins three months before your 65th birthday and is seven months long
Annual enrollment period
Takes place from October 15 to December 7 every year
Special election period
Enables you to enroll in Part D plans if you have a qualifying life event such as moving outside your currents plan’s service area
Avoiding the Coverage Gap in Medicare Part D
When you’ve reached your coverage limit, you pay a higher portion of your prescription drug costs. After you’ve spent a certain amount more, you’ll reach the catastrophic coverage phase. Then you will pay only a small copayment or coinsurance for your covered medications for the rest of the year. This spending amount above your coverage limit and below the catastrophic coverage start is often called the “donut hole,” since your insurance coverage is much lower in this spending gap.
The lists of drugs covered by a Part D plan are listed in their formulary, which must be provided to you. Typically, this formulary will segregate drugs into different cost and reimbursement categories. The plan may also specify preferred pharmacy chains or mail order programs.
You can try to minimize your costs by
- Changing from brand name drugs to generic drugs, which are usually much less expensive.
- Using your plan’s mail-order prescription programs.
- Choosing your plan’s in-network pharmacies.
- Looking for discounted prescription prices through your Medicare plan membership.