Medicare Part D
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Medicare Part D in 2019 & 2020
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.
Covered Prescriptions (Formularies)
A list of covered prescription drugs, also known as formularies, can vary depending on your specific plan in Medicare Part D. Plans can cover for both brand name prescriptions as well as generic drug coverage. It includes at least two drugs in the most prominently prescribed categories and classes. All drug plans must cover at least two drugs per category but plans choose which drugs they will offer.
Your plan may not include a specific drug you may be seeking but may instead provide a similar drug that suits your needs. You may ask for an exception if your prescriber believes that none of the drugs on your formary will work for your condition.
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 $415 as of 2019. Some drug plans do not have a deductible.
Low-Income Subsidy offered by Medicare assists eligible people who have low incomes to pay for Medicare Part D. If you 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.
Where to Sign Up
Once you choose a Medicare Part D plan, you can enroll on the 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 ends four months afterwards. It lasts seven months long in total.
Annual enrollment period
Takes place from October 15th to December 7th 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 current 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.
Minimizing 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.