Part D: Prescription Drug Plan

Your Prescription Drug Plan may be included in your Medicare Advantage Plan or it can be a stand alone Prescription Drug Plan 

Pros

  • Using drug plans in the network pharmacy ensures lower drug costs

  • $0 co-pay for some generics thru mail order delivery

  • You may qualify for Extra Help paying your Prescription Drug Plan premium,

  • copays, & deductibles

Cons

  • May have monthly premium, annual deductible, copays, and "donut hole" coverage gap.

  • Subject to Late Enrollment Penalty if no creditable drug coverage 

Medicare Part D insurance helps you pay for your prescription drugs. Original Medicare (Parts A & B) does not cover most prescription drugs. If you currently use prescription drugs or know you may in the future, you may want to enroll in a Part D plan.

It's your choice. Part D enrollment is optional. However, if you don't enroll in a Part D plan during your Initial Enrollment Period (when you 1st begin Part B) you may have to pay a late enrollment penalty.

 

Extra Help paying for

Prescription Drug Costs

 

If you qualify for Extra Help, you do not have to pay

a late enrollment penalty (LEP), Also, if you have other prescription drug coverage at least as good as Medicare (known as creditable coverage), you may not be assessed a late enrollment penalty.

Frequently Asked Prescription Drug Questions

Who is eligible for Part D?

Choosing a Part D plan

Late enrollment penalty

Key Part D Terms to know

Your Part D Prescription Drug Costs

Prescription drug coverage stages

Ways to reduce Rx costs

How to begin prescription drug coverage?

Learn More

Who is Eligible for a Part D Plan? 

Everyone who qualifies for Medicare is eligible for a Part D plan. You may enroll in a

Part D plan through a private insurance company.

There are two ways you can be covered by Part D:

  1. A standalone Part D prescription drug plan

  2. A Medicare Advantage (Part C) plan that includes Part D

What should I consider when choosing a Part D plan?
All Part D plans must meet the same basic guidelines created by the federal government. But not all plans are the same.

  • Each plan has a list of drugs that it covers. This list is called a formulary. Before    choosing a Part D plan, review the plans formulary to make sure the drugs you need are covered.

  • Each plan has different costs. When deciding on a plan, check the annual deductible, premiums, co-pays, and coinsurance to see how much you'll likely pay.

Even if you are not taking prescription drugs today, it may be wise to enroll in Part D when you become eligible for Medicare. That's because if you wait to sign up, you may have to pay Medicare's late enrollment penalty. This is a fee that gets added to your monthly premium unless you qualify for an exception.

 

Choosing a Part D Plan

When can I enroll in Part D?

You can enroll in Part D when you first become eligible for Medicare, which is known as the Initial Enrollment Period (IEP). For most, this includes the 3 months before the month you turn 65, the month of your birthday and the 3 months after your birthday.

The start date for your coverage depends on when you enroll:

  • If you enroll before your birthday month begins, coverage starts on the first day of your birthday month

  • If you enroll during your birthday month or later, coverage starts on the first day of the month following the date you enroll

If I choose Part D coverage, can I change it later?

If your needs change or if  you are not satisfied with your plan, you an change your Part D plan every year during the Medicare Annual Enrollment Period, from October 15 to December 7. You can also switch plans if you move out of your plan's service area.

 

Late Enrollment Penalty

You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period (when you turn age 65) is over, you go without one of these:

  • A Medicare Prescription Drug Plan (Part D)

  • A Medicare Advantage Plan (Part C) (like an HMO or PPO) or another Medicare health plan that offers Medicare prescription drug coverage

  • Creditable prescription drug coverage

The late enrollment penalty is an amount added to your Medicare Part D monthly premium.

How much is the Part D penalty?

The cost of the late enrollment penalty depends on how long you went without

Part D or creditable prescription drug coverage.

Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($33.06 in 2021) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.

The national base beneficiary premium may change each year, so your penalty amount may also change each year.

How do I know if I owe a penalty?

After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be. In general, you'll have to pay this penalty for as long as you have a Medicare drug plan.

 

Coinsurance

A percentage of the cost for a covered service that you pay when you recieve it. For example, you might pay 20% and Medicare or your Medicare plan would pay the remaining 80%

Copay

A fixed amount you pay at the time you receive a covered service. For example, you might pay $10 when you fill a prescription and Medicare pays the rest.

Deductible

A set amount you pay out of pocket for covered services before Medicare or your Medicare Plan B

Key Prescription Drug plan terms you should know

 

Your actual drug coverage costs will vary depending on:

  • Your prescriptions and whether they’re on your plan’s list of covered drugs (formulary).

  • What “tier” the drug is in.

  • Which drug benefit phase you’re in (whether you’ve met your deductible, or if you’re in the catastrophic coverage phase).

  • Which pharmacy you use (whether it offers preferred or standard cost sharing, is out of network, or is mail order). Your out-of-pocket drug costs may be less at a preferred pharmacy because it has agreed with your plan to charge less.  

  • Whether you get extra help paying your drug coverage costs.

Your Part D Prescription Drug Costs

 

Drug Coverage Stages

With Medicare Part D prescription drug coverage, the amount you pay for prescriptions may change over the year.

• Part D plans have four coverage stages: Annual deductible, Initial coverage stage, Coverage gap stage, and Catastrophic coverage stage.

• The amount you pay for your medications changes depending on the coverage stage you are in.

• You move through the coverage stages based on your total out-of-pocket costs for medications from the start of the plan year.

• The coverage stage cycle starts over at the beginning of each plan year.

• Individual Part D plans explain specific coverage and costs in the Summary of Benefits or Evidence of Coverage materials.

More about the coverage gap

Your out-of-pocket costs for medications go up if you enter the coverage gap stage.

  • People who take few medications may stay in the deductible or initial coverage   stage and never enter the coverage gap.

  • People who take many medications or whose medications are expensive could enter the coverage gap stage.

  • Some people may move through the coverage gap stage and into the catastrophic coverage stage where out-of-pocket costs go back down for the remainder of the year.

  • If you get Extra Help from Social Security, the coverage gap doesn't apply to you.

 

Ways to Lower Your Prescription Costs

• Ask your doctor if your medications have generic or lower-cost options available.

• Consider getting 3-month supplies of your medications from a mail-order pharmacy, which may lower your copays

• If enrolled in a Part D plan, use your plan's preferred pharmacies to help save money

• Apply for assistance from private, state, or federal programs that may help reduce your drug costs

What if I can't afford my medications?

If you are on a limited income and you enroll in Part D, you may qualify for Extra Help to pay for our premiums, deductibles, and co-pays.

• To see if  you qualify for Extra Help, call your local agent or Medicare at 1-877-486-2048

• Or call the Social Security Administration at 1-800-772-1213, TTY 1-800-325-0778, between 7 a.m. and 7 p.m., Monday through Friday

You can also call your state Medicaid office for more information and assistance.

 

How to get started

Visit Medicare.gov

See which plans are available in your area

Review each plan's formulary (drug list)

Make sure the drugs you need are covered. If one of your drugs is not on the formulary, your doctor may be able to help you find a covered drug that will work for you.

Review the costs of each plan

Consider the annual deductible, copays and coinsurance, and your costs during the coverage gap stage.

Review the pharmacies in the plan network

Some plans include a convenient mail order pharmacy that may save you money.

 

Learn More

Want to learn more?

Visit MedicareMadeClear.com

Medicare

1-800-MEDICARE (1-800-633-4227), TT 1-877-486-2048

Medicare.gov

Social Security Administration

1-800-772-1213, TTY 1-800-325-0778

SSA.gov

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