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Understanding Medicare Part D

Medicare Part D provides coverage to help with paying for the cost of prescription medications. Unlike Medicare Part A and Part B, Medicare Part D is not offered directly through Medicare itself, but rather via private insurance companies.

There are two different ways in which an individual who is eligible can obtain Medicare Part D coverage. One way is to purchase it separately, in conjunction with Medicare Part A and Part B (Original Medicare) coverage. The other way is to join a Medicare Advantage plan (Medicare Part C) that also includes Medicare Part D prescription drug coverage. There are also supplemental plans out there that you can enroll in that will help cover the costs that Medicare does not cover, such as Medicare Part F Supplement and Medicare Part G Supplement.

Medicare Part D board

What Does Medicare Part D Cover?

The actual benefits offered through Medicare Part D will vary plan to plan. All part D plans of Medicare have its “formulary.” This is a list of prescription medications.

Many of the drug plans will allocate these covered medications into different tiers on their formularies, and in turn, each of the medications that are in each of the tiers will have different costs.

For instance, a prescription drug that may be listed in a lower tier will usually have a lower cost than a drug that is listed in a higher tier. But, there may be some instances where a prescriber feels that an enrollee needs a drug that is listed in a higher tier instead of one that is listed in a lower tier where he or she can obtain an exception for a lower copayment amount.

In addition to prescription drugs, there are other forms of drugs that Medicare Part D may also cover. For instance, other than for vaccines that are covered through Medicare Part B, Medicare drug plans are necessary to cover all commercially available vaccines, for example, the shingles vaccine, when they are deemed to be medically necessary for preventing illnesses.

Also, in many cases, the prescriptions that are obtained in hospital outpatient settings, such as when an individual is in the ER, are not usually covered via Medicare Part B. These are often referred to as self-administered drugs.

Medicare Part D prescription drug coverage may provide coverage for these medications under certain circumstances. Here, you may be required to pay out of pocket initially, and then submit a claim to the Medicare Part D plan to obtain your reimbursement.

Who is Eligible for Medicare Part D Coverage?

In order to be eligible for enrollment in Medicare Part D prescription drug coverage, an individual must also be eligible for, and be enrolled in, Original Medicare (Medicare Part A and Part B). The person must also reside within the network of the plan in which he or she wishes to join.

Depending on an individual’s circumstances, there are different times when it may be right to enroll initially in a Medicare Part D prescription drug plan. There are also various times when it may be right to change or to drop this particular coverage.

When an individual is initially eligible for Original Medicare (Part A and Part B), he or she will also be allowed to enroll in Medicare Part D. In most cases, you may remain enrolled in the Part D plan throughout the entire year.

The time period for Medicare Part D enrollment is the seven-month period that starts three months prior to the month in which you turn age 65, and it includes the month of your 65th birthday. It ends three months after the month in which you turn age 65.

Also, between October 15 and December 7 of each year, anyone who is eligible to either join, change or dis-enroll in a Medicare Part D prescription drug plan can do so, provided that they have their request in for either the enrollment or the change by the deadline date of December 7.

There are also special enrollment periods allowed for those who are qualified. These are based on certain situations. Some of these include if an individual has:

  • Moved out of the current Plan D service area;
  • Lost his or her creditable prescription drug coverage;
  • Recently qualified for Medicaid coverage;
  • Moved into a skilled nursing home or other similar type of institution;
  • Qualified for the Extra Help program.

How Much Does Medicare Part D Cost?

There are various costs involved with Medicare Part D prescription drug coverage. First, there is a premium cost for these plans. Because Medicare Part D is offered through private insurance companies, the premium can vary from one insurer to another – so it is important to shop around before making your final purchase choice.

There are other costs involved with Medicare Part D, too. For example, these plans may have an annual deductible. This is the amount that you may have to pay before the plan’s coverage will begin. The government sets a maximum amount of deductible that can be charged each year. However, insurance plans can charge less than this – and there are some plans that charge no deductible at all.

There can also be coinsurance and / or copayments. If copayments and / or coinsurance is required, Medicare Part D enrollees will be responsible for paying these amounts once they have paid their plan’s deductible amount. For example, you may be required to pay a copayment amount of $20 with each prescription that you get refilled.

Those who are enrolled in Medicare Part D may also get caught in what is referred to as the “donut hole” or coverage gap. Each year, after a Medicare Part D plan enrollee and his or her plan, have spent a certain amount on prescription medications, the enrollee may enter into this gap. When this is the case, the individual will – during that term – be required to pay all costs for their prescription drugs out-of-pocket.

While in the coverage gap, there can be discounts on the price of both name brand and generic drugs. Then, once the enrollee has paid up to a certain amount out-of-pocket, their plan will begin catastrophic coverage. During that time, the individual will only need to pay a small coinsurance or copayment amount, while the plan will pay the remainder of the cost.

When comparing Part D plans, you will want to ensure that the plan you are considering will cover the prescription drug (or drugs) that you require. You should also compare what the cumulative out-of-pocket costs may be as this can make a big difference over time.

Medicare Advantage – An Alternative to Original Medicare

For those who want an alternative to the way in which they receive their Medicare Part A and B (Original Medicare) benefits, there is Medicare Advantage. This coverage provides all of the same coverage (other than hospice care – which is provided regardless by Original Medicare, even for those with Medicare Advantage) – plus additional benefits, such as dental, vision, or wellness coverage.

Many of the Medicare Advantage plans that are available in the marketplace today will already have Part D prescription drug benefits automatically included. Therefore, unlike being enrolled in Original Medicare, Part D coverage does not need to be separately purchased when you have a Medicare Advantage plan.

How to Get the Best Premiums on Medicare Prescription Drug Coverage

If you are seeking the best premium quotes for Medicare Part D coverage, the best way to go about it is to work with a company or an agency that has access to more than just one insurance carrier. This way, you will be able to compare different plans – as well as premium prices – and from there you can determine what will work the best for you and your specific needs and goals.

Should you find that you have any additional questions regarding Medicare Advantage coverage – or even if you just have a question about Medicare in general – please feel free to contact us directly. We can be reached via phone, toll-free, by dialing 800-376-0824.

Our experts can help you to go through all of the ins and outs of Medicare Part D in order to ensure that you understand how the plan works, and how a Medicare Advantage plan can benefit you with the prescription drug coverage that you need – along with your other Medicare benefits. We understand that wading through the Medicare marketplace can be confusing. But, now you have an ally on your side. So, contact us today – we’re here to help.

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