What does Medicare Part D cover?
Medicare Part D throughout the United States.
What you need to know about Medicare Part D insurance benefits.
What is Medicare Part D?
Medicare Part D helps you pay for your prescription drug costs.
Medicare Part D was instituted in 2006 and was designed to aid Medicare beneficiaries cover the rising costs of retail prescription medications. Prior to 2006, most beneficiaries paid the entire cost of medications, with very little help.
Today, most Medicare recipients have drug coverage through a stand alone Medicare Part D Drug Plan or a Medicare Advantage Plan.
Medicare Part D plan are offered by a private insurance companies in the state you reside.
As a Medicare beneficiary, you have the option of voluntarily enrolling in Medicare Part D (prescription drug coverage) to help you cover your prescription drug costs.
Medicare Part D is available in two different ways:
- The first, is by enrolling in a stand-alone Medicare prescription drug plan which works alongside of your Original Medicare Part A and B benefits.
- The second way, you can receive your Part D benefits is by enrolling in a Medicare Advantage plan (Part C). This type of plan incorporates your Original Medicare Part A and B benefits along with your prescription drug.
Medicare Part D plans are managed by private insurance companies that are contracted by Medicare, so costs and availability may vary between insurance companies, and location.
How does Medicare Part D Work?
Medicare Part D is your Drug coverage. Medicare beneficiaries can purchase a stand alone Part D Drug plan or a Medicare Advantage Plan that includes prescription drug coverage.
Medicare Part D coverage allows beneficiaries to make co-payments rather than pay the full cost of medications. Additionally it provides protection against catastrophic drug costs.
Each year, during the annual enrollment period, Medicare beneficiaries can choose from several different plans available in their geographic area. These plans are managed by private insurance companies, but must follow very specific rules and guidelines set up by Medicare.
There are four stages to a Part D drug plan. Depending upon the drugs you take, you may pay different amounts in each stage.
Do I have to pay for Part D?
Enrolling in Part D (prescription drug coverage) is optional, unlike enrolling in Medicare (Parts A and B) which is mandatory.
Additionally, if you decide not to enroll in Medicare Part D when you first become eligible at age 65, you will be subject to a lifelong financial penalty if you decide to sign up for Part D at a later time.
How much does Medicare Part D cost?
You will pay a monthly premium for a Medicare Part D plan. Additionally you will have a cost sharing on your prescription medications when you get them filled at your pharmacy. The cost sharing may include a deductible amount, depending on the drug and plan you choose.
What is Medicare Part D premium?
The Medicare Part D premium is the amount you will pay each month for your prescription drug plan.
Medicare Part D monthly premium’s can vary from state to state. In 2018, the national average for a Part D drug plan was somewhere around $35 per month. However, some plans can be as low as $12 per month and some as high as $175+ per month.
Premiums for Part D plans can change each calendar year, and remain the same from January through December.
Additionally, those with higher incomes may pay more for their plan, due to IRMAA. IRMAA is the Income Monthly Adjusted Amount set up by Medicare each year.
What is Medicare Part B Deductible?
Some Medicare Part D plans include a drug deductible. The Center for Medicare and Medicaid (CMS) set the minimum guidelines for Part D plans each year, including the deductible.
There are four stages of your Part D drug plan and Medicare sets the threshold for each stage every year.
The deductible is the first stage of Part D drug plans. In 2019, the deductible has been set to $415. This means the insurance company can require you to pay the first $415 of drug expenses before your benefits kick-in. Not all plans have a drug deductible, and some may have a lower deductible than that set by CMS, but they can never charge more than the set amount for the deductible ($415 in 2019).
Plans that have no drug deductible or a low drug deductible will generally have a higher monthly premium and visa versa, those with low monthly premium will charge the drug deductible.
What are Medicare Part D copays?
In addition to paying your monthly premium, you will have some cost sharing when you get your prescriptions filled, or a copay.
Your copay will vary based on whether drug is generic or name brand and where you get your prescription filled.
Most plans will have preferred pharmacies and that is where you should get your medications filled because they cost less at preferred pharmacies.
Additionally, the insurance company will most likely have 4 or 5 drug tiers and your cost sharing will be bigger with a higher drug tier. For instance, if you are taking a generic medication, your drug will fall into the tier 1 or tier 2 category and you will likely pay somewhere between $0 to $10 for your drug at a preferred pharmacy. Conversely, if you are prescribed a new name brand medication your drug will likely fall into a tier 4 or 5 category and you will pay a much larger amount, because the drug is expensive.
For an estimate of your drugs we utilize the drug finder tool on www.medicare.gov. It allows us to see all the different drug plans in your area and the cost of the drugs in each plan. This is a part of our service to you so you can have a good idea of what your drugs will cost you for the year.
Can I get extra help for my Part D costs?
You may qualify for a subsidy for help paying your Part D costs if your income is under a certain threshold. The federal government offers a program for those whose annual income falls below 150% of the Federal Poverty level based on your household size. This works on a sliding scale and you will have to apply for the benefit each year. Additionally many states have programs. To find out if you qualify, you should visit your state website for guidelines and applications.
Should I apply for Medicare Part D?
Although your enrollment to Medicare Part D is voluntary, it is recommended that you apply for a Part D plan when you enroll in Medicare Part B. If you fail to enroll when you first become eligible, you will likely pay a late enrollment penalty if you decide to enroll later on. This penalty will stay with you for the entire time you are on Medicare.
If you have credible drug coverage from another place, like VA drug coverage, or an employer drug plan, you may not need to enroll in a private Part D drug plan. You should check to make sure that the plan you are in is considered “credible” under the guidelines of Medicare Part D plans.
How do I apply for Medicare Part D?
Private insurance companies offer Part D drug coverage and plans are offered based on where you live.
You can enroll in a plan directly with the insurance company or with an agent that specializes in Medicare.
You can additionally enroll through the medicare.gov website.
Navigating through the different drug plans can be a bit tricky and we recommend using a licensed agent so you can have someone help you each year review the plans to determine the right plan for you.
When do I sign up for Medicare Part D?
Signing up for a Medicare Part D drug plan can only be done during specific times. In other words, you can’t just sign up for a plan at anytime.
Most people sign up for a Part D drug plan when they turn 65. This is known as your Initial Enrollment Period (IEP).
What is a Medicare Part D Special Enrollment Period (SEP)?
If your eligible for Medicare, but you’re covered through yours or your spouses employer’s group health plan, you may be able to delay your enrollment in Medicare Part B.
Keep in mind, when your employer-based coverage ends, you may be eligible for a Special Enrollment Period (SEP) to enroll in Medicare Part B without incurring a late-enrollment penalty.
How to choose a Medicare Part D plan?
For more information on Medicare Part D, contact us today.
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