Medicare Part D Prescription Drug PlansCovering your prescription drug costs
Medicare Beneficiaries are not automatically enrolled in prescription drug coverage. In fact, Medicare Part D Prescription Drug Plan coverage is optional but can be valuable if you take medications. If you do not sign up for Medicare Part D Prescription Drug Coverage when first eligible, you might have to pay a late-enrollment penalty if you decide to enroll later.
Many people are automatically enrolled in Original Medicare, Part A and Part B, when they turn 65 years of age. However, you may not realize that Original Medicare does not cover most of your medications (except those you may receive as a hospital inpatient or in some instances, outpatient). Original Medicare Part B covers certain prescription drugs that you get in an outpatient setting, like a doctor’s office. However, these tend to be the kind of medications that you need a doctor to give you, like infusion drugs.
You can receive prescription drug coverage in two different ways, depending on whether you are enrolled in Original Medicare or a Medicare Advantage Insurance Plan. A Medicare Advantage Insurance Plan, also known as Medicare Part C, is an alternative way to get Original Medicare benefits through a Medicare health plan, and many plans may also cover benefits beyond the federal program, including prescription drug benefits.
Medicare Part D Prescription Drug Plan coverage is available via:
Stand-alone Medicare Part D Prescription Drug Plan—you can add this benefit to your Original Medicare coverage and enroll in any prescription drug plan available in your area.
Medicare Advantage Prescription Drug plan—you can get a Medicare Advantage (Part C) plan that includes prescription drug coverage so that you get all your Medicare benefits under one plan. Those types of Medicare Advantage Insurance Plans are referred to as “MAPDs.”
When am I eligible for Medicare Part D?
You’re eligible for Medicare Part D prescription drug plan coverage if you have Original Medicare Part A and/or Part B. Additionally, if you decide to get your prescription drug coverage through a Medicare Advantage Insurance plan, you must have both Part A and Part B, and (in most cases) cannot have end-stage renal disease (ESRD). Not all Medicare Advantage Insurance Plans cover prescription drugs; it is important to review your current health plan with your licensed insurance agent.
Just because you do not enroll in a Medicare Part D Prescription Drug Plan, that decision will not affect the Original Medicare coverage you have, but if you are currently taking medications, it may be beneficial for you to enroll in a stand-alone Medicare Part D Prescription Drug Plan to get help with your prescription costs. You can also elect to enroll in a Medicare Advantage Prescription Drug plan (Medicare Part C), which includes your Medicare Part D benefits. If you do not sign up for Medicare Part D, you may have to pay for your medications out of pocket unless you have other insurance.
Additionally, it is a good idea to sign up for Medicare Part D as soon as you are eligible. If you choose to enroll later or go 63 consecutive days or more without Medicare Part D prescription drug coverage, you may be faced with a late-enrollment penalty, unless you can show that you had creditable prescription drug coverage during the time you were not enrolled in Part D.
Creditable prescription drug coverage is coverage that pays at least as much as Medicare’s standard Part D prescription drug coverage. For example, health coverage you may get through your employer may be considered creditable prescription drug coverage. Your insurance should let you know every year whether your coverage is creditable; if you are not sure, you should contact your insurance company to check. You can also give your Medicare Pathways agent a call to review your benefits.
Your Initial Enrollment Period (IEP) for Part D, which typically takes place during the same seven-month period, is when you first become eligible to enroll. This is the seven-months that starts three months before you turn 65, includes your birthday month and ends three months later.
A good time to sign up for Medicare prescription drug coverage is usually as soon as you are enrolled in Original Medicare Part A and Part B.
You can also sign up for Medicare Part D coverage during the Annual Election Period (AEP), sometimes called the Fall Open Enrollment or Open Enrollment Period for Medicare Advantage Insurance Plans and Medicare Part D prescription drug coverage. AEP takes place from October 15 to December 7 each year.
During the Annual Election Period (AEP) you can:
- Enroll in a Medicare Part D Prescription Drug Plan or change from one Prescription Drug Plan to another.
- Disenroll from your Medicare Prescription Drug Plan (if you are already enrolled in one).
- Enroll in or switch Medicare Advantage Prescription Drug plans.
- Disenroll from your Medicare Advantage plan and return to Original Medicare.
After the Annual Election Period is over, you will have one more chance to make changes to your Medicare Part D Prescription Drug coverage. If you are enrolled in a Medicare Advantage Insurance plan, you can use the Medicare Advantage Disenrollment Period (January 1 to February 14) to disenroll from your Medicare Advantage Insurance plan and return to Original Medicare. Dependent on whether your Medicare Advantage plan included prescription drug coverage, you can also use this same period to enroll in a stand-alone Medicare Prescription Drug Plan.
These are the only changes you can make during this time frame.
In general, you can only enroll in a Medicare Prescription Drug Plan or make changes to your Part D coverage during one of these periods. However, some unique situations may occur, and you will qualify for a Special Election Period (SEP). A Special Election Period (SEP) is when you can enroll in a Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan outside of the Annual Election Period.
Some examples of situations that may qualify you for a Special Election Period include, but aren’t limited to, moving outside of your plan’s service area or qualifying for Medicaid. An SEP can take place any time of the year that you have a qualifying situation. If you are not sure whether you have a case that applies, feel free to contact your Medicare advocate for further assistance.
What’s the Medicare Part D coverage gap (“donut hole”), and how can I avoid it?
The coverage gap (or “donut hole”) refers to the point when you and your Medicare Part D Prescription Drug Plan or Medicare Advantage Prescription Drug plan have spent a certain total amount on covered prescriptions; this amount is also known as your initial coverage limit.
Once you have reached your initial coverage limit, you are in what’s called the coverage gap, also known as the “donut hole.”
During this phase of your Part D benefits, you pay a higher portion of your prescription drug costs. After you have spent a certain amount, you will reach the catastrophic coverage phase. While in the catastrophic phase you will pay only a small copayment or coinsurance for your covered medications for the rest of the year. There are some things you can do to help reduce your prescription drug costs.
- Switch to lower-cost medications. Talk to your doctor about using generic and/or over-the-counter prescription drugs. Many generic drugs work as well as costly brand-name medicines, and this could save you money each year and keep you out of the coverage gap.
- Ask your plan about prescription mail-order programs. They can save you money on medications that you take over a longer period (for example, a 30-day or 90-day supply).
- If your Medicare plan requires you to use network pharmacies, make sure you fill your prescriptions at pharmacies in your plan’s network or the plan may not cover you. Also, some plans may have lower cost sharing if you use not just in-network pharmacies, but preferred pharmacies in the plan’s network, so check with your plan whether getting your prescriptions filled at certain pharmacies may provide additional discounts.
- Always use your Medicare plan membership card when you get your medications. When using your card, you may be able to get discounted rates on the prescription drugs you buy, and any money spent on covered medications automatically counts toward your plan’s deductible (if it has one).
- Look for programs that offer assistance. The National Patient Advocate Foundation or the National Organization for Rare Disorders may have programs willing to help with your prescription drug costs. Comprehensive information about federal, state, and private assistance programs in your area is available from the National Council on Aging.
- Apply for the Extra Help (Low-Income Subsidy) program if you have limited income. Extra Help assists low-income beneficiaries with their prescription drug costs, and, if you are eligible, you will not enter the coverage gap. You can learn more and find out if you qualify by contacting the Medicaid program in your state.
What does a Medicare Part D Prescription Drug Plan cost?
Your actual costs for Medicare Part D prescription drug coverage vary depending on the following:
- The medicines you take, and how often
- The stand-alone Medicare Part D Prescription Drug Plan or Medicare Advantage Prescription Drug plan you choose
- Whether you go to a pharmacy in your plan’s network
- Whether your prescription drugs are on your Medicare Part D plan’s formulary (list of covered drugs)*
- Whether you get Extra Help paying your Medicare Part D costs (see below for more details)
*Remember that formularies may change at any time. You will be notified by your Medicare plan if necessary.
Costs to Consider
One of the costs you should consider is your monthly premium. Most stand-alone Medicare Part D Prescription Drug Plans and Medicare Advantage Prescription Drug plans charge a monthly premium that varies by plan, so you will be responsible for paying that premium.
Please note that if you are enrolled in a Medicare Prescription Drug Plan and are also enrolled in Medicare Part B, you must also continuing paying your Medicare Part B premium. Moreover, if you are enrolled in a Medicare Advantage plan (with or without prescription drug coverage), you must continue paying your Part B premium, along with any premium for your Medicare Advantage coverage.
In addition to your monthly premium, the costs for your Medicare Part D coverage may include:
An annual deductible: This is the amount you pay for your prescriptions before your Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan starts to share in the costs. Deductibles vary by plan, and it may be possible to find one with a $0 deductible amount.
A copayment/coinsurance: This is the amount you pay out of pocket each time you buy a prescription; it is your share of the cost after Medicare has paid its part and you have reached your plan’s deductible (if any). A copayment is a flat amount (e.g., you may pay a $10 copayment when filling a prescription), while a coinsurance is a percentage owed (e.g., you might pay a 10% coinsurance for generic medications). These costs can vary from plan to plan, depending on drug tiers, and which stage of the benefit you are in at the time that you fill the prescription. Medicare Prescription Drug Plans and Medicare Advantage plans with prescription drug coverage place covered medications into different cost tiers, and the prescription drugs in higher tiers tend to cost more than those in lower tiers.
Can I get help with my Medicare Prescription Drug Plan costs if my income is low?
Medicare offers a program called the Low-Income Subsidy, or Extra Help, for eligible beneficiaries with limited incomes. If you are enrolled in Original Medicare and meet the income and resource requirements for the program, you may automatically qualify for the Low-Income Subsidy. If you do not automatically qualify for the Low-Income Subsidy, you may still apply to find out if you are eligible for Extra Help from Medicare. If you do qualify, you will get help paying for your Medicare Part D costs, including premiums, deductibles, and cost sharing.
You may be automatically eligible for Extra Help if you are in one of the following circumstances:
• You are entitled to Medicare and get full coverage from a state Medicaid program.
• You are enrolled in a Medicare Savings Program.
• You get Supplemental Security Income (SSI) benefits.
If you automatically qualify for Extra Help but don’t enroll in a Medicare Prescription Drug Plan yourself, Medicare will enroll you in a plan so that you will get help paying for your prescription drugs. (Medicare will send you a letter telling you when your coverage begins.) If you want to change Medicare Prescription Drug Plans, you can do so at any time with a Special Election Period.
For more information about the Extra Help program, contact your local Social Security office, or call 1-800-MEDICARE (1-800-633-4228). TTY users should call 1-877-486-2048. You can talk to a customer service representative 24 hours a day, seven days a week.
If you would like to schedule an over-the-phone appointment at your convenience or ask additional questions regarding Medicare Part D Prescription Drug Plans, you can give us a call at 866-466-9118.
Review Your Medicare Health Plan
Are you unsure if you are currently enrolled in a plan providing coverage for your prescription drugs? Contact your Medicare advocate at Medicare Pathways to learn more and receive a no-cost plan review. Give us a call at 866-466-9118 to speak with a licensed sales agent today.
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