Drug Coverage (Part D)

How does Medicare prescription drug coverage (Part D) work

Medicare prescription drug coverage is an optional standalone benefit to go with your Traditional Medicare A&B card.

Medicare provides drug coverage to everyone with Medicare through what is referred to as Part D.

Even if you don’t take prescriptions now, you should consider joining a Medicare drug plan.

If you decide not to join a Medicare drug plan when you’re first eligible, and you don’t have other creditable prescription drug coverage or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later.

Generally, you’ll pay this penalty for as long as you have Medicare prescription drug coverage.

How do I get prescription drug coverage (Part D)?

We are committed to providing expert support to Medicare Beneficiaries by simplifying the Medicare process from start to finish, and that includes helping our clients with Part D. You will speak with one of our friendly support members in our Client Experience Group who are certified to go over the Part D coverage with you. They will help find the right coverage for you and assist you with enrolling right over the phone.  

There are 2 ways to get Medicare prescription drug coverage:

  1. Medicare Prescription Drug Plans. These plans (sometimes called “PDPs”) add drug coverage to Original Medicare A&B. You must have Part A and/or Part B to join a Medicare Prescription Drug Plan.
  2. Medicare Advantage Plans (like HMOs or PPOs).

    These plans are alternative plans to Original Medicare and will now receive healthcare coverage from a private insurance company and no longer from Medicare.

    You get all your Part A, Part B, and prescription drug coverage (Part D), through these all-in-one plans.

    Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.”

    Remember, you must have Part A and Part B to join a Medicare Advantage Plan, and not all these plans offer drug coverage.

When can I join, switch, or drop a Medicare drug plan?

  • When you first become eligible for Medicare, you can join during your Initial Enrollment Period.
  • If you get Part B for the first time during the General Enrollment Period, you can also join a Medicare drug plan from April 1–June 30. Your coverage will start on July 1.
  • You can join, switch, or drop between October 15–December 7 each year. Your changes will take effect on January 1 of the following year, if the plan gets your request before December 7.
  • If you’re enrolled in a Medicare Advantage Plan, you can join, switch, or drop a plan during the Medicare Advantage Open Enrollment Period, between January 1–March 31 each year.
  • If you qualify for a Special Enrollment Period.

Special Enrollment Periods

Special Enrollment Periods are times when you can join, switch, or drop your Medicare drug coverage if you meet certain requirements. Generally, you must stay enrolled in your Medicare drug plan for the entire year, but you can change your coverage mid-year if you qualify for a Special Enrollment Period. Some examples:

• Move out of a Medicare Advantage plan’s service area.

• Lose other creditable prescription drug coverage.

• Live in an institution (like a nursing home).

• Have (or lose) Medicaid.

• Qualify for (or lose) Extra Help.

How much do I pay?

Typically, we see the monthly premium for Part D to be very reasonable anywhere from $10-$25. The average 2019 Part D base beneficiary premium is $33.19. Your actual drug prescription costs will vary depending on:

• Your prescriptions and whether they’re on your plan’s formulary (list of covered drugs) and depending on what “tier” the drug is in.

• Which phase of your drug benefit that you’re in (some examples include whether you met your deductible, if you’re in the coverage gap, etc.)

• The plan you choose. Remember, plan costs can change each year.

• Which pharmacy you use (whether it offers preferred or standard cost sharing, is out-of-network, or is mail order). Your out-of-pocket prescription 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 Part D costs.

Yearly deductible

This is the amount you must pay before your drug plan begins to pay its share of your covered drugs.

Most individuals don’t have to worry about the deductible if they are taking generic medications and use a preferred pharmacy or mail order with the plan.

Some drug plans don’t have a deductible.

Copayments or coinsurance

These are the preset amounts you pay for your covered prescriptions after the deductible (if the plan has one).

You pay your share and your drug plan pays its share for covered drugs.

If you pay coinsurance, these amounts may vary throughout the year due to changes in the drug’s total cost.

Coverage gap

Most Medicare drug plans have a coverage gap (also called the “donut hole”).

The coverage gap begins after you and your drug plan together have spent a certain amount for covered drugs.

In 2019, once you enter the coverage gap, you pay 25% of the plan’s cost for covered brand-name drugs and 37% of the plan’s cost for covered generic drugs until you reach the end of the coverage gap.

Not everyone will enter the coverage gap because their drug costs won’t be high enough.

Catastrophic coverage

Once you’ve met the out-of-pocket cost requirements of the coverage gap (“donut hole), you automatically get “catastrophic coverage.”

With catastrophic coverage, you only pay a reduced coinsurance amount or copayment for covered drugs for the rest of the year.