How Medicare Part D Works

How Medicare Part D Works

Anyone who has faced an illness, injury, or chronic condition understands that prescription drugs can be necessary to help you live a healthy and active life. As Medicare beneficiaries, we can be vulnerable to the expenses of medications, and unexpected needs can take a toll on the most carefully planned budget. With retirement looming, many beneficiaries can’t risk facing unforeseen out-of-pocket costs.  Medicare Part D offers optional prescription drug benefits that can help cover these costs and is available to all people with Medicare for an additional charge. Part D plans are offered by private insurance companies that are approved by Medicare.

You can enroll in Part D, also known as a Prescription Drug Plan (PDP), when you enroll in Medicare Part A and/or Part B. If you get your Medicare benefits though Original Medicare, you can consider a stand-alone PDP. If you choose to enroll in a Medicare Advantage (MA) Plan, you can choose one that includes prescription drug coverage, sometimes referred to as an MA-PD. If you do not enroll in a Part D plan during your Initial Enrollment Period, you will likely have to pay a late enrollment penalty when you decide to join later.

You will pay a monthly premium, yearly deductibles, and copayments or coinsurance for this coverage. The costs can vary based on the plan’s formulary, the drugs you use (generic vs. brand name), the pharmacy you visit, and whether you get Extra Help paying your Medicare Part D costs. It is important to review the plans available in your area, and compare them based on your own personal needs. For instance, if you currently require a specific medication, you may want to consider a plan that includes that particular drug on its formulary, or list of covered drugs. Each plan can offer drugs at varying levels, or tiers, of cost, as well. A little time comparing plans can save you money later, visit or contact one of our licensed benefit advisors at 888.956.735 to compare plans available in your area.

Thanks to the Affordable Care Act, the coverage gap in drug coverage is going to be eliminated by 2020, but until then, there is a temporary limit on what a drug plan will cover for drugs. In 2015, once you and your plan have spent $2,960, you will enter the coverage gap. At that time, you will pay 45% of the plan’s cost for covered brand name drugs, and 65% for generic drugs.  In 2016, once you and your plan have spent $3,310 on covered drugs, you will enter the coverage gap.

If you meet certain income and resource limits, you may qualify for Extra Help from Medicare to pay the costs of Medicare prescription drug coverage.  In 2015, drug costs for most people who qualify are no more than $2.65 for each generic and $6.60 for each brand name covered drug. In 2016, costs are no more than $2.95 for each generic and $7.40 for each brand-name covered drug. Medicare beneficiaries who receive Extra Help will not enter the coverage gap.

If you are approaching Medicare eligibility, now is the time to consider adding prescription drug coverage to your Medicare benefits. Compare and review prescription drug plans and find the one that will offer you the protection you deserve at