Understanding Medicare Part D Coverage
This is coverage for prescription drugs that you get from a retail pharmacy.
With this program, you can access medications at more affordable rates.
Plus, it provides insurance against unfavorable drug costs.
Cost.
This is slightly complicated. The cost of Medicare Part D depends on your income, which plan you choose, and if you qualify for Extra Help.
Medicare Part D costs include a monthly premium and cost-sharing. We explain more below.
Monthly Premiums.
You’ll pay a monthly premium for the insurance itself. The national average in 2020 is around $33/month, but it’ll vary depending on the plan you select. Each carrier sets its own rates and its own formulary (list) of medications that the plan covers.
The cheapest prescription drug plan in your state is not necessarily the best one for you. Check the plan’s formulary to make sure they offer the medications you need. Some folks with higher incomes might have to pay more for their prescription drug plan.
Cost Sharing.
When you pick up your prescriptions at the pharmacy, you’ll pay your share of the expenses. This cost-sharing can include a deductible — which some plans have — then there are copays that you pay for the medicine itself.
Deductible.
In 2020, the Medicare Part D deductible is $435. So, each insurer can charge up to a $435 deductible from you before your benefits come through. The insurer may choose to charge a lower deductible as well.
If a company waives the deductible, you’ll usually see higher premiums and copays.
Copays.
Part D plans typically have 5 tiers for their medications, which are in their formularies. A Tier 1 is commonly a preferred generic medication. Tier 2 is a non-preferred generic. Tier 3 is a preferred brand, and so on. The insurer will determine the copay for each tier. What company X charges for Tier 1 medications may be different from company Y.
Extra Help for Costs.
The federal government awards help for Part D expenses if you have a low-income and limited resources. To see if you qualify, or to apply, contact your local Social Security office.
Am I eligible?
You’re eligible to enroll when you first get Medicare. This Initial Enrollment Period (IEP) lasts for seven months and includes the three months before you turn 65, the month of your birth, and the three months afterwards. A similar period exists for those who first become eligible for Medicare because of a disability.
About Enrollment.
Medicare Part D is voluntary. However, if you don’t have it, you could pay large amounts for medications that you need in the future. If Medicare will be your main coverage, it’s best to enroll in Part D when you become eligible at 65. But, if you’re still working at 65, you can delay enrollment (without penalty) until you retire — just make sure your employer insurance has good drug coverage.
Before you enroll.
You should know:
There are dozens of Part D plans offered in most states.
The choice of a plan will depend on the specific medications you need.
You can only be enrolled in one Part D plan at a time. You can’t be enrolled in both Medicare Advantage and Part D at once.
When to Enroll.
Like Part C, you can only join a prescription drug plan during certain periods of time.
You can enroll in Part D during your initial enrollment period or during the annual fall election period (AEP), which goes from October 15 to December 7. You can enroll or dis-enroll from any drug plan during this time. Some people also choose to change their drug plan if their needs have changed.
Also, there are special election periods (SEPs) for Medicare Part D drug plans, like when you waive employer group coverage or move out of state and drop your plan. If this happens, you’d be given a SEP to enroll in a Part C plan (mid-year) in your new state.
Ready to enroll, or still have questions? Get in touch.
When you decide to enroll in a plan through us, you get back-end support if you encounter any obstacles, like drug exceptions or prior authorization requirements.