Medicare Part D is a prescription drug plan. Aside from certain Medicare Advantage plans, Medicare’s prescription drug coverage requires a separate purchase. This plan can be yours when you have no other options. And with a Medicare Part D plan, you can save more on your current prescriptions, as Part D works to find you the lowest costs when you go to your pharmacy.
How does it work?
Medicare Part D covers medications within a formulary (your plan’s list of covered medications). Not all formularies are alike, but there are certain types of medications that all Medicare Part D plans must cover – these are protected classes. Protected classes include medications used for conditions such as HIV/AIDS and cancer. All Part D plans must have at least two medications in each commonly prescribed drug class.
When you sign up, it’s good to have your list of medications ready so that you can join a plan that covers most (if not all) of your prescriptions.
Your plan will work to find you the lowest cost for your medication. If you are prescribed a brand name medication, your plan will get you the generic version if possible. If your medication isn’t in the formulary, your plan will work with your doctor to see if you can get a similar medication that is in the formulary.
Can I add it to my health insurance?
Yes, you can within certain parameters. If you are on Original Medicare, you can add drug coverage during the Annual Election Period, beginning October 15 and ending on December 7. Your drug coverage starts on January 1 of the next year.
If you have drug coverage through your employer, it is best to make sure that the coverage you have is considered creditable. Call your benefits administrator first before making this decision. Joining Medicare Part D while having employer coverage can cause a conflict, which may ultimately result in you losing your employer coverage. If it turns out that you do not have creditable drug coverage through your employer, you may be able to sign up for Part D without losing employer health insurance coverage.
What if I already have drug coverage?
If you already have prescription coverage from a different health plan, you will not be penalized for waiting to join Medicare Part D. However, once you do lose your current drug coverage, you have 63 days to join a Medicare drug plan. A late enrollment penalty will apply if you wait to join beyond this point.
What are the costs?
In order for your Part D plan to begin covering your prescriptions, you must first pay the deductible. While deductibles vary between plans, no Medicare Part D plan in 2021 will have one for any higher than $445. Some may not have a deductible at all.
Premiums are also dependent on where you get your policy. The standard cost for this is roughly $33.06 in 2021. This standard amount is also referred to as the national base beneficiary premium.
Coinsurance rates depend on whether a medication is in the plan’s formulary, which tier the medication falls under, and the amount in payments you’ve made during the year. If an item isn’t covered in your plan’s formulary and you are not switched to one that is, you will pay full price for that medication, and it will not count toward your coverage gap (this is the time when your plan sets a temporary limit on what it covers for your drugs, which takes place after you and your plan have spent $4,130 on prescriptions for the year).
Tiers are arranged in order of affordability, with Tier 1 being the cheapest and Tier 4 being the most expensive. These are the tiers and how they are classified:
- Tier 1 – Generic (preferred)
- Tier 2 – Brand name (preferred)
- Tier 3 – Brand name (not preferred)
- Tier 4 – Specialty drugs
Once you and your plan have paid $4,130 for your prescriptions, you enter a coverage gap where your plan and the manufacturer will cover 75% of brand name prescription costs, which will leave you paying no more than 25% of the overall costs. For generic drugs, only your personal out-of-pocket costs count toward this – what your plan covers for generic drugs is not a factor here.
After you have spent $6,550 out-of-pocket for your medications, you exit the coverage gap and enter catastrophic coverage. The amount that catastrophic coverage saves you varies between plans, but it ensures that you continue to have discounted rates for your prescriptions.
Why should I get Part D now?
If you do not have creditable drug coverage and you qualify for Medicare Part D, you have nothing to lose and everything to gain. If you’re within the first two months of losing other drug coverage, you can join without paying a late enrollment fee and get your prescriptions at a greatly discounted price.
Joining as early as possible only works in your favor. Late enrollment fees may only accrue 1% per month you wait to join after you were first eligible, but the longer you wait, the more significant your additional fees will be. This is not only because of the greater percentage, but also the likelihood of rising premiums from one year to the next.
If this opportunity is available to you now, don’t wait. Medicare Part D is affordable and extensive as a prescription drug plan can be. The premiums are low and the savings are high, which is something that can’t be said for just any prescription drug plan.
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Medicare Peace of Mind has been helping people just like you get quality policies at the lowest costs. Our customer reviews and our A+ Better Business Bureau rating reflect this. When you need affordable Medicare drug coverage, we’ve got you covered. We will work with you to find the plan that best suits your needs. Learn more by calling us today at 970-233-0633.
