Medicare Prescription Drug plans, also known as Part D, are offered by private health insurance companies approved by Medicare. These plans help cover the cost of prescription drugs. Moreover, they may lower your prescription costs and can protect you against higher costs in the future.
First, you must be enrolled in Original Medicare (Part A and Part B) or a Medicare Advantage Plan (Part C). Then, you can enroll in a stand-alone Prescription Drug Plan (PDP) or a Medicare Advantage Plan that includes prescription drug coverage. You can explore and compare plans through the Medicare Plan Finder website or by contacting individual insurance companies.
When you are first eligible for Medicare, you have an Initial Enrollment Period of seven months. This period starts three months before the month you turn 65, includes the month you turn 65, and ends three months after your birth month. During this time, you can enroll in Part D without incurring a penalty.
After the Initial Enrollment Period, you can enroll in or make changes to your Part D coverage during the annual Open Enrollment Period. The Open Enrollment Period runs from October 15th to December 7th each year, with changes taking effect on January 1st of the following year.
Most Part D plans require a monthly premium, which varies depending on the plan’s coverage and features. The premium is usually deducted from your Social Security check.
Some plans have an annual deductible that you must pay before the plan begins covering a significant portion of your drug costs.
Many Part D plans require a fixed copayment for each prescription filled. The copayment amount usually varies depending on the drug’s tier on the plan’s formulary.
Instead of a copayment, some plans may require you to pay a percentage of the drug’s cost, known as coinsurance. Coinsurance typically applies to higher-tier medications.
Most Medicare Part D plans have a coverage gap, commonly known as the “donut hole.” It’s a temporary limit where you are responsible for a larger portion of your drug costs until you reach a certain out-of-pocket spending limit.
Medicare beneficiaries with limited income and resources may qualify for Extra Help, a program that assists with Part D costs. You can apply for Extra Help through the Social Security Administration. It’s also important to review your Part D plan annually during the Open Enrollment Period, as plans and their formularies can change from year to year.
