Part D – Drug CoverageTwo Ways to get Drug Coverage
Medicare offers prescription drug coverage to everyone with Medicare. If you are entitled to Part A, and/or enrolled in Part B, you can get a stand-alone Part D plan (see www.Medicare.gov Part D). If you decide not to join a Medicare Prescription Drug Plan when you’re first eligible, and you don’t have other creditable prescription drug coverage, or you don’t get Extra Help, you’ll likely pay a late enrollment penalty. To get Medicare drug coverage, you must join a plan run by a private insurance company approved by Medicare. Each plan can vary in cost and drugs covered. Part D also has an income related adjustment which is higher for singles making more than the current year income threshold.
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Medicare Prescription Drug Plan (Part D): These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage: You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must be entitled to Part A and enrolled in Part B to join a Medicare Advantage Plan.
What Drug Plans Cover
Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary). Medicare Part D plans must include at least two drugs in each therapeutic category, but do not include all drugs. Medicare drug plans place drugs into different “tiers” on their formularies. Drugs in each tier have a different cost. Part D plans also have a monthly premium, co-payment, and some have an upfront deductible. Most are subject to the donut hole.
A drug in a lower tier will generally cost you less than a drug in a higher tier. In some cases, if your drug is on a higher tier and your prescriber thinks you need that drug instead of a similar drug on a lower tier, you or your prescriber can ask your plan for an exception to get a lower copayment.
How does Part D work?
Some Part D plans have an upfront deductible. Once that has been met, the initial coverage phase begins. While in this phase, the member pays co-payments or co-insurances for the various tiers. Once the initial coverage limit has been met, the member falls into the donut hole and their Part D coverage ends. While in the donut hole, the member pays a prescribed percentage for generics and brand name drugs until the catastrophic coverage threshold is met. Once that is met, the member pays small co-payments or co-insurances for generic and brand name drugs for the remainder of the calendar year. Individuals identified as “dual eligible” (Medicare/Medicaid beneficiaries) by CMS are not subject to the donut hole, as their prescription coverage is fully subsidized. The donut hole will be phased out by the year 2020.