What is Medicare Part D?
Medicare Part D is a federal prescription drug plan administered through private insurance companies. Medicare beneficiaries can enroll in a standalone Part D drug plan that either supplements their Original Medicare or they can choose a Medicare Advantage plan that also features prescription drug coverage.
A Part D plan is insurance for necessary prescription medication. You pay a monthly premium to an insurance company for your Part D plan. There is a copay or percentage cost to you, but the insurance company will pay for part of your prescription medication.
You will receive a separate Part D insurance card that is separate from your other Medicare-related cards.
There are specific times where
you can enroll in Part C
Medicare Part D Eligibility
If you are enrolled in Medicare Part A or Part B, you are eligible to enroll in Medicare Part D.
How Does Medicare Part D Work?
Here is important information you need to know about owning a prescription drug plan:
- Annual Deductible — There is a deductible you must pay for a Part D plan. Your deductible may be different, or waived entirely. You will pay a discounted price for your medications until you have satisfied the deductible. After that, you begin initial coverage.
- Initial Coverage — During initial coverage, you pay a co-pay for your medications based on your plan’s formulary. Each prescription drug plan separates its medications into tiers. Each tier has a co-pay amount for which you are responsible. It is typically separated by generic drugs, preferred name brands, even more specialized medications, and etc. After you and the insurance company together have paid this amount, then you enter the coverage gap.
- The Coverage Gap – During the coverage gap, you will still generally have significant discounts for generic medications. Typically, you will pay 25% for name brand medications and 25% for generics. Your gap spending will continue until you have paid up the limit.
- Catastrophic Coverage – If you should spend past the coverage gap, your plan will begin to pay 95% of the costs of your formulary medications for the rest of the year. You will pay the greater of 5% of the drug cost or the maximum prescription co-pay amount, which is determined by the federal government each year.