Drug coverage (Part D)

Medicare Part D provides prescription drug coverage to help Medicare beneficiaries manage the cost of medications. Here's a detailed overview of how Medicare Part D works, including enrollment, coverage, costs, and additional assistance programs:

What is Medicare Part D?

Medicare Part D is an optional prescription drug coverage plan available to anyone who is eligible for Medicare. It is offered by private insurance companies approved by Medicare and can be added to Original Medicare (Part A and Part B) or included as part of a Medicare Advantage Plan (Part C) that offers prescription drug coverage.

Enrollment

1. Initial Enrollment Period (IEP):

   • When you first become eligible for Medicare, you can enroll in a Part D plan during your IEP, which starts three months before the month you turn 65 and ends three months after the month you turn 65.
   • If you qualify for Medicare due to a disability, your IEP begins three months before and ends three months after your 25th month of receiving Social Security Disability Insurance (SSDI).

2. Annual Enrollment Period (AEP):

   • From October 15 to December 7 each year, you can join, switch, or drop a Part D plan. Coverage begins on January 1 of the following year.

3. Special Enrollment Periods (SEP):

   • You may qualify for a SEP to change your Part D coverage if you experience certain life events, such as moving out of your plan’s service area, losing other creditable drug coverage, or entering a long-term care facility.

Coverage

1. Formulary:

   • Each Part D plan has a formulary, which is a list of covered drugs. Formularies are categorized into tiers that determine the cost-sharing amount. Lower tiers usually include generic drugs and have lower copayments, while higher tiers include brand-name and specialty drugs with higher copayments or coinsurance.

2. Coverage Phases:

   • Deductible: You pay the full cost of your drugs until you meet the plan’s annual deductible. Some plans have a $0 deductible.
   • Initial Coverage: After meeting the deductible, you pay a copayment or coinsurance, and your plan pays the rest until your total drug costs reach the initial coverage limit.
   • Coverage Gap (Donut Hole): After reaching the initial coverage limit, you enter the coverage gap and pay a higher percentage of drug costs. The gap closes gradually due to discounts on brand-name and generic drugs.
   • Catastrophic Coverage: After spending a certain out-of-pocket amount, you exit the coverage gap and enter catastrophic coverage, where you pay significantly lower copayments or coinsurance for the rest of the year.

Costs

1. Monthly Premium:

   • You pay a monthly premium for Part D coverage, which varies by plan. Higher-income beneficiaries may pay an additional amount, known as the income-related monthly adjustment amount (IRMAA).

2. Deductible:

   • Some plans have an annual deductible that you must pay before the plan starts covering your medications. Deductibles vary by plan and can be as high as the Medicare-set limit.

3. Copayments and Coinsurance:

   • During the initial coverage phase, you pay a copayment (a set amount) or coinsurance (a percentage of the cost) for each prescription.

Additional Assistance

1. Extra Help (Low-Income Subsidy):

   • Medicare offers the Extra Help program to assist low-income beneficiaries with Part D costs. It covers premiums, deductibles, and copayments. Eligibility is based on income and resources.

2. State Pharmaceutical Assistance Programs (SPAPs):

   • Some states have programs that help residents with Part D costs. Each program has its own rules and eligibility requirements.

How to Choose a Part D Plan

1. Compare Plans:

   • Use the Medicare Plan Finder tool to compare Part D plans based on coverage, costs, and convenience.

2. Consider Formulary and Pharmacy Network:

   • Ensure the plan covers your medications and includes pharmacies you prefer to use.

3. Review Costs:

   • Consider premiums, deductibles, and cost-sharing amounts when comparing plans.

Resources

• Medicare.gov: For comprehensive information and tools to compare Part D plans.
• State Health Insurance Assistance Programs (SHIP): For free, personalized help with choosing and enrolling in a Part D plan.
• Social Security Administration (SSA): For information and applications for Extra Help.

By understanding Medicare Part D, you can select a plan that best meets your prescription drug needs and manage your medication costs effectively.