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Medicare D Coverage Explained

Medicare Part D covers prescription drugs for Medicare beneficiaries. Anyone who has Part A or Part B is entitled to this coverage, which includes brand name and generic drugs. Part D coverage is obtained through private companies. There are specific times during the year that you can enroll in a plan or change from one plan to another. All plans offered are approved by Medicare. They have a monthly premium, but there is help available for those with limited incomes.

  1. Part D Plan Features

    • Medicare Part D plans have several common features. There is the monthly premium. As with most types of insurance, the lower the premium, the higher the co-pays. This is not always true so be sure to examine all your plan options carefully. Each plan has a formulary, or list of covered drugs. The formulary will divide the drugs into tiers, with generics in the lowest tier group and brand names in the highest. The formularies vary from plan to plan. Some plans may also have a deductible.

    Coverage Gap

    • Part D prescription plans have a gap in coverage. This gap, or “donut hole,” begins when you’ve met a certain amount of overall drug costs. This total is set by Medicare and increases each year. Once you’ve met the total out-of-pocket costs set by Medicare, the gap ends, and you begin catastrophic coverage, which provides significantly lower co-pays. Some plans also provide a limited amount of benefits in the coverage gap.

    Who Needs Part D

    • If you currently have prescription coverage through other insurance or the Veteran’s Administration, you do not need to sign up for a Part D plan as your current coverage is as good as or better than Part D. If you don’t have other coverage and take few or no prescriptions, it’s tempting to not get a Part D plan. There is a penalty, however, if you do not get Part D when first eligible. The penalty is 1 percent of the average national monthly premium for each month you delay coverage.

    When You Can Enroll

    • Medicare offers an initial enrollment period when you are first eligible for Medicare. There is also an open enrollment period from November 15 through December 31 of each year. The choice you make, during the end of the year enrollment period, is locked in for the entire following year, so it’s important to make the right choice. Medicare also offers special enrollment periods if your plan is dropped or if you move out of your current plan’s service area.

    Extra Help

    • There is extra help available through Social Security for those with limited incomes. To apply, call, go online or visit your local Social Security office. If your situation is particularly difficult, you may want to apply for Medicaid, which is a state and federal program for those with very limited incomes. For more information on Medicaid, contact your local Department of Aging.

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