Medicare Part D helps pay for your prescription medications. If you have Medicare Parts A & B, or if you've enrolled in a Medicare Advantage plan that does not include Part D coverage, you can get Part D coverage as a stand-alone prescription drug plan through a private insurance company. However, if you are enrolled in a Medicare Advantage plan that includes Part D coverage, you cannot have a separate, stand-alone Part D plan in this circumstance.
If you want prescription drug coverage, it's important to sign up as soon as you're eligible, or you may have to pay a Medicare-imposed late-enrollment penalty.
Brand-name and generic prescription drugs are covered. The federal government created guidelines for the types of drugs that must be covered, along with setting a minimum standard of benefits. When you enroll in a Part D plan, it does not change the coverage or associated rules for prescription drugs covered under Part B. Part B covers drugs in a variety of situations, particularly when drugs are administered in your doctor's office.
A drug is considered a Part D drug only when it is prescribed for a medical use that is accepted and approved by the Federal Food, Drug and Cosmetic Act. It is also considered a Part D drug if its use is listed or approved to be listed in one of three industry-supported drug reference books.
Each Part D plan has a formulary, or list of drugs, that meets these guidelines, as required by law. However, not all plans are the same. They vary by cost, formulary or specific drugs covered. If you're considering a Part D plan, first review the plan's formulary to make sure it will meet your prescription drug coverage needs.
Plans vary according to the prescription drugs they cover. Drugs that are excluded by Medicare from Part D coverage are:
Part D plans have different levels of cost sharing that apply throughout the plan year, known as the four stages of coverage. This means you pay different cost-sharing amounts for your prescription drugs in each stage. However, when you enter the third stage, called the "coverage gap," (also commonly known as the "doughnut hole") you may be responsible for paying all of the costs.
Each Part D plan establishes a network - or pharmacies plan members may use. Some plans may limit your pharmacy network by state, while others offer nationwide coverage. If you travel often, you may want a plan that allows you to access pharmacies wherever you go. Some plans offer mail order pharmacy services.
You need to fill your prescriptions at a network pharmacy to get the plan's discounted drug rate. Some exceptions are allowed, but these are limited to circumstances such as traveling within the United States and running out of your medication or becoming ill and unable to get to a network pharmacy. You may not get the same level of discounts as you would through a network pharmacy.
Insurance companies that offer Part D plans and Medicare Advantage plans with prescription drug coverage set their own premium prices. These prices are reviewed and approved by the Centers for Medicare and Medicaid Services. Monthly premiums vary widely, even for similar coverage. Part D plans also have cost-sharing expenses, like deductibles, copays and coinsurance.
Premium costs are one of the reasons it's important to sign up for a Part D plan when you first become eligible. If you wait to sign up, you may have to pay a penalty, set by Medicare, on your premium. For each month you delay enrollment, you may pay an additional one percent of the national average premium per month. You continue to pay this penalty for as long as you're enrolled in a Part D plan.
To keep your drug costs low, always fill prescriptions at a network pharmacy and show your prescription drug ID card every time to ensure that the money you spend on your prescription drugs is correctly tracked. If you use brand-name drugs, ask your doctor if there are lower-cost drugs you could take instead. Costs saving measures like this may help you delay or avoid the coverage gap.
If you're entitled to Medicare Part A, or enrolled in Medicare Part B, you can enroll in a Part D plan as soon as you become eligible for Medicare, during your initial enrollment period. You cannot be refused coverage if you meet the requirements. Each private insurance company that offers a Part D plan handles the enrollment process for its plans. You need to contact the company directly and ask how to enroll.
It's a good idea to think about how many medications you take and to estimate your drug costs before choosing a plan. This may help you find a Part D plan that best fits your prescription drug needs. AARP provides a tool to help estimate costs and figure out when you might hit the coverage gap, based on the drugs you take.
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