What is Medicare Part D?
Medicare Part D (sometimes known as PDP or Prescription Drug Plan) is the prescription drug benefit offered through private insurance companies. Simply put Medicare Part D covers your medications. This can be obtained by either be a stand-alone option (with a Private Insurance Carrier) with your original Medicare or added to your Medicare Supplement Plan/Medigap (with a Private Insurance Carrier) or beneficiaries also have the option to choose a Medicare Advantage plan that includes prescription drug coverage (with a Private Insurance Carrier).
Notice your Traditional Medicare Card only includes Part A + Part B. It does NOT include Part D. You will need to pick this up with a Private Insurance Carrier in order to stay compliant with the federal law and avoid a late enrollment penalty.
What does Medicare Part D cover?
A Medicare Part D plan covers your Medications.
Each plan that offers prescription drug coverage through Medicare Part D must give at least a standard level of coverage set by Medicare. Plans can vary the list of prescription drugs they cover (called a formulary) and how they place drugs into different “tiers” on their formularies. Formularies can vary from plan to plan, so be sure to request a copy.
How Much Does it Cost?
Part D cost rates vary depending on where you live. In general, you can find Part D plans starting at $14.00 + per month.
You generally have co-pays associated with Part D depending on what Tier Level your medication is on plus a deductible.
Is there a deductible for Part D?
There may be a deductible for your Part D plan. It varies from plan to plan. This deductible would have to be met first then your co-pays would go into effect.
For example you have a $100 copay and your medication is a tier 3 at $42 per refill. You would pay $142 the first time then $42 thereafter.
What do the tiers on my Part D mean?
Here’s an example of a Medicare drug plan’s tiers (your plan’s tiers may be different):
- Tier 1—lowest copayment : most generic prescription drugs
- Tier 2—lower copayment: preferred generic prescription drugs
- Tier 3—medium copayment: non-preferred, brand-name prescription drugs
- Tier 4 – High copayment; brand name drugs
- Tier 5 – Specialty tier—highest copayment: very high cost prescription drugs
In some cases, if your drug is in a higher (more expensive) tier and your prescriber thinks you need that drug instead of a similar drug on a lower tier, you can file an exception and ask your plan for a lower copayment. Remember, this is only an example—your drug plan’s tiers may be different.
What is a formulary?
Formulary – Most Medicare drug plans (Medicare Prescription Drug Plans and Medicare Advantage Plans with prescription drug coverage) have their own list of what drugs are covered, called a formulary. Plans include both brand-name prescription drugs and generic drug coverage. The formulary includes at least 2 drugs in the most commonly prescribed categories and classes. This helps make sure that people with different medical conditions can get the prescription drugs they need. All Medicare drug plans generally must cover at least 2 drugs per drug category, but plans can choose which drugs covered by Part D they will offer.
The formulary might not include your specific drug. However, in most cases, a similar drug should be available. If you or your prescriber (your doctor or other health care provider who’s legally allowed to write prescriptions) believes none of the drugs on your plan’s formulary will work for your condition, you can ask for an exception.
What is the Coverage Gap/Donut Hole?
Most Medicare drug plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.
Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you and your plan have spent $4,020 on covered drugs in 2020, you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.