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Part D Prescription Drug Plans

Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to get Medicare drug coverage when you're first eligible, you'll likely pay a late enrollment penalty unless one of these applies:

It's important to do this on time because there's a permanent premium surcharge for enrolling more than three months after your 65th birthday if you don't have equivalent drug coverage from another source, such as a retiree plan.

To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.                                                                                                                                                                             

You can sign up for Part D Prescription Drug Plans, which helps cover prescription drug costs, along with other components of Medicare starting three months before your 65th birthday.

It's important to do this on time because there's a permanent premium surcharge for enrolling more than three months after your 65th birthday if you don't have equivalent drug coverage from another source, such as a retiree plan.

Let us help you with when to enroll.

If you are already enrolled in a Part D "standalone" plan or a Medicare Advantage plan that incorporates drug coverage, you can switch plans during the open-enrollment period, which runs from Oct. 15 to Dec. 7 every year.

Making Part D work

You'll make these payments throughout the year in a Medicare drug plan:

  • Premium
  • Most Medicare Prescription Drug Plans charge a monthly fee that varies by plan. You pay this in addition to the Medicare Part B premium. If you join a Medicare Advantage Plan (Part C) or Medicare Cost Plan that includes Medicare prescription drug coverage, the plan's monthly premium may include an amount for drug coverage
  • Yearly deductible
  • This is the amount you must pay each year for your prescriptions before your Medicare drug plan begins to pay its share of your covered drugs.

    Deductibles vary between Medicare drug plans. No Medicare drug plan may have a deductible more than $400 in 2017 ($405 in 2018). Some Medicare drug plans don't have a deductible.

  • Copayments or coinsurance -With a co-payment, you pay a set amount (like, $10) for all drugs on a tier. For example, you may pay a lower co-payment for generic drugs than brand-name drugs. Coinsurance means you pay a percentage of the cost (like, 25%) of the drug.
  • Costs in the coverage gap -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. In 2018, once you and your plan have spent $3,750 on covered drugs, you're in the coverage gap.This amount may change each year. Most Medicare drug plans have a coverage gap (also called the“donut hole”).  In 2018, once you enter the coverage gap, you pay 35% of the plan’s cost for covered
    brand-name drugs and 44% of the plan’s cost for covered generic drugs until you reach the end of the coverage gap. These costs (sometimes called true out-of-pocket,or “TrOOP,” costs) all count toward you getting out of the coverage gap: Not everyone will enter the coverage gap because their drug costs won’t be high enough.
  • Costs if you get Extra Help -People with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
  • Costs if you pay a late enrollment penalty -Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($35.63 in 2017; $35.02 in 2018) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
  • Your actual drug plan costs will vary depending on:
  • The drugs you use
  • The plan you choose
  • Whether you go to a pharmacy in your plan's network
  • Whether the drugs you use are on your plan's formulary  
  • Whether you get Extra Help paying your Medicare Part D costs

Look for specific Medicare drug plan costs, and then call the plans you're interested in to get more details.

If you have limited income and resources, your state may help you pay for Part A and/or Part B. You may also qualify for Extra Help to pay for your Medicare prescription drug coverage.

 

 

 

 

 

 

Once you reach the coverage gap in 2015, you'll pay 45% of the plan's cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your planshas set with the pharmacy for that specific drug.

Although you'll only pay 45% of the price for the brand-name drug in 2015, 97.5% of the price will count as out-of-pocket costs which will help you get out of the coverage gap.

In 2015, you'll pay 65% of the price for generic drugs during the coverage gap.What you pay for generic drugs during the coverage gap will decrease each year until it reaches 25% in 2020. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.

Once you've spent $4,700 out-of-pocket in 2015, you're out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

Choosing a plan

It pays to review your Part D coverage every year, especially if you have started taking new drugs.

  • Start at Medicare.gov. You can find the basics about the benefit and Part D plans at Medicare's website. There's a link to the Medicare Part D Plan Finder, which allows you to compare offerings and coverage options in your area and includes a helpful formulary finder that allows you to compare plans based on their coverage of your personalized list of drugs. It will even show you your monthly out-of-pocket drug cost for the year.
  • Learn more. We recommend consulting the website of the nonprofit Medicare Rights Center. There you can find in-depth information on Medicare Part D.

Getting financial help

Individuals with annual incomes of less than $17,235 and financial resources of less than $13,300, or married couples with incomes of less than $23,265 and resources of less than $26,580, might qualify for Extra Help from Medicare to pay their Part D premiums and out-of-pocket drug costs.


Download Medicare's instructions on applying for the Extra Help program.

Additionally, read about the six ways to lower your drug costs on Medicare.gov.