Understanding how the different parts of Medicare work together is essential to maximizing your benefits. Medicare Part D allows you to add prescription drug coverage to your Original Medicare benefits.
Brief Overview Of Medicare
There are four separate parts of Medicare. All of which are voluntary.
- Part A – Hospital insurance and inpatient medical care
- Part B – Doctors’ insurance and outpatient medical care
- Part C – Medicare Advantage private health insurance policies
- Part D – Prescription drug coverage
What Is Medicare Part D?
Medicare Part D is a voluntary prescription drug benefit for people with Medicare, provided through private plans approved by the federal government.
Beneficiaries can choose between a stand-alone prescription drug plan to supplement Original Medicare or a Medicare Advantage Plan that covers all Medicare benefits, including prescription drugs.
Most Medicare Beneficiaries Own a Prescription Drug Policy
Did you know that nearly 9 out of 10 seniors (89%) take daily prescription drugs? It’s true. Yet, Original Medicare does not include prescription drug coverage.
No one wants to face the rising cost of prescription drugs without insurance protection, which is why 46 million of the roughly 60 million people covered by Medicare choose to enroll in Medicare Part D.
Are All Drugs Covered with Medicare Part D?
Each year, the private insurance companies who sell Medicare Part D must submit a formulary list of covered prescription drugs for each plan offered for the upcoming year. This allows beneficiaries to review which drugs are covered in each plan before enrolling.
Medicare mandates that the insurance providers who sell Part D plans include at least two drug options for every prescription drug category but can choose which drugs to offer. While the formulary might not include your specific drug, similar drugs should be available. If your doctor believes that none of the drugs on your plan’s formulary list will work for your condition, you can submit a request for an exemption.
Medicare Part D Quotes
How Much Does Medicare Part D Cost?
There are several factors that contribute to the cost of Medicare Part D prescription drug plans.
Each plan covers different drugs and has different cost-sharing copays for those drugs. Therefore, the issuing company and the benefits included in the plan determines the monthly premium cost.
If your income is over $88,000 a year individually or over $176,000 as a household, there will be an added amount to your yearly deductible.
Medicare Part D Cost Sharing
Besides your monthly premium, you pay your share of the policy costs through an annual deductible and copays for each filled prescription.
The standard deductible for Medicare Part D in 2021 is $445. Individuals who make over $88,000 a year will pay an adjusted rate. You will pay this deductible before your policy benefits ‘kick in’. The deductible is equivalent to paying $37 a month.
Most plans separate drugs into different tiers. Tier one being preferred generic drugs, Tier two being non-preferred generic, Tier three would be preferred branded, and so on. The insurance company sets a copayment amount for each tier of drugs. Many plans have tier one copayments of $5 or less. However, the final cost depends on the policy you choose, which is why it’s essential to check the formulary list before enrollment.
All Medicare beneficiaries are eligible for Medicare prescription drug coverage through Part D.
Medicare provides health insurance to all U.S. citizens age 65 or older.
When To Enroll
You can enroll in Medicare Part D during any of the three Medicare enrollment periods.
Your initial Medicare Enrollment Period is a seven-month window beginning three months before your 65th birthday, includes your birthday month, and continues for the following three months. There is no penalty if you do not sign up for Medicare Part D during your initial enrollment period.
Medicare General Enrollment takes place every year between January 1st and March 31st. And Medicare Open Enrollment occurs every year from October 15th to December 7th.
Find Your Best Policy
As mentioned above, it’s important to compare policies before enrollment. Not only does this allow you to ensure that your prescriptions are covered on the formulary list, but it also allows you to shop and compare premiums overall policy cost.
Savvy shoppers will choose to work with an independent agency to help them navigate their many policy options. Our team of independent agents is here to help you do just that.