Medicare Part D prescription drug plans are offered by private insurance companies as standalone plans or as part of a Medicare Advantage Plan.
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Medicare Part D is prescription drug coverage that’s available to people on Medicare. Unlike Part A and Part B, Medicare Part D is offered by private companies, either as a standalone prescription drug plan (PDP) or as part of a Medicare Advantage Plan with prescription drug coverage (MA-PD). Medicare drug plans cover most outpatient prescriptions.
Medicare Part D prescription drug plans are regulated by Medicare and must cover:
Some Medicare Part D prescription drug plans participate in the senior savings model that offers savings on insulin. You could pay no more than $35 for a month’s supply.
Medicare drug plans offered by private companies help pay for your prescription drugs after you meet your annual deductible, if there is one. You are billed a monthly premium for a standalone PDP, and you may have to pay a premium for a MA-PD.
Part D plans have drug lists called formularies, which are typically divided into “tiers” based on the cost of the drug. For instance, generic drugs may be in “tier one” with a zero or low copay. Higher tiers include brand name and speciality drugs and come with higher costs.
There are phases of prescription drug coverage in every drug plan. After you meet your deductible, you pay copays or coinsurance for your prescription drugs until you reach the “coverage gap.” Once you and your plan spend $4,660 combined on drugs (including deductible) in 2023, you’ll owe no more than 25% of the cost for prescription drugs until your out-of-pocket spending reaches the max out of pocket for your plan. You will then enter the catastrophic coverage phase and only pay a small copay or percentage for your drugs for the rest of the year. Plans must also cover two drugs minimum per category.
If you have creditable prescription drug coverage through other insurance, such as employer-sponsored group insurance, you may want to defer enrollment in a Medicare Part D plan. To avoid late enrollment penalties, check to make sure your current insurance coverage is creditable. Review Medicare’s site or speak with a licensed insurance broker.
There are two ways to get your Medicare.gov drug coverage. Here are the pros and cons of each:
|Advantages of a standalone Part D Plan (PDP)||
|Disadvantages of a standalone Part D Plan (PDP)||
|Advantages of a Medicare Advantage Plan with Part D coverage (MA-PD)||
|Disadvantages of a Medicare Advantage Plan with Part D coverage (MA-PD)||
A PDP might be a good fit if you:
A MA-PD might be a good fit if you:
You should plan to enroll in a Medicare prescription drug plan when you’re eligible, which is either when you turn 65 or when your creditable coverage through an employer ends. If you miss the cutoff, you’ll pay a late enrollment penalty that will continue for the entire time you receive Medicare drug coverage, which may be the rest of your life.
You must be eligible for Medicare and enrolled in Original Medicare Part A and/or B to join a standalone Medicare Part D plan. You can search for an available plan in your area on the Medicare website.
If you choose to get your drug coverage benefit through a Medicare Advantage plan, you must be enrolled in Original Medicare Parts A and B. You can search for a MA-PD plan in your area on the Medicare website.
Expect to pay about $33 per month for your standalone Medicare Part D plan. Expect to pay an average plan cost of $19 for your Medicare Advantage Plan that includes health and drug coverage.
In addition to your monthly premium, you’ll make these payments throughout the year in a Medicare drug plan:
Your actual costs will vary depending on your insurer and these factors:
When you compare costs for plans available in your area, whether they are for standalone Part D plans or Medicare Advantage Plans with drug coverage, you will be able to see premium and deductible costs at a glance. Medicare Part D plans must include coverage for at least two drugs per drug category. Before choosing a plan, check the formulary and tier costs for your drugs. You will be able to get a more accurate cost estimate.
If you create an account on Medicare.gov, you can input your list of medications and save it. Your drug list can be applied to any plan you view, so you won’t have to input it every time.
For more help comparing plan costs, contact your State Health Insurance Assistance Program (SHIP).
For example, compare these standalone Part D plans available in Denver, CO in 2022 (no prescription drugs have been added. Premium costs may increase if you use your plan):
|Plan name||Monthly premium||Annual deductible||Initial Coverage Limit||Annual out-of-pocket threshold amount|
|Wellcare Value Script (PDP)||$5.50||$480 (applies to tiers 3, 4, 5)||$4,430||$7,050|
|SilverScript Smart RX (PDP)||$7.60||$480||$4,430||$7,050|
|Humana Walmart Value Rx Plan (PDP)||$22.70||$480||$4,430||$7,050|
To enroll in a standalone Medicare Part D Plan, you must first be enrolled in Medicare Part A and/or B. You can:
Be ready to provide:
To enroll in a Medicare Advantage Plan with drug coverage, you first must be enrolled in Original Medicare Part A and Part B. After you’re enrolled in Original Medicare, you can enroll in a MA-PD plan during your Initial Enrollment Period or during other enrollment periods throughout the year:
Use the Medicare Plan finder to research available plans in your area. When you’ve chosen a plan, go to the insurer’s website to check for online enrollment options or contact the insurance company by phone or email to request a paper enrollment form. You can also enroll by calling Medicare at 1-800-633-4227.
To enroll, you need your Medicare number and the date your Parts A and B coverage began. Your Medicare card has this information.
LeRon Moore has guided Medicare beneficiaries and their families as a Medicare professional since 2007. First as a Medicare provider enrollment specialist and now a Medicare account executive, Moore works directly with Medicare beneficiaries to ensure they understand Medicare and Medicare Advantage Plans.
Moore holds a bachelor’s degree from Southern New Hampshire University and is A+ Certified with a Medical Records Clerk Certification and Medical Terminology Certification from Midlands Technical College.
He’s passionate about educating, informing, and resolving issues concerning Medicare and Medicare Advantage Plans, and considers it imperative that he does all he can to educate and inform the senior community as much as possible about Medicare.