A Medicare Part D Prescription Drug Plan (PDP) helps pay for your prescription drugs. This is not an automatic Medicare benefit. Part D plans are private insurance. You must enroll in a Medicare Part D plan if you want the coverage. In 2013, monthly rates are as low as $15.
Medicare Part D does not pay 100% of your prescriptions. Depending on the plan you choose, there are various deductibles, co-pays and co-insurances. There is also a an initial coverage limit (ICL) that changes each year. The new health care law is gradually closing the coverage gap (aka, the “donut hole”).
In 2014, Medicare Part D members pay 86% of the price for generic drugs and about 50% of the price (plus fees for dispensing) for brand-name drugs when the coverage gap begins. The good news is that the savings will continue through year 2020 when the gap is closed for good.
Using A Part D Plan At Your Preferred Pharmacy
Pharmacy agreements are different with each drug plan. Some plans have strict geographic limits, such as state borders, while others provide nationwide coverage. If you have an active life traveling, it will benefit you to have a policy that enables you to use pharmacies in all states.
Medicare Part D plans have a designated service area. This is the area where the provider operates. To enroll, you must live in the plan’s service area. Be aware that many providers offer mail-order services. This way you can have your prescription drugs mailed directly to your home.
Monthly Part D Premiums
Each health insurance company sets its own rates. Monthly premiums for prescription drug plans vary widely, even for similar coverage, so it pays to shop before you choose.
Insurance companies announce new rates and other premiums details each October. Be sure to check and compare rates each year prior to open enrollment.
Be aware that if you do not register for a Medicare Part D policy as soon as you are eligible, your future premiums will be higher. This late entry penalty is set by Medicare, not the insurance companies. Each month you delay after eligibility you will pay an additional 1% per month forever.
What If You Already Have A Credible Prescription Drug Plan?
If you currently have prescription drug coverage from an employer or union, call your employer or union’s benefits administrator prior to making changes to your plan. Your employer or union plan will tell you each year if your prescription drug coverage is creditable prescription drug coverage.
In most cases, when you drop your employer or union coverage, you will not have an option to get it back. Plus, most employer or union drug coverage plans cannot be dropped if you have other health care coverage (e.g., doctor and hospital) through their group plan. Be aware that if you drop coverage for yourself, you will not be able to keep coverage for your spouse and dependents.
Extra Help Paying For Prescription Drug Coverage
People with limited income and resources may qualify for Extra Help paying their Medicare prescription drug coverage costs. Extra Help is a Medicare program to help people with limited income and resources pay Medicare prescription drug costs. You may qualify for Extra Help, also called the low-income subsidy, if your yearly income and resources are below the established limits. Call 1-800-MEDICARE.