Medicare Part D

Since its creation in 2005, there has been a lot of confusion around Medicare Part D. While most people realize that Medicare Part D provides prescription drug coverage, many still have questions related to the cost of Medicare Part D prescription drug coverage. How and when the enrollment periods are also confusing to many people.

Medicare Part D Origination

The Medicare Modernization Act of 2003 created Medicare Part D to provide the prescription drug benefit for Americans aged 65 and older. It provides all beneficiaries the option to add drug coverage.

What Is Covered By Medicare Part D?

If you wish to participate, you must select the Part D coverage and select a corresponding prescription drug plan or Medicare Advantage Plan. It is important to note that not all prescription medications are included and may be excluded from this program. A Part D drug is has to be approved by the Food and Drug Administration, require a prescription, and for which payment is required under Medicaid. Biological products, including insulin and insulin supplies are covered under Part D. Smoking cessation drugs are also covered by the program.

What Does Prescription Drug Coverage Cost?

The cost for Medicare Part D drug plans varies depending on what drugs you use, which plan you select and whether you qualify to receive extra help paying your drug costs. The deductible for Medicare Part D $250 annually and reimburses 75% of the first $2,250 in prescription drug costs. Once the initial coverage limit ($2,250) is reached, you will be subject to another deductible, known as the "donut hole," in which you pay the full cost of prescription medication. $3,051.25 is the most you would have to pay out-of-pocket. When the total out-of-pocket expenses on formulary drugs (including the deductible and initial coinsurance) reaches $3,600 for the year, you pay $2 for generic or preferred drugs and $5 for other drugs, or a 5% coinsurance, whichever is greater for the remainder of the year.

When Is The Enrollment Period for Medicare Part D?

The initial enrollment period to join a Medicare drug plan is three months before your 65th birthday to three months after you turn age 65. Each year between November 15 - December 31 you can switch to a different Medicare drug plan if your needs change. (Note: People who are dually eligible for Medicare and Medicaid can switch drug plans at any time.)

What if I already have a Medicare Part D Prescription Drug Plan? Drug plans change from year to year so the drug plans that were available this year will not necessarily remain the same next. Premiums and cost-sharing requirements do change from year to year with the drug plans and the drugs on their formulary, and/or the rules for obtaining those drugs (e.g., prior authorization requirements, step therapy, and quantity limits).

Like many new health plan programs, there was a lot of confusion regarding Medicare Part D prescription drug coverage when the government first rolled it out in 2005. However, this valuable coverage is starting to catch on as more and more people sign up for it and realizing it isn’t as complicated as they thought. Once you have the program in place, be sure to review your policy each year to ensure the plan continues to meet your needs and covers the drugs you require.

Content provided by medicare.gov.

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