With Part D, private insurance companies enter contracts with Medicare to operate plans. Under each Part D plan, prescription lists and prices must meet Medicare’s standards.
Part D plans offer a wide range of drug coverage options, deductibles, and premiums. With that said, not all Part D plans cover all prescription medications.
Across the selection of plans in your area, prices can vary widely for the same drug.
When selecting Part D coverage, consumers should refer to currently taken medications. Those who can anticipate their prescription demands will benefit by using that information as a guide to the right prices when comparing plans.
You can apply for Medicare Part D by secure phone call with one of our licensed insurance specialists.
Be age 65, and a U.S. citizen or permanent legal resident of at least 5 years
Have a disability, and receive disability benefits for 2 years
Receive diagnosis with ALS, or end-stage kidney disease
In most cases, people sign up for Parts A and B through Social Security’s website, phone, or mail options. Otherwise, railroad workers apply through the Railroad Retirement Board (RRB).
Many people get Part A hospital insurance at no cost. Otherwise, those who didn’t work and pay taxes, or can’t claim any taxed work history of a spouse or parent, must pay a full or partial premium.
Most people have to pay a premium for Part B, regardless of work history.
The Two Ways to Get Medicare Prescription Drug Coverage
So far, Part D has been addressed as a stand-alone type of coverage that goes with Original Medicare (Parts A and B). Although this can be true, another option for Medicare drug coverage exists.
Within Medicare Part C, beneficiaries can get an all-in-one plan that provides many health benefits, including their Part D prescription drug coverage.
While many Medicare Advantage plans do have prescription benefits, some plans do not.
Typically, Medicare prescription drug coverage comes in two forms: a Part D stand-alone policy or a Part C Medicare Advantage Prescription Drug (MAPD) plan.
When it comes to Medicare prescription drug coverage, the Center for Medicare and Medicaid Services (CMS) prevents a person from having both forms of coverage at the same time.
If an applicant enrolls in a Part D program while enrolled in a Medicare Advantage Prescription Drug plan, the MAPD membership will cancel. Then, the applicant returns to Original Medicare Parts A and B, keeping the stand-alone Part D policy for drug coverage.
When do I sign up for Medicare Part D?
The initial enrollment is the best time to sign up for every part of Medicare. It is the ideal time to get prescription coverage without penalty.
Applicants that do not add either a Part D or a Part C MAPD plan during their initial signup may face a penalty when adding one later. In either form, you can apply for Medicare Part D coverage by secure phone call with our licensed insurance specialists.
Even for those not currently taking any prescription medications when beginning Medicare, Part D coverage is recommended.
Initial enrollment period: during the 7 months when first becoming eligible.
Annual open enrollment season: every October 15th through December 7th.
Medicare Advantage Disenrollment period: from January 1st through February 14th, if you have an MAPD plan you can drop it and get a stand-alone Part D policy, also returning you to Original Medicare.
General Enrollment Period: from January 1st through March 31st if you have a Medicare Advantage plan, you can switch to another plan, whether or not your current or new plan has built-in Part D coverage.
Special enrollment periods: based on exceptional life events and circumstances that prevented you from enrolling.
Why do I need Medicare prescription coverage?
In brief, Medicare prescription drug coverage reduces the costs of medicines. Especially for patients with long-term courses of prescriptions, this can amount to significant savings.
Some prescription drug plans come with zero deductibles. Many more offer achievable yearly deductibles.
Once subscribers pass the deductible amount for the year, the insurance benefits start. The insurer pays the agreed amount for a prescribed drug, and the consumer typically pays a copay.
All Part D plans must cover commonly prescribed drugs taken by the Medicare population, as well as most drugs in protected classes, like those for cancer or HIV/AIDS.
Although every plan that offers Part D coverage includes a wide array of prescription medications, some drugs are not covered while other drugs may have a high cost.
Pharmaceutical companies develop and manufacture a wide range of prescription drugs. The plans rank drugs in tiers based upon cost.
Drug tiers rank one through five, or six. Typically, the lower tiers have low prices and have many generic drugs. In contrast, upper tiers have higher prices and fewer generic equivalents.
The higher tier drugs cost more and get more limitations from the insurers. The insurers urge the use of effective lower cost generic drugs to reduce costs on all sides.
The Extra Help program can help to reduce many costs related to Medicare prescription drug coverage.
In order to qualify, this assistance program has income and asset limits. This low-income subsidy, or LIS, helps individuals and married couples with incomes up to 150 percent of the federal poverty level.
Applying for the Extra Help program can be done online, by phone. Overall, the application gathers financial information such as monthly income, savings, investments, other properties or second homes.
In cases of approval, beneficiaries get lower pricing on generic drugs and covered brand name drugs.
The Extra Help program protects beneficiaries from the “donut hole”, where normally prescription savings are reduced after heavy prescription demands in a single year.
The Donut Hole and Catastrophic Coverage
Although Medicare sets standards that all plans follow, Medicare prescription drug coverage has its limits.
Whether in a stand-alone policy, or an all-in-one Advantage plan, coverage standards reign in prescription costs in severe cases.
Across the board, Part D coverage contains a gap in coverage called the donut hole. Within a single year, the donut hole sets a limit on what both the consumer and the drug plan pays. After that, prices change to a set percentage.
In 2021 subscribers enter the donut hole at $4,130. Beyond that range of spending, subscribers pay a maximum of 25 percent of the price for brand name drugs until the year ends, or after spending a “Catastrophic” amount.
The 25% paid in the coverage gap can mean a dramatic increase for some drugs, while a dramatic reduction in cost for higher cost ones.
Once the donut hole begins, 95 percent of whatever the consumer spends on prescription drugs counts toward clearing this coverage gap. Drug costs add up to get the subscriber out of the donut hole.
In excess of a certain amount spent while in the coverage gap, a phase called Catastrophic Coverage begins, causing prices to fall dramatically until the year ends.
People with Extra Help are exempt from the coverage gap, or donut hole. This Social Security program will pay Part D costs including deductibles, premiums, Part D late penalties, and partial or full payment of the prescribed drugs themselves.
Sign Up for Medicare Part D
Whether through a stand-alone policy, or as part of an all-in-one Medicare Advantage Prescription Drug (MAPD) plan, beneficiaries can apply for Medicare Part D prescription drug coverage online, by telephone, or by mail.
Ideally, sign-up for Medicare prescription drug coverage when eligible for the first time, during the initial enrollment period. If the first chance to enroll passes by, late enrollees can apply during annual open enrollment from October 15th to December 7th.
Otherwise, applicants can sign up in a special enrollment period.
After open enrollment, applicants may still apply using another enrollment period.
For example, a special enrollment period always exists to join a five-star rated plan in their geographic area.
By researching plans using currently taken prescriptions, consumers can see the drug prices they will pay under a particular plan. In this way, they can assess the true costs when also considering premiums, prescription prices, and copays.
Easily find your dream Medicare plan with our free search tool; enter your zip below to get started!