What Is It? Basic Medicare does not include coverage for prescription drugs at the pharmacy. Fortunately, the government has allowed certain private insurers to offer Medicare Prescription Drug plans (also known as Part D).
There are two types of plans. The first are Medicare Advantage Prescription Drug Plans (MAPDPs). This type of coverage is included as part of a Medicare Advantage plan. The other type are standalone Prescription Drug Plans (SPDPs). This is the type of coverage you get separately along with Basic Medicare or a Medigap plan.
- Why Get It? Paying for prescription drugs out-of-pocket can be very expensive. If you are currently taking medication, or think you may need to, it is highly recommended to get a Medicare Prescription Drug Plan.
- Who Is Eligible? You must be eligible for Basic Medicare (Parts A & B) to get a Medicare Prescription Drug plan.
When Can I Enroll? Both Medicare Advantage Prescription Drug Plans and Standalone Prescription Drug Plans are best purchased during the Initial Enrollment Period or the Open Enrollment Period.
The Initial Enrollment Period is the 7 month period surrounding your 65th birthday -- 3 months before, the month of, and 3 months after your birthday. If you fail to get coverage during this time, you could face the Medicare Part D penalty.
Next is the Open Enrollment Period, which begins on October 15 and ends on December 7. The Open Enrollment Period is also a good time to switch plans if you already have one.
Lastly, it is possible to enroll in a drug plan after the above enrollment windows, or during the Special Enrollment Period. The Special Enrollment Period is only open to those who recently had a major life change, such as a move or a loss of health coverage.
Since Special Enrollment is limited, it is important that you do not miss the Initial or Open Enrollment Periods. Your coverage can be delayed. You could also face a penalty for not having coverage. As of 2017, the penalty is $35.63 times the numbers of months you went without coverage. For example, if you went 36 months without Part D, you would have to pay $1,282.68 for the year.
How Much Does It Cost? Monthly premiums for Medicare Prescription Drug Plans vary by carrier, plan, the state you live in, and the drugs you require. Premiums for MAPDPs average around $5-$20*** per month, but can start as low as $0*** per month. SPDPs start around $11.40*** per month.
The deductible, or the amount you have to pay before the plan kicks-in, can also greatly vary. However, by law, your deducible cannot exceed $400 per year as of 2017. Many plans have deductibles that are even more affordable.
Also, once your total prescription drug costs exceed $3,700, the insurance temporarily pays less -- 60% for brand name and 49% for generic drug costs -- for the next $1,740 in drug costs. This coverage gap is known as the "Part D Donut Hole." After that, the plan kicks back in as catastrophic coverage and starts paying for nearly all of the new costs. Note that the Donut Hole is projected to get much better and pay for 75% of costs by 2020. Remember that most of your costs are covered before and after the Donut Hole gap.
When shopping for a plan, it is important to compare plans apples-to-apples by formulary. The formulary is the exact drugs that the plan covers, and different formularies have different costs.
- How to Enroll? The enrollment process is simple. To begin, speak with a licensed sales agent today by calling 855.402.1472 and apply right over the phone.