Learn About Medicare Prescription Drug Coverage
- Why Buy a Medicare Part D Plan?
- What Does Medicare Part D Cost?
- Who Is Eligible?
- When Can I Enroll?
- How Do I Get Enrolled?
- Where Do I Get Enrolled?
- Are Prescription Drug Discounts Available?
- What is the Late Enrollment Penalty?
- What is a Medicare Part D Drug Formulary?
- What Medications Are Not Covered by Part D Plans?
- Show Me Plans in My State!
Medicare Does Not Cover Prescriptions
Medicare pays about 80% of your hospital and doctor expenses, but they don't pay for any part of your prescriptions, unless you are hospitalized. That's where Part D of Medicare comes in. A Medicare Part D plan is cheap coverage for your prescriptions. It's not required, but it's foolish not to have it. Our goal is to help you find the best Medicare Part D plan for you.
Medicare Part D Cost
Medicare Part D has several costs, as follows:
- PREMIUM: The average nationwide monthly premium for 2018 is $34
- DEDUCTIBLE: The highest deductible a plan can charge in 2018 is $405.
- COPAYMENTS: A copayment, or copay, is a fixed dollar amount for your prescriptions.
- COINSURANCE: A coinsurance is a percentage of the price of your prescription.
Some plans have a $0 deductible, offering immediate coverage. Other plans may offer a deductible that's less than the maximum allowed. In general, a $0 deductible plan is only a good deal if it also has the lowest premium and offers your medications at the lowest price.
Medications will have a copay or coinsurance, but not both. Be sure to check the cost of each of your medications with plans before enrolling. Your goal is to find the plan with the best overall annual costs for your specific medications.
Each plan organizes the drugs it covers in different levels, called tiers. Each tier has its own copay or coinsurance amount. Your medications may or may not be included in all the plans in your area. If covered, they could be in different tiers and have different copay or coinsurance amounts.
Who Is Eligible?
You are eligible to enroll in one of the Medicare prescription plans available in your state as soon as you are entitled to Medicare benefits. You can get prescription benefits through two types of private plans: a Prescription Drug Plan (PDP) that provides drug coverage only or a Medicare Advantage plan with prescription drug coverage (MA-PD), also known as Medicare Part C. About 66% of all Part D beneficiaries use the PDP-only option.
When Can I Enroll?
The Medicare enrollment period, also known as the Medicare Annual Election Period, starts on 15 October and ends 7 December. If you are becoming eligible because you are turning 65, you have an Individual Election Period (IEP) that starts three months before your birth month and ends two months after your birth month, giving you plenty of time to get signed up. If you are eligible due to a disability, you have a similar IEP starting on your 24th month of SSI.
How Do I Get Enrolled?
You must affirmatively enroll in a Part D plan to participate; It’s not automatic. If you are eligible and don't enroll during the open enrollment period (or your individual enrollment period if you are just turning 65) you will have to pay a late-enrollment penalty (LEP) to use the benefit. The penalty is about 1% the average premium times the number of months that that you were eligible but not enrolled.
Where Do I Enroll?
You enroll in Part D plan through an authorized health insurance agent, through the plan itself, or through the Medicare.gov website.
The first step is to compare plans. Click here to visit your state's Part D plan page.
Are Prescription Drug Discounts Available?
All Medicare prescription plans are different. Each insurance carrier covers drugs differently. This is why it is so important to verify the cost and coverage of your prescriptions before you choose a plan. If you do not have regular prescriptions, then the lowest cost plan is generally safe. You can always switch at the next open enrollment.
All prescription drugs are not covered at the same level. There are five standardized tiers in each drug formulary, giving participants incentives to choose generics over brand name drugs. The lower-cost medications are assigned to lower tiers making plans easier to compare.
Be aware that a Part D Plan does not cover everything, and it's only good for up to $3,750 of initial benefits (2018 initial coverage limit). After that, you pay out of pocket until you become eligible for catastrophic coverage. This is why we highly recommend GoodRx for People on Medicare. They have the most innovative prescription discount program we've seen for seniors.
What is the The Late Enrollment Penalty (LEP)?
Unless you are exempt, Medicare will impose a penalty if you do not join a Part D plan when first eligible to do so. Those exempt from the penalty include people who:
- Had creditable coverage, or
- Qualify for the Low Income Subsidy (LIS), or
- Were eligible for a Special Enrollment Period because they were impacted by Hurricanes Katrina, Wilma or Rita
The penalty is 1% of the national base monthly premium ($34.10 in 2016) for every full month the individual could have been but was not enrolled. The base calculation changes annually, and is based on the average national base premium.
The lifetime penalty is added to the person’s monthly premium is collected by the Part D plan, not directly by CMS. If a penalty is imposed before the beneficiary is 65, it is removed when the he or she turns 65.
If the late enrollment penalty was imposed in error, there is a process to request reconsideration. Medicare uses Maximus, an independent review organization, to process reconsiderations. The process can take months, and the decision is final.
Note: The late enrollment penalty must be paid during the time the penalty is being reconsidered. On approval, the beneficiary will be reimbursed for all erroneous penalty charges.
What is a Drug Formulary?
Most new beneficiaries are surprised to learn that drug plans are not required to cover all Medicare approved medications. This is one of the reasons that shopping for a plan can be challenging.
Every drug plan has a unique list of medications called a formulary. The formulary is simply a list of covered medications and pricing tiers. Plans create their formulary using the guidelines set by the United States Pharmacopoeia.
The formulary system makes choosing a plan challenging. It forces you to compare the medications you use across all formularies in order to find the best price.
There's no easy way around it. If you take medications, you'll need to figure out what your out-of-pocket costs would be for the drug plans in your area. You can do this using the drug plan comparison tool.
What Medications Are Not Covered by Part D Plans?
Here is a brief list of the medications that Part D plans are not allowed to cover:
- Medications that are not approved by the FDA
- Medications not available to sell in the United States
- Medications which are covered under Medicare Part A or Part B
- Medications for weight loss or weight gain
- Medications for fertility
- Medications for sexual disorders (e.g., erectile dysfunction)
- Medications used for cosmetic purposes (e.g., Rogaine for hair growth)
- Nonprescription drugs (e.g., OTC cold, cough and flu medications)
Shop Medicare Prescription Drug Plans in Your State
The Medicare Part D plan (aka, "plan d medicare") data on MedicareWire.com comes directly from Medicare.gov and CMS.gov and is subject to change. CMS has neither reviewed nor endorsed the information on this site.
The MedicareWire.com website is available for educational purposes. Our goal is to present senior citizen health insurance information accurately and without bias, based on our interpretation of factual information. However, this site is not intended as a substitute for legal, health, or financial advice from a licensed professional. On this page we help consumers:
Compare 2018 Medicare Prescription Drug Plans (Part D of Medicare) available in your area. Compare premiums, deductibles, copays, and coverage by exact prescription (formulary). Find the lowest cost on your medications in your area!
MedicareWire.com is an independent research, technology and publishing organization. We are not affiliated with Medicare, Medicare plans, insurance carriers, or healthcare providers, nor are we compensated for Medicare plan enrollments.
This page is maintained by David Bynon and was last updated on .