If you’re age 65 or older, chances are that you have questions about Medicare. The federal government’s healthcare program has undergone a number of changes and has become almost infinitely more complex since its introduction in 1966. If you’re wondering about Medicare Part D in particular, you’ve come to the right place.
The history of Medicare Part D
Part D is also known as the Medicare prescription drug benefit, and it does basically what you would expect given the name. It initially took effect in 2006 after being established as a portion of 2003’s Medicare Modernization Act.
If you are already signed up for Medicare benefits under Part A or Part B, you are eligible for Part D drug benefits. These benefits take the form of private insurance company plans, which are developed in concert with Medicare to service a wide variety of prescription drug needs. Medicare participants usually join either a Prescription Drug Plan (PDP) or a Part C health plan that covers all of the medical and hospital services from Parts A and B in addition to extra costs not covered by Parts A and B such as prescription drugs. In order to join a Part D drug coverage plan, you need to submit an enrollment application via the Medicare Plan Finder or the individual plan’s website. You’ll also need to complete a paper enrollment form. Finally, you need to call the phone number associated with the plan as well as Medicare itself (dial 1-800-633-4227). You’ll need to provide the representatives with your Medicare number as well as the date that your Medicare Part A or Part B coverage began. All of this information is on your Medicare card.
What it covers
Each Medicare Part D plan has its own list of approved drugs. This is typically called a “formulary” in the plan description and associated literature. Most drug plans organize drugs into tiers based on cost, where lower tier drugs are less expensive than higher tier drugs. Drug plan administrators can and do make changes to their formulary during the year, though they are required to provide you with at least 60 days notice in writing before the change takes effect. Administrators are also required to notify of any upcoming changes when you request a refill, as well as provide you with a 60-day supply of the drug under the previous plan rules.
Medicare Part D does not cover every drug under the sun. It usually excludes drugs that are not approved by the Food and Drug Administration as well as drugs that are not available for prescription or purchase in the United States. Part D may also exclude anorexia, weight loss, or weight gain drugs, fertility drugs, and erectile dysfunction drugs. Additionally, cough medicines, cold relief drugs, and cosmetic drugs are also usually excluded from coverage.
What it costs
After you are enrolled in Medicare Part D, you will pay a monthly premium fee as well as a yearly deductible. The deductible is basically the annual cost for your prescriptions prior to Part D kicking in and paying the rest. While deductible costs vary according to which plan you select, no drug plan may have a deductible higher than $360 as of 2016. In addition to the monthly premium and deductible fees, you will also be responsible for co-payments or co-insurance, which is the cost for each of your prescriptions after you have paid the deductible. Most Part D plans have different co-payment tiers. As an example: You might have to pay a set amount of $20 for any drugs on a particular tier. Co-insurance is a bit different than co-payment, in that you pay a percentage of the drug cost instead of a set tier amount.
You also may have to pay for costs in the coverage gap, also commonly referred to as the Medicare donut hole. The gap begins after you and your drug plan have exceeded a set amount for covered drugs. In 2016, for example, once you exceed $3,310, you are in the gap. If you reach the gap, you will pay no more than 45% for brand-name drugs.
Depending on your Part D plan, plan provider, and your personal financial situation as documented to Medicare, you may qualify for Extra Help, which can further reduce the costs of prescription drugs. Total costs for your Part D plan will vary based on the drugs you need, the plan you choose, whether or not you obtain the drugs from a pharmacy in your plan’s network, and whether or not the drugs are on your plan’s formulary. Consult with your doctor and view the Medicare plan finder to determine the Part D plan that best fits your individual needs.
When to join Part D
Medicare features both initial enrollment periods and yearly enrollment periods for Part C and Part D. There are numerous restrictions as to when you may sign up, so be sure and visit the official Medicare website for further information. Your enrollment period may vary based on whether you’re newly eligible or already enrolled, whether you’re newly eligible because of a disability, whether or not you have Part A coverage, and a host of other factors.
Part D and other insurance
Since Part D is basically a supplemental drug-focused plan rather than a comprehensive health care plan, it often works in concert with your existing insurance. If you have employer or union health coverage, COBRA, Medigap, Medicaid, or you use a long-term care facility, food stamps, or HUD housing assistance, you’ll want to read about how Part D functions in your particular case. If you currently have veterans’ benefits, TRICARE military benefits, Indian Health Services, or Federal Employee Health Benefits (FEHB), you will probably want to keep your existing coverage.