Medicare Part D is optional prescription drug coverage. Medicare Part D is available as a stand-alone plan through private insurance companies, and the monthly fee varies among insurers. You'll share in the costs of your prescription drugs according to the specific plan in which you’re enrolled. Those costs can include a deductible, a flat copayment amount, or a percentage of the full drug cost (called "coinsurance").
If you want prescription drug coverage, you can purchase it with a Medicare Supplement plan or get it through a Medicare Advantage plan if there's one in your area that offers this coverage.
If you have limited income and cannot afford your medications even though you receive Medicare Part D benefits, you may be eligible for the Extra Help program, which offers financial assistance for your monthly premium, deductible, copayment, or coinsurance. Learn how you can qualify and apply for this program.
LEARN MORE about Part D Prescription Drug Plans.
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1. When Can I Enroll?
Unless you're eligible for a Special Election Period you must enroll in a Part D Prescription Drug plan:
- During your Initial Coverage Election Period (the period beginning three months before and ending three months after your 65th birthday month); or
- During the Annual Election Period which runs from October 15-December 7 for a January 1 enrollment.
Note: Medicare begins the first of the preceding month for individuals whose birthday is the first day of the month.
2. Can I Purchase A Separate Part D Plan With A Medicare Advantage Plan?
Some plans (called "MAPD" plans) include prescription drug coverage while others (called "MA" or "MA Only" plans) do not.
If you purchase a Medicare Advantage HMO or PPO plan without prescription drug coverage, you CAN'T purchase a separate Part D plan. You can purchase a separate Part D plan with a PFFS (Private Fee for Service plan) that doesn't provide drug coverage and with certain other types of plans.
You can also purchase a Part D plan with a Medicare Supplement plan or with Original (Fee for Service) Medicare (i.e. without enrolling in either a Medicare Supplement or Medicare Advantage plan).
3. How Do Part D Plans Generally Work?
Typically you pay a monthly premium to be covered under the plan. (Some zero premium Medicare Advantage plans include Part D coverage with no additional premium.)
Also, you should be aware of variations in the coverage and cost sharing associated with plans. Coverage generally follows this pattern:
- If the plan has a deductible, you pay the full amount of your prescription drug purchases until the deductible is met.
- After you satisfy the deductible (if any), you'll pay a share of the costs according to the terms of your plan. This part of the plan is called the "Initial Coverage Limit." Your share, which you typically pay to the pharmacy at the time of pickup (or to your mail order pharmacy), could be a flat amount (copayment) or a percentage of the total amount (coinsurance).
- Once your costs reach a certain amount (this is called entering the "coverage gap" or the "donut hole") your cost share will change.
- When you've paid a certain annual maximum amount out of your own pocket [the 50% manufacturer's discount (70% for 2019) received during the coverage gap and certain other items are also included in this calculation which is referred to as "TrOOP"], you automatically qualify for "catastrophic coverage." This means you will only pay a small copayment or coinsurance amount for prescription drugs during the rest of that particular year.
4. Aren't All Part D Plans The Same?
Although they must meet minimum Federal guidelines (called the Part D "standard benefit model"), many Part D plans provide more liberal benefits.Part D plans differ markedly between carriers, and one of the most important differences is which drugs are covered and which are not. This is a particularly important consideration for individuals who have been prescribed expensive medications.
Each carrier provides a formulary that lists which drugs are covered under that plan and which copay tier the drug falls into. Subscribers should always check the formulary to determine if their drugs are covered--and at which copay--before purchasing a plan. It's also a good idea to review your Medicare prescription drug coverage every year to see if your plan covers the medications you need now and may need in the upcoming year.
Be sure to talk to your doctor to see if you're taking the lowest cost medications available to you.
Specific coverage may vary from plan to plan, so read your documentation carefully.
5. What Is A Formulary Finder?
Medicare (CMS) publishes a formulary finder that permits you to enter your medications and then lists the carriers that cover these medications in their formulary. After you enter your drugs into the formulary finder there are various options as to how to present the findings (e.g. lowest to highest cost plan, etc.)
6. How Are Medications Covered In The Coverage Gap (Donut Hole) And How Does That Differ From How Drugs Are Covered In The Initial Coverage Stage Before I Reach The Donut Hole?
The Part D standard benefit model coverage gap ("donut hole") begins when total drug costs reaches $3,750 and ends when TrOOP reaches $5,000 in 2018 ($3,820 and $5,100 respectively in 2019). Regular copays stop during the coverage gap. Instead, beneficiaries pay 44% for generic drugs and 35% for brand-name drugs in 2018 (37% and 25% respectively in 2019).
In determining how you get into the coverage gap, you count the total cost of the drugs (both what you pay and what the carrier pays). In counting how you get out of the coverage gap, you count TrOOP (generally what you you pay plus manufacturers' discounts).
Some carriers offer MAPD plans that increase the standard benefit model coverage gap to a higher amount. Also, some MAPD and stand-alone Part D drug plans provide what is called "gap coverage" [i.e. some copays (usually for generic drugs) are continued during the donut hole].
7. What Is Catastrophic Drug Coverage And How Do I Become Eligible?
Once you've spent $5.000 in true out of pocket costs ("TrOOP") in 2018 ($5,100 for 2019), you're out of the coverage gap. When you get out of the coverage gap, you automatically qualify for "catastrophic coverage." Once you qualify for catastrophic coverage you pay the greater of (1) 5% or $3.35 for generic drugs or (2) 5% or $$8.35 for brand-name drugs in 2018. These numbers will be the greater of (1) 5% or $3.40 for generic drugs or (2) 5% or $8.50 for brand name drugs in 2019.
All amounts you pay for medications as well as the manufacturer's discount that applies to brand-name drugs during the coverage gap (also called the "donut hole") count as "TrOOP" ("true out of pocket cost"). Manufacturer's discounts are 50% in 2018, and in 2019 they will be 70% (manufacturer's discounts will also apply to brand-name biosimilar drugs starting in 2019).
Note that one set of calculations (total drug cost) determines how you ENTER the coverage gap; another set of calculations (TrOOP) determines how you GET OUT of the coverage gap and enter catastrophic coverage.
8. What Are The Changes To The Part D Standard Benefit Model For 2018 and 2019?
Please see this chart to see how the standard benefit model has changed yearly from 2006 to 2019.
9. How is the Donut Hole Being Phased Out for Standard Benefit Model Part D Plans By 2020?
The following shows how the donut hole is being phased out (the phase out began in 2011) from 2018 to 2020:
"Standard" benefit model plans now have 25% coinsurance during the initial coverage phase. Since the phase out of the donut hole is tied to the standard benefit model, by definition the donut hole will be considered as being fully eliminated in 2020 (the donut hole is considered as being eliminated for brand-name drugs in 2019).
- 2018: 35% for brand-names and 44 percent for generics
- 2019: 25% for brand-names and 37 percent for generics
- 2020: 25% both for brand-names and generics
10. What Utilization Management Techniques Are Used By Part D Plans?
11. What Is The Penalty For Not Buying A Drug Plan When I Am First Eligible?
You may owe a late enrollment penalty (LEP) if, at any time after your initial enrollment period is over there is a period of 63 or more continuous days when you don't have Part D or other creditable coverage (i.e. coverage that, as a mimimum, meets the Part D standard benefit model).
The late enrollment penalty is assessed for EACH month that you haven't had creditable drug coverage.
The amount of the penalty changes annually and is based on each year's national average Part D premium ($35.02 for 2018 and $33.19 for 2019). The monthly penalty is 1% of that year's national average Part D premium multiplied by the number of months you have not had creditable coverage.
12. What Are The Part D Premium Adjustments For High Income Beneficiaries?
Part D Prescription Drug Plan premiums are adjusted if your income exceeds a certain level. This additional premium (called the IRMAA) will be deducted from your Social Security check and is in addition to your premium for the basic plan.(You will have to pay Social Security directly for any IRMAA payments if you are not drawing Social Security.)The Bipartisan Budget Reconciliation Act of 2018 changed how IRMAA is calculated in 2019. See FAQ 9 in the Medicare Overview section for details. Click here for the 2019 Part D IRMAA Schedule.
13. What Are Some Ways Of Saving On Drug Costs?
14. How Can I Find What Plans Are Available In My Area?
For a complete listing of plans available in your service area please contact 1-800-Medicare (TTY users should call 1-877-486-2048) or go to www.medicare.gov. Your copy of Medicare & You 2019 also contains a listing of 2019 plans. in your general area. You can also contact us at 877-734-3884 for this information.