How to Select a Medicare Part D Plan for Prescription Drug Coverage.
Medicare is a wide ranging government funded health care assistance program, however anyone who wants prescription drugscoverage needs to enroll into Medicare Part D. This is a separate government insurance policy that needs to be applied for. Learn how to shop for and select an effective, yet affordable, Medicare Part D Plan below.
The base plans of Medicare, known as Part A and Part B (“Original”), help pay for health care costs for than 60 million Americans most of whom are 65 years of age and older as well as some disabled people, regardless of age. The Original plans do not pay for prescription drugs though. This is where Part D is needed.
Part A and Part D do not cover prescription drugs
Medicare also provides coverage for some people with permanent disabilities regardless of age. Anyone applying for Social Security benefits is automatically enrolled in Original Medicare, also referred to as Parts A and B, which covers hospital and hospice care, home health services, doctor visits and lab tests. This coverage does not include the cost for prescription medicines. Persons desiring such coverage must sign up for Medicare Part D, which carries an additional cost.
Part A coverage (hospital services) is free to all recipients while Part B (medical services) requires payment of about $135 monthly premium for most people. The income limits change each year and are adjusted, but it will normally be in the high $80,000 annual income range. The monthly premium for Part A is usually deducted from the monthly payment of Social Security benefits. If a person is not yet receiving benefits, the premium must be paid directly.
How does Medicare Part D work?
Signing up for Part D coverage will impose an additional cost averaging about $35 per month as the premium. The actual cost will depend on the plan and the number of medicines you take, whether they are brand or generic medications and other factors. Individuals are not required to sign up for Part D when they initially enroll for Medicare benefits. Coverage can be added later, but a surcharge may be imposed making the monthly premium higher.
Part D plans are stand-alone policies provided through private health company insurers contracted by the federal government. Choosing a Part D plan can seem complicated. Understanding what is covered as well as the total potential out of pocket cost can help make a proper decision. Part D does not pay for over-the counter medicines like aspirin, weight loss aids, antacids or cough syrup. Part D covers insulin, but other medicines that are injected or taken intravenously are usually covered under Part B.
Each Part D plan has a specific list of brand name and generic drugs covered. Coverage will generally pay, at best, 80% of the cost for qualified prescription medicine, oftentimes less. You will be required to pay the balance as a co-pay either out-of-pocket or via a supplemental insurance policy. Your share of the cost may be higher for brand name drugs. Before selecting a Part D plan, you should review the medicines you currently take and ensure they are included by coverage in the plan.
Check to see if the Part D plan has an annual deductible. If so, you will pay the full cost for prescription medicines until that deductible amount has been reached. This is a standard practice of any insurance policy. While the federal government does put some restrictions around the maximum deductible, and it will change each year, many plans may not set a deductible higher than the low to mid $400 range. Some plans will set lower amounts and some will not require payment of any deductible. Plans with higher deductibles usually have lower monthly premiums.
Versions of Part D
Most insurers will offer several drug plan variations, even based on what part of the country you live in. For example, in the Seattle area United Health offers three options. Option A costs $28 a month and has a $415 deductible and a $15 co-pay requirement for generic drugs. Option B costs $34 a month and has the same deductible but the co-pay cost is lowered to $6. Option C has a $76 monthly premium, but there are no deductible costs to pay and co-pays are set at $10. Review the costs as well as the list of medications paid for.
Medicare Part C is often referred to as Medicare Advantage. Individuals may select this as an alternative to Parts A and B. It is simply a Medicare program administered through a private insurer rather than the federal government. At a minimum, Medicare Advantage plans must offer the same coverage as Parts A and B. Generally, most Part C plans offer more coverage than Original Medicare and may include partial payment for hearing, vision and dental services.
Many Medicare Advantage plans also include coverage for prescription drugs, so there is no need to add a separate Part D plan. Check the terms of your plan or ask the insurer. Costs for Medicare Advantage plans vary depending on location and the services covered. Medicare Advantage plans are based on networks and may require you to use a specified pharmacy at which you will likely pay a lower cost for your prescription medicine.
You can compare Part D plans available in your area using the government's Medicare Plan Finder available online. This will tell you if your medications are covered and plan costs including policy premiums and expected out-of-pocket expenses. Pharmacies participating in each plan will be named. Locate the Medicare Plan Finder here.
Adding a Part D plan when you initially enroll in Medicare is generally advised. If you are not taking any prescription drugs just choose a low-cost plan. If your medications change or if you do not like your plan, you are free to switch to a different plan during the annual open enrollment period, which occurs October-December. Plans frequently change deductibles, premiums, shared costs and the medications covered, so it is wise to at least look into options on a regular basis.