The Medicare Drug Plan: 6 Key Facts
Anyone who has Medicare Part A or Part B can get Part D coverage regardless of income or health.
You are not obligated to enroll, but there may be consequences if you don’t sign up when you are first eligible to do so.
To get Medicare drug coverage, you must select one approved private drug plan among many offering different choices. There is no single government plan.
Is your income limited? If you qualify for a part of the program known as “Extra Help.” you’ll pay very little for your medications.
Are your drug costs very high? You’ll pay no more than 5 percent of the cost of each prescription after you’ve spent a certain amount of money out-of-pocket in any one year.
Do you have better drug coverage already? You probably won’t need Medicare’s Part D coverage. But it’s wise to check.
- Access to hundreds of discounts and programs
- Subscription to “AARP The Magazine”
- Free second membership for any adult in your household
Continue Enjoying Your Member Benefits!
- Hundreds of discounts, programs and services
- Subscription to “AARP The Magazine”
- Free membership for your spouse or partner
Start Getting Your Member Benefits Today!
- Hundreds of discounts, programs and services
- Subscription to “AARP The Magazine”
- Free membership for your spouse or partner
Medicare Prescription Drug Plan Availability In 2022
In 2022, 766 PDPs will be offered across the 34 PDP regions nationwide , a substantial reduction of 230 PDPs from 2021 and the first drop in PDP availability since 2017 .
The relatively large decrease in the number of PDPs for 2022 is primarily the result of consolidations of plan offerings sponsored by Cigna and WellCare resulting in the market exit of three national PDPs from each firm in each region. This accounts for just over 200 PDPs offered in 2021 that will no longer be offered in 2022. Enrollees in these non-renewing plans will be automatically switched to other plans offered by the same plan sponsors, although they can choose to switch into a different plan.
Despite the reduction in PDP availability for 2022, beneficiaries in each state will have a choice of multiple stand-alone PDPs, ranging from 19 PDPs in New York to 27 PDPs in Arizona . In addition, beneficiaries will be able to choose from among multiple MA-PDs offered at the local level for coverage of their Medicare benefits.
When Can I Join Switch Or Drop A Medicare Drug Plan
- When you first become eligible for Medicare, you can join during your Initial Enrollment Period.
- If you get Part B for the first time during the General Enrollment Period, you can also join a Medicare drug plan from April 1 through June 30 and your coverage will start on July 1.
- You can join, switch, or drop a Medicare drug plan between October 15 through December 7 each year and your changes will take effect on January 1 of the following year, as long as the plan gets your request before December 7.
- If you’re enrolled in a Medicare Advantage Plan, you can join, switch, or drop a plan during the Medicare Advantage Open Enrollment Period between January 1 through March 31 each year.
- If you qualify for a Special Enrollment Period.
Recommended Reading: Social Security Widow Benefits Calculator
The Donut Hole Coverage Gap
The donut hole coverage gap is an important piece of information you need to know about Medicare prescription drug plans. You might have heard about this gap before, but maybe you werent quite sure what it was. Here is what Medicare beneficiaries need to know about the gap in their Medicare Part D coverage. Part D prescription drug plans have a monetary limit that some enrollees might reach that will limit what the drug plan will cover. This means that once your plan has paid a certain amount during the year, your coverage will decrease dramatically.
Once you hit this limit, you enter the hole or the gap in your Part D program coverage. During this period, you might be forced to pay as much as 25% of the costs of your medication out of pocket. However, the Medicare program has a maximum out-of-pocket amount or catastrophic coverage limit. Once you hit your annual maximum out-of-pocket limit, your Medicare Part D drug plan coverage starts up like usual again. So, now you can see why it is called the donut hole. Your initial coverage pays for items according to your plan terms up to the annual limit. Then, you lose some coverage benefits while you are in the donut hole. Once you hit your yearly maximum contribution limit, your plan starts to cover your prescription drugs like usual.
How Do You Choose A Medicare Part D Plan
The following factors may affect how you choose a Part D plan:
- Consider the medications you takehow many medications do you take, are they available as generics, do you have a chronic condition that requires specialty medications like insulin, nebulizers, etc.?
- If you want prescription drug coverage as part of a Medicare Advantage Plan, make sure you review the details of that drug coverageis it enough to cover your prescription needs?
- Standalone plans can differ among private insurers and offer various levels of drug coverage and different pharmacy networks.
- Review Part D plan options, considering monthly premium and other costs.
Don’t Miss: Federal Government Employee Retirement Benefits
Most Part D Enrollees Face Relatively Low Cost Sharing For Preferred Generic Drugs But Higher Amounts For Generics Not On The Preferred Tier
Figure 7: Distribution of Medicare Part D Enrollment by Cost Sharing for Generic Drugs in 2019
Around one-fourth of Part D enrollees pay $0 for preferred generics in 2019, but many pay $10 or more for generics that are not on the preferred tier. For preferred generics, 24 percent of PDP enrollees and 28 percent of MA-PD enrollees have a $0 copayment, while 74 percent of PDP enrollees and 63 percent of MA-PD enrollees face copays greater than $0 but less than $6. For generic drugs that are not on the preferred generic tier, nearly 4 in 10 PDP enrollees and 66 percent of MA-PD enrollees pay between $10 and $20.
Medicare Part D Benefits
When it comes to prescription medications, Original Medicare doesnt cover much. Medicare Part A only covers medications prescribed while in the hospital. To get Part D benefits for prescription drugs, you will need to sign up for a Medicare prescription drug plan. Medicare beneficiaries have two options for coverage:
Both options differ in cost, coverage, and benefits so its best to compare plans to find out which is the right fit for your needs. In this article, we will be discussing Medicare Part D and its coverage. Also known as Prescription Drug Plan , Medicare Part D is the part of Medicare that covers most outpatient prescription medications. Private carriers offer Part D as stand-alone plans as well as other Medicare plans. They are available to anyone 65 years or older, or those with a qualifying disability. To be eligible for coverage, you must enroll in Medicare Part A and/or Part B and live in the plans service area. For a more in-depth look at what Medicare Part D covers, visit: What Does Medicare Part D Cover.
Also Check: Donating Appreciated Stock Tax Benefits
Are You Automatically Enrolled In Medicare Part D
Please keep in mind that you are not automatically enrolled in Medicare Part D. Beneficiaries can enroll themselves if they are eligible for Medicare prescription drug coverage by determining if:
- Enrolled in Medicare Part A and/or Part B, and
- Live in the service area of a Medicare plan that includes prescription drug coverage.
If a beneficiary is eligible for Medicare Part D, they can enroll in a stand-alone Medicare Part D Prescription Drug Plan or Medicare Advantage Prescription Drug plan during certain times:
How To Get Medigap Plan D4
Medigap plans are only sold through private insurance companies. The best time to get Medigap Plan D is during your Medigap Open Enrollment Period because you wont have to go through medical underwriting.
- Your Medigap OEP last for six months and begins the month you turn 65 and are enrolled in Part B.
- You can get any plan thats available in your area regardless of your health if you enroll during your OEP.
- If you enroll outside of your OEP, you may be denied a policy because of your health unless you have guaranteed issue rights.
Learn more about buying a Medicare Supplement plan that fits your needs.
Don’t Miss: Social Security Benefits For Disability
What Drugs Are Covered By Medicare Part D
Part D plans help pay for medications you take regularly to manage chronic conditions, for example, heart disease, high cholesterol, or asthma. It also pays for medications you take for a short period of time, such as antibiotics. There are also some medications covered by your Original Medicare Part B plan and not covered by Part D.
Read more about Part B vs. Part D
When Is The Best Time To Sign Up For Medicare Supplement
The best time to enroll in a Medicare Supplement plan is during your initial Medigap Open Enrollment Period, the six-month window that begins on the first day of the month in which youre both 65 or older and enrolled in Medicare Part B. This enrollment period is the only timeframe in which insurance companies cannot deny you a policy based on your health status or any medical condition.
Attempting to enroll in a Medicare Supplement plan at any other time outside this enrollment period could result in penalty fees or denial of coverage.
Confused About Medicare Supplement Insurance Options?
Find committed, licensed agents who work to understand your coverage needs and find you the best Medicare option. Click Get A Quote or call 866-402-0504 to speak with a licensed insurance agent today.
Read Also: Veteran Owned Business Tax Benefits
What Is The Tier System For Medicare Part D
Every Part D plan formulary has a tier or step system. Think of it as a pyramid. The medications at the bottom of the pyramid are less expensive and the ones at the very top are the most expensive. Most plans have four to six tiers.
Medicare part d tier system
Heres how a formulary tier system works:
- Tier 1: preferred generic medications
- Tier 2: preferred brand name medications
- Tier 3: non-preferred brand medications
- Tier 4 and higher: specialty, select, high-cost medications
Medications on the tiers can be different for each plan, so its good to know where your medications fall within the tier system of the specific plan you are considering. Copays and coinsurance can vary based on tier level as well.
Medicare Part D Prescription Drug Plan Changes For 2023
Well we have all heard about the Inflation Reduction Act that was signed into law back in August of this year, but what does it mean to a Medicare Part D prescription drug plan and the changes we can expect?
In this article we are not going to be discussing everything dealing with the Inflation Reduction Act, but mainly what you can expect will take place each year for Part D prescription drug coverage. Keep in mind that when we are talking about Part D changes, it is not limited to just stand-alone prescription plans, but also includes the prescription component of Medicare Advantage plans .
Don’t Miss: Tax On Social Security Disability Benefits
Medicare Part D Plan Coverage Details
So, justwhat does Medicare Part D cover? The specific coverage details will vary from plan to plan. Typically, each plan will have a formulary or a list of medications that are covered under the plan. Part D plans include coverage for both brand-name drugs and generic drugs. Likewise, Part D plans usually include at least two drugs in all the common categories and classes of medications. However, the specific drug that you take might not be covered by your plan. You should check the plans formulary to make sure that your medication is covered before signing up.
Low Income Subsidy Questions
No. The “extra help” is a subsidy that people with Medicare and Medicaid automatically qualify for without having to complete an application.
If you do not have Medicaid, but Medicaid pays your Medicare Part B premium, you automatically qualify for “extra help” and you don’t need to apply.
You may still be eligible for “extra help” to pay for the Medicare prescription drug plan premiums. To apply for extra help, you should visit or call your local Social Security Administration office or apply on line at
Recommended Reading: How Do I Apply For Social Security Retirement Benefits
Most Healthcare Providers Accept Medicare
Medicare gives you many options regarding access to doctors, hospitals, specialists, and healthcare providers since its a Federal government program. Original Medicare allows you to get services from any provider who accepts the program. With a Medicare Supplement plan from an insurance company, you can choose the service thats right for your needs. Youll pay lower out-of-pocket costs like deductibles and copays.
Conversely, employer insurance plans have a limited number of hospitals and health providers they contract with, forming a network of individuals and locations. Outside this network, you get no or limited coverage from your health insurance provider, making it difficult to get an appointment, even though you have insurance. For instance, astudy by The Commonwealth Fund shows that 9 percent of individuals with employer insurance struggled to get a referral to a specialist compared with 2 percent of 65-plus individuals with Medicare.
Can I Have Both Medicare And Employer Insurance
You can still retain your personal insurance policy even after enrolling for Medicare. However, you have to consider how much it will cost to maintain both plans and which plan healthcare providers will consider first for services. You must be aware of any complications regarding penalties for late Medicare enrollment if you have an ACA plan. You can learn more about the implications of having both ACA and Medicare here.
You May Like: Spouse’s Social Security Benefits
What Does It Mean If My Prescription Drug Has A Requirement Or Limit
Plans have rules that limit how and when they cover certain drugs. These rules are called requirements or limits. You need to follow the rules to avoid paying the full cost of the drug out-of-pocket. If you do not get approval from the plan for a drug with a requirement or limit before using it, you may be responsible for paying the full cost of the drug. If needed, you and your doctor can also ask the plan for an exception.
Here are the requirements and limits you may see on a drug list:
PA Prior Authorization
If a plan requires you or your doctor to get prior approval for a drug, it means the plan needs more information from your doctor to make sure the drug is being used and covered correctly by Medicare for your medical condition. Certain drugs may be covered by either Medicare Part B or Medicare Part D depending on how they are used. If you don’t get prior approval, the plan may not cover the drug.
QL Quantity Limits
The plan will cover only a certain amount of a drug for one copay or over a certain number of days.
ST Step Therapy
The plan wants you to try one or more lower-cost alternative drugs before it will cover the drug that costs more.
B/D Medicare Part B or Medicare Part D Coverage Determination
Depending on how they’re used, some drugs may be covered by either Medicare Part B or Medicare Part D . The plan needs more information about how a drug will be used to make sure it’s correctly covered by Medicare.
LA Limited Access
7D 7-Day Limit
An Overview Of The Medicare Part D Prescription Drug Benefit
Medicare Part D is a voluntary outpatient prescription drug benefit for people with Medicare, provided through private plans approved by the federal government. Beneficiaries can choose to enroll in either a stand-alone prescription drug plan to supplement traditional Medicare or a Medicare Advantage prescription drug plan , mainly HMOs and PPOs, that cover all Medicare benefits including drugs. In 2021, 48 million of the more than 62 million people covered by Medicare are enrolled in Part D plans. This fact sheet provides an overview of the Medicare Part D program, plan availability, enrollment, and spending and financing, based on data from the Centers for Medicare & Medicaid Services , the Congressional Budget Office , and other sources.
You May Like: How Are Social Security Benefits Taxed In 2021
Enrollment In Medicare Prescription Drug Coverage
So, how do you get enrolled in prescription drug coverage? The enrollment process is straightforward, although there are some timing issues that you should be aware of. Failure to enroll during the proper enrollment period could lead to higher premiums and late penalties. If you are interested in a Medicare prescription drug plan, here is how to get signed up.
How To Apply Online For Just Medicare
Are you within three months of turning age 65 or older and not ready to start your monthly Social Security benefits yet? You can use our online retirement application to sign up just for Medicare and wait to apply for your retirement or spouses benefits later. It takes less than 10 minutes, and there are no forms to sign and usually no documentation is required.
To find out what documents and information you need to apply, go to the .
Also Check: The Learning Experience Employee Benefits