Medicare Part D: Healthcare’s Current Silver Lining

Medicare Part D prescription drug costs

This story was originally posted on June 21, 2017 and was last updated on July 21, 2017.

Between the failed Senate healthcare bill and the proposed cuts to Medicare in the latest House Budget proposal, it can be hard to find positive news about the government’s health insurance program for senior citizens. But we have some for you: Medicare Part D is working and is polling well among beneficiaries.

According to Doug Schoen of Forbes, the prescription drug program that was added to the Medicare umbrella more than 10 years ago continues to beat spending projections and improve patient outcomes. He cites a poll conducted by Medicare Today that notes how nearly 90% of Medicare Part D recipients are satisfied with their plans. Add in the fact that the bill to create the Medicare prescription program was originally introduced with solid bipartisan support, and you have a positive sign amid the recent healthcare chaos that’s been plaguing the headlines.

So if you are aren’t already signed up for Medicare Part D, here’s what you should know. From eligibility and enrollment to costs and the “donut hole,” there remains a significant amount to cover when it comes to understanding the plan. Although Part D has been around for nearly 15 years now, it is still the “youngest” part of Medicare plans, so there’s going to be a lack of familiarity for some Medicare beneficiaries.

Needless to say, healthcare is an essential need for seniors. As you age, you have to deal with more health problems, and require more medical services and assistance. Perhaps one of the most important medical needs as you age is a prescription drug for chronic conditions or other health situations. Below, we answered three common Medicare Part D questions that Medicare beneficiaries should know how to answer, in order to clearly understand the details of signing up for prescription drug coverage.

How does Medicare Part D work?

Medicare Part D helps to cover the costs of your prescription drugs. Medicare-approved private insurance companies offer Medicare Part D Prescription Drug Plans. If you have Medicare Part A or Medicare Part B, you are eligible for Medicare prescription drug coverage. You can get this coverage in the form of a Medicare Advantage Prescription Drug plan (MAPD) or a stand-alone Medicare Part D Prescription Drug Plan. You can enroll in any of the Medicare Part D Prescription Drug Plans that serve the area where you live.

How and when do I sign up?

The Annual Election Period (or Fall Open Enrollment) for Medicare Part D Prescription Drug Plans lasts from October 15 to December 7 every year. During this time period, anyone with Medicare can enroll in a Medicare Part D Prescription Drug Plan or change from one plan to another.

You can enroll in a Medicare Prescription Drug Plan or change plans anytime if you qualify for Extra Help with your prescription drug costs. Extra Help (also known as the Low-Income Subsidy) is a program that helps beneficiaries with limited income with Medicare Part D costs. Depending on your level of Extra Help, this may include monthly plan premiums, copayments, and deductibles (see below for more information on eligibility requirements).

You may also be able to join, switch, or drop Medicare Prescription Drug Plans during a Special Election Period, which may occur any time of the year that you have a qualifying situation. Some situations that may qualify you for a Special Election Period include (but aren’t limited to) when you move out of a plan’s service area or if you live in a nursing home or other assisted-care institution. Eligibility for the Extra Help program is another situation that qualifies you for a Special Election Period.

What are my Medicare Part D prescription drug plan coverage costs?

Premium: You pay a monthly premium for a Medicare Part D Prescription Drug Plan, which varies depending on your state, insurance company, and particular plan. The national base beneficiary premium in 2017 is $35.63 per month. Deductible: No Medicare drug plan may have a deductible of more than $400 in 2017. However, your actual deductible will depend on your location, the insurance company you use, and the particular plan you choose. Many plans do have a deductible, and you usually pay all of your drug costs up to that amount. Some plans do not have a deductible (called $0 deductible plans), but these plans typically have higher premiums or higher copayment and coinsurance amounts. Initial coverage stage: Once you reach the deductible amount, you pay a copayment or coinsurance in the initial coverage stage until your total drug costs (what you pay, plus what your plan pays) reach the coverage gap. The Medicare Part D coverage gap is also called the “donut hole.”

Coverage gap: The coverage gap begins once you leave the initial coverage stage and ends when you spend a total of $3,700 out of pocket in 2017. If you reach the gap in 2017, you will pay no more than 40% on covered brand-name prescription drugs and receive a 49% discount on covered generic drugs. Under the Affordable Care Act provisions, there will be additional discounts in the coverage gap each year through 2020, when the coverage gap will be closed entirely, and you will have continuous Medicare Part D Prescription Drug coverage.

Catastrophic coverage: Once you have reached the out-of-pocket limit in the coverage gap, you qualify for catastrophic coverage. You pay only a small copayment or coinsurance for covered drugs for the remainder of the year in this stage. Only a small percentage of beneficiaries reach the catastrophic coverage stage each year.

Related Links

3 Medicare Part D Tips During Open Enrollment

Part D “Standard Benefit Plan” Highlights

Understanding the Medicare Donut Hole

Prescription Drug Rebates May Not Save Money for Medicare Beneficiaries

The Debate on Mandatory Prescription Drug Rebates in Medicare

Lowering Costs in the Drug Coverage Gap

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Medicare doesn’t cover everything. Luckily, those on Medicare can now start saving on out of pocket expenses like prescription drugs, dental, vision, hearing, and more. Over 1 million people have already received their free Medicare Plus Card.

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