What is Part D, and Do I Need It?

Medicare Part D

Medicare Part D is a relatively recent addition to Medicare. It was started as part of the Medicare Modernization Act of 2003 and was put into effect in 2006. It covers prescription drugs, and is administrated through  private insurance agencies approved by Medicare. Anyone with Medicare Parts A and B is eligible for Part D.

During upcoming open enrollment, which runs from October 15 – December 7, you can add, change, or drop a Medicare Part D plan. You can either get a stand-alone Medicare Part D plan or enroll in a Medicare Advantage plan that includes Part D. It is advised that you enroll in Part D even if you don’t think you need it, in order to avoid paying penalties for late enrollment later.

To save money and avoid the donut hole coverage gap, always ask your doctor if there are generic versions of the drugs you need to take, sign up for your plan through Medicare.gov, and only put your most expensive and brand name drugs under your Part D plan.  

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. Sign up for a Part D plan through Medicare’s Plan Finder.

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 of limited income with their Medicare Part D costs. Depending on your level of Extra Help, this may include monthly plan premiums, copayments, and deductibles.

You may also be able to join, switch, or drop Medicare Prescription Drug Plans during a Special Enrollment Period, which may occur any time of the year that you have a qualifying situation. Some situations that may qualify you for a Special Enrollment 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 Enrollment Period.

Medicare Part D Costs for 2018

According to Toni King in the San Antonio Express-News, the Part D cost changes for 2018 are as follows:

“Initial Deductible: Will be increased by $5 from $400 in 2017 to $405 in 2018.

Initial Coverage Limit: Will increase by $50 from $3,700 in 2017 to $3,750 in 2018 where the 2018 “Donut Hole” begins.

Out-of-Pocket Cost: Will increase also increase by $50 from $4,950 in 2017 out of pocket to $5,000 in 2018 out of pocket: begins once you reach your Medicare Part D plan’s initial coverage limit ($3,750 in 2018) and ends when you spend a total of $5,000 in 2018. You will spend 35 percent of covered brand name drugs, the drug manufacturer will pay 50 percent and the prescription drug plan will pay the remaining 15 percent of the covered brand name prescription. For generics in the donut hole, you will pay maximum 44 percent co pay and the prescription drug plan will pay the remaining 55 percent.

If your prescriptions are not in your Part D formulary, then you will pay all of the prescription drug cost, which is why one must verify that all of their prescriptions are in the specific chosen Medicare Part D formulary which can change every year.”

Related Links

Medicare Part D Premiums to Decrease

Medicare Part D: Healthcare’s Current Silver Lining

3 Medicare Part D Tips During Open Enrollment

Understanding the Medicare Donut Hole

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