Medicare Part D
What is it and how does it 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 2015 is $33.13 per month. Deductible: The standard Medicare Part D deductible is $320 in 2015. 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, which is at $2,960 in 2015. 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 $4,700 out of pocket in 2015. If you reach the gap in 2015, you will get a 55% discount on covered name-brand prescription drugs and a 35% 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.