Prescription Drug Plans (MEDICARE PART D)

Original Medicare, which includes Parts A and B, lacks coverage for prescription drugs.

To fill this void, the Medicare Part D program was launched in 2003, established by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). Coverage for prescription medications under Part D commenced in 2006.

For more than 40 years, Medicare did not extend coverage to prescription drugs, and even today, Parts A and B remain without such coverage. Medicare beneficiaries are presented with two primary avenues for obtaining prescription drug coverage: either through a Medicare Advantage (Part C) plan that encompasses drug coverage or by enrolling in Medicare Part D. If you are insured under Medicare Part A and B without alternative prescription drug coverage, Medicare Part D is a recommended option. Delaying Part D enrollment when first eligible, with other adequate drug coverage, incurs a penalty for later enrollment.

Joining Medicare Part D entails several costs, including premiums in addition to any you might pay for Part B, with the possibility of increased rates due to late enrollment penalties.

A deductible must be met before Part D begins to offset your drug expenses, with Medicare setting an annual cap for this deductible. Once the deductible is satisfied, your plan assists with drug costs according to a tiered formulary that organizes drugs by type and price.

Upon reaching a predetermined medication expenditure, you enter the coverage gap, colloquially known as the “donut hole,” during which your out-of-pocket expenses could rise until you spend enough to advance to catastrophic coverage. This later stage substantially reduces your costs for medications for the remainder of the year, with annual adjustments to the spending thresholds for the coverage gap and catastrophic coverage.

Should your Medicare Advantage Plan already include prescription drug coverage, there is no necessity to enroll in Part D. Moreover, opting for Part D while covered by a Medicare Advantage plan that includes drug coverage may lead to losing your Advantage plan and re-reverting to your Original Medicare.

Should you need guidance or have inquiries regarding Medicare Part D or your options for prescription drug coverage, we are here to assist.