There are two options for obtaining a Medicare Part D Prescription Drug Plan (or PDP). You can opt for a PDP only, with no other coverage, or you can purchase a Medicare Advantage (MA) plan. A Medicare Advantage plan covers both medical services and prescription drugs. Within these two categories, there are many different companies and plans to choose from.
Keep in mind that each insurance company has its own list of covered medications. Therefore, it is crucial for you to make sure that you choose a plan that meets your needs by covering all or most of your recurring monthly prescriptions.
Medicare Part D has monthly premiums
Like Medicare Part B, Medicare Part D plans have monthly premiums. Average nationwide premium is $47 per month, but the premium will vary depending on which plan you choose, your location, which insurance company is offering the plan and your income.
When paying the monthly premium, you have the option to have the payment automatically deducted from your Social Security check. The insurance company you choose can arrange this payment method. You can also choose to have the premiums automatically deducted from a checking account, or pay through the mail.
Most Part D plans have annual deductibles
The deductible amounts on Medicare Part D plans also vary according to which plan you choose. The deductible is the annual dollar amount that you are required to pay before coverage kicks in. For 2015, the maximum allowable deductible for Medicare Part D is $320. For 2016, the initial deductible will increase by $40 to $360.
Initial Coverage Limit
After you've paid your deductible, you'll pay 25 percent of the drug costs, and the Part D plan will pay 75%. Once the total retail costs (the amount you pay, plus what the part D plan pays) of your prescription drug purchases reaches $2960 in 2015, or $3310 in 2016, you have reached the Coverage Gap, or "donut hole".
Medicare Part D “Donut Hole”
Medicare Part D is infamous for its “donut hole” or coverage gap. Once you are in the donut hole, you are responsible for paying your prescription drug costs. However, there are substantial discounts for both brand-name and generic drugs. Once you reach the True Out of Pocket (TrOoP) amount of $4,700 in 2015 or $4850 in 2016, your Part D plan will start covering your medications again.
Once you are out of the coverage gap, you plan pays according to the Catastrophic Coverage Schedule. This means you are responsible for a maximum of $6.60 for brand name medications and $2.65 for generic ones.
Closing the Part D “Donut Hole”
The Affordable Care Act has made some changes to the Medicare Part D coverage amounts in an effort to reduce your prescription expenses while you are in the coverage gap. Once you reach the donut hole, you will receive a discount on brand name drugs and generic drugs. These discounts will gradually increase as you can see below until 2020.
Since there is a late-enrollment penalty for delaying the purchase of a PDP, you may benefit from signing up for a Part D plan even if you are not currently on any medications. In this way, you can choose the least expensive plan in order to avoid the penalty, with the option of switching to a more comprehensive plan if your needs change.
Even you do not purchase a Medicare Part D plan, you can still benefit by being a smart consumer. Visit our page regarding How to Pay Less for Prescription Drugs and learn how to receive a free prescription drug discount card. We also provide information about how purchase your monthly recurring medications at reduced prices via international pharmacies.
If you are interested in receiving a quote on Part D prescription coverage, we can research your options and help you make a decision regarding which plan is right for you. We are able to offer quotes from a variety of carriers, such as:
If you are not comfortable with the online quote process, or if you have any other questions, please contact one of our MediGap Personal Benefits Consultant at 866-323-1441. You may also e-mail us at info@MediGapAdvisors.com. Remember that our services are offered to you with zero cost and with no obligation. Our goal at MediGap Advisors is simply to help you understand your Medicare Part D Prescription Drug Plan and help you make informed decisions regarding your coverage.
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Disclaimer: Medigap Advisors is not connected with or endorsed by the U.S. Government or the federal Medicare program. Medicare has neither reviewed nor endorsed the information contained on this website. This is not a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE or consult www.medicare.gov (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week.