By Wiley Long
President
MediGap Advisors

How to Choose the best Medicare Prescription Plan

Newsletter Issue #8

In the past few months, I’ve covered a wealth of information about Medicare, and there’s still so much more information to cover. Last month, we talked about how Medicare works with employer-provided coverage. In this newsletter, I’d like to discuss the options available to help cover the costs of prescription medication.

Remember that the text that’s blue and underlined in this newsletter allows you to link to our website, with more information about the topic, just by clicking on it.

Studies show that about 2/3 of all people over age 65 take at least 1 prescription drug every day, and 25% take 3 or more.

Taking these numbers into account, you can imagine that drug costs can quickly add up. For many people, these therapies are life-saving or allow them to maintain an excellent quality of life.

If you are hospitalized and need medications during your stay, those costs are covered by Medicare Part A. But Medicare does not have any coverage for drugs taken on an outpatient basis built into it. Instead, these costs are paid through private insurance companies in one of two different ways.

As an individual, you may choose to purchase a Part D prescription drug plan (often abbreviated PDP) from a private insurer. The only benefit provided by a PDP is coverage for generic and brand name prescription drugs. You still need coverage through Medicare (parts A and B), and we strongly recommend purchasing a Medicare supplement plan as well to fill in what can be substantial gaps in traditional Medicare coverage.

Your other alternative is to purchase a Medicare Advantage plan. Often referred to as Medicare Part C, these plans are administered by private insurance companies, and not only cover hospital and doctor costs (what is traditionally covered by Medicare Parts A and B) but also the costs associated with prescription drugs. You might also hear people refer to these plans as MA-PDs.

Coverage for your prescription drugs works the same whether you have a Part D plan or a MA-PD.

In the past, once you and Medicare reached your out-of-pocket maximum for prescriptions, you entered what was called the donut hole, and in this virtual place, you paid more for the cost of your prescriptions before your coverage kicked in again. However, the donut hole was essentially closed in 2020.

Now, once you’ve reached your out-of-pocket maximum for the year ($5,030 for 2024), you’ll pay a flat rate of 25% for all prescriptions.

So if both PDPs and MA-PD work essentially the same, does it matter which plan you choose?

The answer is a resounding “YES!” and the reason is that each insurance company has a different list, or schedule, of drugs they will pay for. If you are already taking prescription drugs, we can help you to find a plan that will give you maximum coverage for those drugs at the lowest monthly premium.

What can you do right now to get coverage in place for when you turn 65?

Visit our Medicare Advantage and Part D Quote Page, give us a few pieces of key information about yourself, such as your age and zip code, and we’ll prepare quotes customized to your needs. We’ll follow that up with a call by one of our Personal Benefits Managers. My team will help you sort through the details, and will make sure any plans you are considering cover the drugs you need as fully as possible.

You can also always call us toll-free at (800) 913-3416. It’s crucial that you secure coverage when you turn 65 during your initial enrollment period (the month you turn 65, and the three months before and after that month); otherwise, you’ll be forced to wait until the yearly open enrollment period, and that may leave you without prescription drug coverage for many months. Don’t forget that my team and I are always here to help, so don’t hesitate to contact us!

I hope you’re finding the information contained in these newsletters of value.

Best regards,

Wiley P. Long III
President – MediGap Advisors