How Does Medicare Part D Work?
April 10, 2024 | Kari Mellone
Medicare consists of several different parts of coverage. Medicare Part A and Medicare Part B make up Original Medicare, which provides hospital coverage and doctor care, among other services. Find out more about what Original Medicare covers : What Do I Get With Original Medicare?
In this article, we’ll be covering Medicare Part D which is supplemental insurance that provides coverage for prescription medications not covered by Original Medicare.
How does Medicare Part D Work?
Medicare Part D is a prescription drug plan that can be obtained from a private insurance company that has contracted with Medicare to provide coverage on Medicare approved prescription medications. Medicare part D plans are available as stand alone prescription drug plans (PDPs) or as part of a Medicare Part C Medicare Advantage plan (MAPD).
Medicare Part D is not a part of Original Medicare.
Medicare Part D Penalty
If you go without Medicare or other creditable drug coverage for 63 or more consecutive days after your Initial Enrollment Period, you may face a late enrollment penalty. This penalty continues as long as you have Medicare drug coverage. The late enrollment penalty varies based on the duration of time without Part D or creditable prescription drug coverage and can change annually.
Medicare Part D Deductibles
Depending on your Medicare Part D plan and the prescription medications you are taking, you may or may not have a deductible. A deductible is a set dollar amount that you’re responsible for paying before your insurance provides any coverage on prescription medications. For instance, if your Medicare plan’s prescription deductible is $500, you’ll cover the entire cost of your medications until your spending hits $500. At that point, your Medicare Part D plan will move into the next coverage stage, where you will have cost-sharing in the form of copays or coinsurance. Deductibles vary among different plans, however, no plan can exceed the Medicare allowed limit ($545 in 2024), and some Part D plans have no prescription deductible.
Medicare Prescription Deductibles: What You Need To Know
Medicare Part D Coverage
Medicare Part D covers prescription medications that are approved by Medicare. Every plan that provides Part D coverage, PDP or MAPD, will have a designated prescription formulary or list of each medication covered by the plan. This is different for each plan, so it is important for Medicare beneficiaries to ensure the plan they enroll in covers their prescriptions.
Medicare Part D Costs
As each plan is unique in the medications they cover, the costs will vary depending on the plan you choose. This is why working with an experienced medicare broker that represents all of the plans available can be so valuable. On one plan your prescription medication may cost $10/month whereas on another plan it could be $100/month.
Signing Up for Medicare Part D
To sign up for Medicare Part D, you must be enrolled in Original Medicare Part A or Part A/B. If enrolled in Medicare Part A only, you can sign up for a stand-alone Part D plan. If you are enrolled in Medicare Part A and B, you can elect either a Part C Medicare Advantage Plan with prescription drug coverage (MAPD) or a prescription drug plan (PDP). In most cases, Medicare beneficiaries cannot enroll in both a Medicare Advantage plan and a separate prescription drug plan.
Signing up for Medicare Part D is essential to ensuring you are adequately covered. Even if you are not currently taking prescription medications, signing up for coverage now will prevent you from encountering penalties down the road and provide peace of mind in your Medicare coverage.
There are many considerations when choosing the Part D medicare such as costs of the plan and your medications, coverage for your prescriptions and preferred pharmacy location, and the annual deductibles involved. Working with an experienced medicare broker, such as the team at Twin City Underwriters, can help you determine what is the right option for you and which plan is most suitable for your individual needs.
Choosing a Medicare plan can be difficult. Twin City Underwriters helps Medicare recipients in Minnesota, Wisconsin, North Dakota, South Dakota, Iowa and Florida find the Medicare plan that meets their unique needs. Attend an online Medicare webinar, in-person Medicare workshop, or schedule a one-on-one meeting with one of our Medicare insurance brokers to get your questions answered!
Do you need help with Medicare, insurance and health plans? Explore your options with Allina Health Aetna, BlueCross BlueShield of Minnesota, Medica, UCare, United HealthCare and more. We work with you to find the best plan for your needs and budget. Contact us today to get started.
