This month we conclude our four part series on the four main parts of Medicare. Each section will focus on one alphabet part to help clear up the coverage, eligibility, cost, and enrollment for that particular area. This week, we’ll finish up with taking a closer look at Medicare Part D.
What is Part D?
Medicare Part D, also known as a Prescription Drug Plan, or PDP, provides help with the cost of prescription drugs. This can be provided through private insurance companies or select Medicare Advantage Plans that includes drug coverage.
Medicare Part D plans are offered by private insurance companies, which mean they can vary greatly in coverage. All Part D plans will provide some type of coverage for prescription drugs, but the extent of coverage, requirements, restrictions, and drug coverage varies.
The federal government has set guidelines to ensure that certain drugs are covered under all Medicare Part D plans. However, before selecting a Part D plan, it is important to know what prescriptions you take, and which ones you may need in the future in order to ensure that the plan you choose covers the prescriptions you use.
Coverage may also vary by location, some plans will only cover specific pharmacies, and others will only cover you in certain areas. For those who travel regularly, it is important to find a plan that will provide coverage regardless of pharmacy location.
All Medicare recipients are eligible for Medicare Part D. If you are entitled to Medicare Part A or are enrolled in Medicare Part B, you cannot be turned down for a Medicare Part D plan during your initial enrollment period. As soon as you become eligible for Medicare, you can join Part D. Typically; eligibility is determined by age for those 65 or older, or individuals who have other qualifying conditions.
The cost of Medicare Part D varies from one plan to another because it is offered through a variety of private companies. It is important to shop around for Part D coverage because costs can vary greatly, even for the same coverage.
Different plans for Part D coverage have varying costs, but all have an out-of-pocket maximum limit. A typical plan may include coverage once members have spent their out-of-pocket maximum, such as a payment of 93% of the cost of generic drugs and about 50% of the cost for most brand name drugs.
It is best to sign up for a Part D plan as soon as you become eligible. In some circumstances, members may be charged a penalty or face higher premiums if they sign up after their initial eligibility. If necessary, you can make changes to your plan in the fall when providers announce upcoming changes during the Annual Election Period (AEP). Few exceptions allow enrollments outside of an enrollment period, but it is important to enroll as soon as possible to avoid potential penalty fees.