Medicare Part D Coverage, Costs & Benefits

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August 7, 2023 | Johanna Karlsson

Overview of Medicare Part D — Prescription Drug Coverage

If you know, you know: Medicare Part D can be a crucial way to make sure you’re getting the right healthcare coverage. But if you don’t know, you might be wondering what exactly it is, what it covers, how to enroll in it — and how much it costs. The Health Plus Life team is here to walk you through all of this and help you figure out if Medicare Part D coverage is something you should have.

Medicare Part D is available from private insurers as a way of adding prescription drug coverage to your benefits. This can be a big thing for people who have or anticipate facing potentially significant out-of-pocket costs for prescription medications that aren’t covered under Original Medicare, which includes Medicare Part A (hospital insurance) and Medicare Part B (medical insurance).

For many people who want to make sure their prescription drug coverage needs are met, a  Medicare Advantage Plan , also known as Medicare Part C, can be a good option from a private insurer because it will cover everything that Original Medicare would help pay for and often comes with additional benefits, such as vision and dental coverage or prescription drug coverage. However, others are still left with the possibility of high costs for the prescriptions they need if their Part C plan doesn’t cover it or if they only have Original Medicare. When this is the case, enrolling in a Medicare Part D plan can be a good solution.

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Medicare Part D Coverage Details – What’s Included?

Now that you know the basic goals of optional Medicare Part D coverage, you’ll likely be wondering what, exactly, it includes, and how it fits into your overall best health insurance strategy. Let’s break it down to explain what Medicare Part D typically covers:

  • Generic Drugs: These are FDA-approved drugs that have the same active ingredients as brand-name drugs but generally cost less.
  • Brand-Name Drugs: These include medications manufactured and sold by the pharmaceutical companies that developed them.
  • Specialty Drugs: Medications used to treat complex, chronic conditions like cancer, rheumatoid arthritis, or multiple sclerosis.
  • Vaccines: Some commercially available vaccines not covered by Medicare Part B may be covered under Part D.
  • Tiered Formularies: Many plans categorize drugs into different tiers, affecting your out-of-pocket costs. Lower tiers generally cover generic drugs, while higher tiers cover brand-name or specialty drugs.
  • Mail-Order Pharmacy Services: Some plans offer mail-order options for a reduced cost.
  • Pharmacy Network: Depending on your plan, you may have access to a network of pharmacies offering preferred pricing.


Understanding Costs Under Medicare D Coverage

Now that you understand what these plans typically cover, let’s go over the Medicare Part D coverage details and its cost. There are various costs associated with a Medicare Part D plan, such as premiums, deductibles, and co-payments, and these may vary depending on several factors. This is what you can expect if you choose to get coverage under Medicare Part D:

  • Premiums: Most Medicare Part D plans will have a monthly premium (and this is in addition to your Part B premium). If your income is above a certain threshold, you may also have to pay an Income-Related Monthly Adjustment Amount, or IRMAA, in addition to your plan’s monthly premium. Because premiums can vary widely, you’ll want to compare your options based on your specific prescription drug needs.
  • Deductibles: The amount you’ll have to pay out-of-pocket for your prescriptions before your plan begins to pay its share will vary from one plan to another. All Part D plans must comply with a maximum deductible that is set by Medicare, but some plans could have a lower deductible, or none at all. Again, this will vary from plan to plan, so you’ll want to make sure you’re comparing all of your options.
  • Co-payments and coinsurance: You’ll have a fixed cost to pay for covered prescriptions after meeting your deductible, though some plans instead charge a percentage of the drug’s cost rather than a fixed amount. Many plans also have a tiered system, with different rates of co-payments or coinsurance for different types of drugs.
  • The Donut Hole: This coverage gap can happen after you and your plan spend a certain amount, and you now have to pay more out-of-pocket — until hitting your plan’s out-of-pocket spending limit.


How to Enroll in Medicare Part D – A Step-by-Step Guide

If you’re thinking a prescription drug coverage plan would be a good idea for your health insurance needs, here’s what you need to do if you’re ready to get coverage under Medicare Part D:

  • Determine Your Eligibility: To enroll, you need to have Medicare Part A and/or B and live in the service area of a Medicare plan that offers prescription drug coverage. In some cases, such as certain disabilities, special eligibility rules apply.
  1. Understand Your Enrollment Periods: The Initial Enrollment Period, or IEP, is when you first become eligible for Medicare, or three months before the month you turn 65 and three months after. You also can enroll during the annual Open Enrollment Period (October 15 to December 7 every year). If you move, lose other insurance coverage, or meet the criteria of other specific situations, you may qualify for a Special Enrollment Period.
  2. Compare Plans: List the medications you take and look for plans that cover them, comparing costs like premiums, deductibles, co-payments, coinsurance, and coverage gaps. You’ll also want to make sure your preferred pharmacy is in the plan’s network.
  3. Enroll: You can enroll online through the Medicare Plan Finder or the plan’s website, or call 1-800-MEDICARE or the plan directly. You can also complete a paper enrollment form from your plan. Another helpful option is to work with Health Plus Life agents to get assistance with finding your available options and choosing the right plan.
  4. Confirmation: You should receive a confirmation letter from the plan, and if you have a premium, you’ll want to set up your payment method.
  5. Use Your Coverage: Carefully read your plan’s details and materials to understand your benefits, and start presenting your card when buying prescriptions.
  6. Get Help: If you need assistance, you can directly contact Medicare. A State Health Insurance Assistance Program (SHIP) may also be able to help with free, personalized counseling. And the Health Plus Life team is always available to get answers to any questions you have about enrolling.


Benefits of Medicare Part D – Beyond Drug Coverage

Figuring out the benefits of Medicare Part D plans can often go far beyond just prescription drug coverage. It could coordinate with other insurance plans and either supplement or replace the coverage, such as if you have existing drug coverage through an employer or union. If you’re eligible for both Medicare and Medicaid, Part D will work alongside Medicaid for your overall prescription drug benefits.

Medication Therapy Management Programs are another potential benefit, offering personalized, professional support to help beneficiaries use medications safely and effectively. This is available to people with multiple chronic conditions who take multiple high-cost drugs, and it can include comprehensive medication reviews, individualized action plans, and regular follow-ups.

There are so many Medicare Part D benefits, and every plan can vary. That’s why it’s important to work with a trusted advisor like the Health Plus Life team to go through your options and make sure you’re getting the right Medicare Part D coverage to meet your needs.

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Common Misconceptions and Pitfalls in Medicare Part D Coverage

With all of the ways that a Medicare Part D plan can vary, including its coverage gaps, deductibles, and the things it will help pay for, it’s no wonder that this prescription drug coverage option is sometimes misunderstood. Let’s clarify what is not covered and go over some other potential pitfalls that you can avoid.

    • Quantity Limits: Some medications may limit the number of doses covered per month.
    • Prior Authorization: Some prescriptions may require approval from the plan before they are covered.
    • Step Therapy: You may need to try one or more similar, lower-cost drugs before the plan will cover the prescribed drug.
    • Exclusions: Not all drugs are covered, such as weight loss or gain drugs, fertility drugs, and over-the-counter medications.
    • Late Enrollment Penalty: You might have to pay the penalty if you don’t sign up for a Part D plan when you’re first eligible and you don’t have other creditable prescription drug coverage.
    • Formulary Changes: Plans may change their formularies, so it’s vital to review the information annually.
    • Coverage Gap: Commonly referred to as the “donut hole,” this is a temporary limit on what the drug plan will cover.
  • Pharmacy Choice Matters: Your costs can vary depending on the pharmacy you use.
  • Generic: Opting for generic drugs instead of brand-new medications can often reduce your costs.
  • Help Might Be Available: If you have a limited income and resources, you may qualify for help from assistance programs, such as a low-income subsidy or a State Pharmaceutical Assistance Program (SPAP).

Understanding the costs associated with Medicare Part D coverage, including premiums, deductibles, copayments, and their variations, is crucial to be able to make an informed decision and get the right plan for your individual circumstances. The Health Plus Life team is here for you if you’d like to learn more about Medicare Part D benefits and go over the plans available to you. Give us a call and we’ll help you understand what is covered by Medicare Part D plans and how they can be a good option for many people as part of an overall Medicare coverage strategy.

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Frequently Asked Questions About Medicare Part D Coverage:


What types of prescription drugs are covered under Medicare Part D?

Each Medicare Part D plan comes with a formulary or list of covered drugs. While the formulary can differ from plan to plan, there are certain types of drugs that all Part D plans must cover, including antidepressants, antipsychotics, HIV/AIDS drugs, cancer drugs, and immunosuppressants. It’s always important to review the formulary of any Part D plan you’re considering.

How do I enroll in Medicare Part D?

Enrolling in Medicare Part D involves choosing a plan that suits your needs and then signing up during one of the designated Medicare enrollment periods. You can enroll through the plan’s sponsor, on the Medicare website, or by calling Medicare at 1-800-MEDICARE (1-800-633-4227).

Can I change my plan if I’m unhappy with the Medicare Part D coverage?

Yes, you can change your Part D plan during the Annual Enrollment Period (AEP) which runs from October 15 to December 7 each year. This is the time when you can switch from one Part D plan to another or even drop your Part D coverage altogether.

How much does Medicare Part D cost, and what factors affect the price?

The cost of a Part D plan can vary widely based on several factors, including the plan’s premium, deductible, and copayments or coinsurance for the drugs you take. Your income level can also affect what you pay for Medicare Part D coverage.

Is over-the-counter medication covered by Medicare Part D?

No, over-the-counter (OTC) medications are typically not covered under Medicare Part D. Part D focuses on prescription medications.

Can I have both Medicare Part D and private prescription drug insurance?

Typically, if you have Medicare Part D, you cannot also have other private prescription drug coverage. However, if you have drug coverage through an employer or union, you may be able to keep that coverage along with Part D.

What happens if a drug I need isn’t covered under my Medicare Part D plan?

If a necessary drug isn’t covered under your Part D plan, you or your prescriber can request a formulary exception. This is a request to the plan to cover the medication despite it not being on their formulary.

How do I find a pharmacy that accepts Medicare Part D?

Most pharmacies in the United States accept Medicare Part D. To find a pharmacy, you can use the plan’s pharmacy locator tool or call the plan’s customer service line. Some Part D plans also offer a mail-order pharmacy service.

Johanna Karlsson
Johanna Karlsson is a veteran health and life insurance professional licensed in 50 states. She relocated from the countryside in the south of Sweden and has not looked back. After coming to the United States to attend university, she gained her degree in Public Relations. She brought her public relations skills to a local international health insurance where she discovered a new passion in insurance. After years with that company, Johanna now joins HealthPlusLife to help build a team of licensed insurance agents ready to meet your insurance needs.