A Look Into the Medicare Prescription Part D Drug Plan
As the new millennium arrived, so too did the introduction of the Medicare Part D by President Clinton. Also known as the Medicare Prescription Drug Benefit Program, the program provides prescription drug coverage to eligible participants.
Up until the implementation of Medicare Part D in 2006, Medicare did not cover the cost of self-administered prescription drugs. Since the gap in coverage was closed, Medicare Part D now has nearly 44 million enrollees. By taking a closer look, you can become better prepared for the next open enrollment period.
What Is Medicare Part D?
Medicare Part D is a federal government program obtained through the private insurance marketplace. As an optional program, participants may elect to pay insurance premiums in exchange for self-administered prescription drugs.
Self-administered drugs includes those prescribed by a physician on an outpatient basis. Such drugs are commonly purchased at local pharmacies and administered within the home. Medicare Part D does not include professionally administered drugs which are covered under Medicare Part B.
How Do You Purchase a Medicare Part D Plan?
Eligibility must first be met before Medicare Part D may be purchased. Eligibility is granted once an individual has purchased Medicare Part A or B, or both. Once enrolled, there are two ways to purchase a Medicare Part D plan.
The first purchasing method is by joining a stand-alone prescription drug plan, or PDP. The second, and slightly less popular option is by joining a public Part C health plan, also known as a Medicare Advantage Plan. A Part C health plan not only includes the same benefits as Medicare Part D, but also covers all hospital and medical services covered under Part A and B.
What Does Medicare Part D Cover?
Only self-administered prescription drugs are covered under Medicare Part D. Drugs include those patients pick-up and administer on their own, including a few self-injectable medicines.
Drugs administered under the care of a physician are covered under Medicare Part B. While most drugs are indeed covered under Medicare Part B and D, it is important to take note of which prescription drugs may not be covered at all. The following medications may not be covered under a Medicare plan:
- Over-the-counter medications
- Fertility promotion medications
- Weight loss or gain medications
- Erectile dysfunction (ED) medications
- Drugs to treat symptomatic relief of cough or colds
- Drugs used for hair growth or other cosmetic purposes
- Prescription vitamins and minerals, except for prenatal
- Drugs from manufacturers requiring a condition of sale
The above medications, while not covered under basic Medicare Part B or D, may be available as a supplemental benefit in some plans. Supplemental benefits are not a part of Medicare. As such, plans including supplemental benefits will have higher associated premium costs.
Are Brand Name Drugs Covered?
Certain brand name medications may be included in your Medicare Part D plan if not available in generic form. If a generic equivalent exists, the brand name variation would be excluded from coverage. However, many plans do offer the ability to include brand name prescription drugs. In doing so, participants in plans including brand name drugs will be charged a higher premium and incur higher co-pays.
What Does It Cost?
With any insurance plan, determining the total cost requires examining all potential outlays necessary to receive benefits. For Medicare Part D plans, the costs can be broken down into four categories:
- Premium– The monthly premium varies widely from one plan to the next. Very basic plans may have no monthly premium associated with them. Richer plans, on the other hand, can become extremely expensive. On average, however, it is estimated the average monthly premium in 2018 will be about $33.
- Copays and Coinsurance – Most plans include a cost-sharing mechanism where beneficiaries may pay either a flat fee or fixed percentage of the prescription cost.
- Deductibles– Insurers may not impose an annual deductible greater than $405 (2018). However, for an additional premium, lower deductibles are made available by most companies.
- The Coverage Gap – Also known as the “donut hole”, beneficiaries who spend $3,750 within the year will be required to pay 44% of generic drugs and 35% of brand name drugs.
- $5k Cap – Once a participant has incurred $5,000 in total costs, no more than 5% will be paid for any additional prescriptions for the remainder of the year.
Consider each component above when determining the total cost of Medicare Part D and your out-of-pocket expenses
What if Medicare Part D Is Too Expensive?
If you are unable to afford a Medicare Part D plan, there may be some help:
- Medicare Extra Help – Programs which can pay for some or all prescription costs, are available for low-income individuals at www.medicare.gov.
- State Assistance – Individuals who do not qualify for the Extra Help program may be eligible for a state-sponsored assistance program.
- Drug Manufacturers – Some drug companies offer direct-to-consumer assistance programs. Contact you prescription manufacturer to learn more.
In addition to those listed above, check within your local community. From charitable organizations to local governments, there are new programs opening up on a regular basis.
How Do I Choose a Plan?
Open enrollment begins October 15thand closes on December 7th. Choosing a plan that is right for you requires a little estimating. We can help you review your prescription costs from the prior year and compare them to the various plans available.
If prescription use is low, higher deductible and co-pay plans may be more cost-effective in the long run. However, if you have or expect high prescription costs, higher premiums may be offset by the reduced out-of-pocket cost.
What if I Miss The Enrollment Period?
Although the enrollment window closes on December 7th, most Medicare beneficiaries who do not enroll in time are still able to do so. If coverage wasn’t provided through another creditable program, such as an employer or the Veterans Administration, individuals may enroll after the enrollment period. However, the monthly premium will be subjected to a premium penalty.
Medicare Part D continues to provide millions of Americans with a cost-effective way to pay for self-administered prescription medications. Becoming informed about the coverage options available to you before the enrollment period will help in participating in a plan just right for you and your pocketbook.
Featured Blogs
- Aging and Our Body’s Ability to Heal Itself
- What is Credit Health Insurance?
- Keeping Health Insurance After a Layoff
- Waking Up to the Impact of Insomnia
- How Life Insurance Benefits Women
- Electric Car: To Buy or to Lease?
- What experts say about raising the retirement age
- Coverage for healthcare treatment denied? Here’s what you can do.
- How are the proceeds of a life settlement taxed?
- Sharing the Road with Cyclists
- Buying Life Insurance for an Elderly Parent?
- What Every Renter Needs to Know about Renters Insurance
- Medicaid Unwinding: Your Questions Answered
- Does Uber Insurance Cover Passengers?
- Living Your Best Life After 60
- Weird Things Covered by Home Insurance
- Buying Health Insurance: A Millennial’s Guide
- Self-Love Ideas for Valentine’s Day
- Life Without Clutter
- Set Yourself Up for Success with Your Fitness Routine
- When to Upgrade Your Auto Insurance
- Winter Hydration – Do I Need It?
- What Does My Home Insurance Policy Cover?
- I’m 60+; Do I Need Life Insurance?
- Why Do I Keep Breaking My New Year’s Resolutions?
- Closing Out the Year with a Smile!
- How to Enjoy a Long Layover
- Are You Paying Too Much for Auto Insurance?
- 6 Cold Weather Safety Tips
- 10 Tips for Managing Cholesterol Levels
- How Social Security Cost-of-Living Adjustments Affect Your Taxes
- How Much Life Insurance Do You Need Right Now?
- 3 Top Tips for Better Posture
- Fun Part-Time Jobs for Retirees
- Building Bone Density for Seniors
- Living Outside Your Comfort Zone in Retirement
- 16 Tips for Keeping Your Home Secure While You’re Away
- 3 Top Habits that Lead to a Happy Life After Retirement
- Should You Insure Your Gifts?
- Everything You Need to Know When Retiring Under 65
- The Most Important Fall Home Maintenance Tasks
- 7 Benefits of Slow Travel
- Do you need $1M to retire?
- Utilizing Medicare Preventative Services
- The Harsh Reality of Credit Card Fees
- Keeping Your Health Insurance Affordable
- How to Retire Early
- 7 Tips to Weather Challenging Periods in Your Life
- What is a Variable Annuity? 4 Key Details You Should Know
- Financial Planning After Saying “I Do!” – 3 Crucial Steps
- 4 of the Best Ways to Stay Healthy this Summer
- 4 Boat Safety Precautions to Take this Summer
- How to Prevent Sun Damage to Your Eyes
- 3 Tips for Safer Grilling
- Rental Car Road Trip? Consider Buying This Coverage
- When the Sun is NOT Your Friend (What You Need to Know about Sun Exposure)
- Tips to Avoid Stress Eating
- Lifestyle Changes in Retirement that Will Impact Your Finances
- Common Exercise Pains – How to Work Past Them and When to Call for Help
- Signs Your Identity Has Been Stolen (and what to do about it)
- Are Annuities a Good Investment?
- How Does Inflation Affect Life Insurance?
- Know the Benefits of Walking
- Do Brain Food Supplements Really Work?
- Using Life Insurance in Estate Planning
- Ways You Can Spend Less on Gas
- Is Your Retirement Income Keeping Pace with Inflation?
- What Are Alternatives if LTC isn’t Right for You?
- 4 Tips for a Less Stressful Summer
- 6 Factors Impacting Homeowners Insurance Costs
- Veteran and Medicare Benefits Work Together
- What are the Safest States From Natural Disasters?
- How to Protect Your Home from Wildfires
- How to Choose an In-Home Care Provider for Your Loved One in 5 Steps
- 7 Myths About Your Back Pain
- How to Prepare for Retirement Considering Inflation
- 5 Foods that Will Help Keep Your Mind Healthy
- Don’t Throw Away Those Used Coffee Grounds
- I’m 50 Years Old. Should I Keep My Life Insurance?
- Are Personal Items Covered by My Auto Insurance Policy?
- How to Spot Government Imposters
- 5 Mistakes to Avoid When Buying a Life Insurance Policy
- Do I Really Need Condominium Insurance?
- Happiness Through Healthy Food
- 5 Step Checklist to Choosing a Health Insurance Plan
- The Cost of Home Ownership
- 5 Creative Spring Décor Ideas
- 10 Ways to Maintain Healthy Joints
- Death and Taxes (and Insurance?)
- 3 Incredible Healthcare Smart Technologies Coming Your Way
- Do I Need a Long-Term Care Plan?
- Aging In Place – What You’ll Need
- Senior Diet: To Meat or Not to Meat
- What Is Road Trip Insurance?
- How to Take Care of Your Personal Intangible Assets
- Dream All-Inclusive Trips to Escape the Cold
- Choosing the Right Homeowners Insurance
- How to Get Health Insurance if You’re a Freelancer
- Safety Tips for Driving in Winter
- What to do if Your Travels Get Delayed Due to Weather or Flight Cancellations
- Ways to Locate a Lost Life Insurance Policy
- Critical Times in Life that You Need Life Insurance
- Is Working from Home Covered by Homeowners Insurance?
- Giving and Forgiving
- Overlooked Products to Consider When Planning for Retirement
- Why Buy Life Insurance on Children
- Things We Are Grateful for This Year
- What to Avoid When Switching to Medicare from the Public Health Exchange
- Maintenance Checklist for the Year-End
- How to Host a Successful Virtual Holiday Party
- Is One of These Factors Keeping You from Seeking Life Insurance?
- Is Pet Insurance Worth It?
- Ben Franklin: Father of Modern Insurance
- Who Invented Insurance Anyway?
- Common Senior Micronutrient Deficiencies
- Stacked vs Non-Stacked Uninsured Motorist Coverage
- The Art of Aging Well
- Insure What? Celebrity Body Parts Insured
- Using HSAs in Your Retirement Planning
- 6 Strange Insurance Policies You Can Buy
- How Much Do Millennials Actually Need to Retire Comfortably?
- How Valuable Is Cash Value Life Insurance?
- Mistakes You Can Make When Exercising at Home
- Why You Should Never Lie to the Underwriter
- Baby On Board! 9 Tips for Carrying Precious Cargo
- Forget Salad Recipes, Try a Salad “Matrix”
- Mortgages Dissected: Details to Know
- Will My Life Insurance Policy Cover Me If Something Happens While Traveling?
- 5 Most Common Estate Planning Mistakes
- I’ve Been Denied a Life Insurance Policy. Now What?
- Bucket List Ideas and Why It’s Important
- Insurance Coverage All Small Business Owners Must Consider
- Getting Fit Before the Medical Exam
- The Basics of Insurance APIs
- Don’t Lose Non-Refundable Down Payments with Travel Insurance
- 8 Gas Savings Tips During Summer
- It’s time for your end-of-the-year insurance review
- Wishing You a Happy Holiday Season And Healthy New Year
- Do You Know What These Key Insurance Terms Mean?
- Dates and deadlines for 2019 Individual Health Insurance Coverage
- It’s Medicare Open Enrollment
- It’s Medicare Open Enrollment Period – Let Us Help You Get Ready
- Answer These Questions to Help You Make the Best Medicare Coverage Choices