Medicare Part D also known as Medicare Prescription Drug benefit is an optional federal-government program administered through private insurance companies to provide affordable prescription drug coverage to Medicare beneficiaries. This program was originally proposed by President George W. Bush and enacted as part of the Medicare Modernization Act of 2003 and implemented in January 2006.
Prescription Drugs covered by Medicare Part D
Medicare Part D plans must cover therapeutic class prescription drugs and all drugs that fall under six categories: antidepressants, antipsychotics, anticonvulsants, immunosuppressants, antiretrovirals (AIDS treatment) and anticancer.
However, Medicare Part D plans vary from one plan to another. Each plan has its own list of formulary (list of covered drugs) so better check on the formulary first before signing up on Medicare Part D plan to make sure that medications you take is covered.
Many Medicare Part D plans also place prescription drugs or medications into different levels or tiers. Specific drugs are listed in each tier and co-payment depends on which tier that drug is under.
Here’s an example showing drug tiers:
Tier 1 — lowest co-payment, most generic drugs are under this tier
Tier 2 — cost more than tier 1 drugs, preferred and brand-name drugs
Tier 3 — higher co-payment than tier 1 and 2, non-preferred, brand-name drugs
Tier 4 — highest co-payment, very high cost drugs or specialty drugs
Generally, if the prescription drug you are taking is in lower tier, that means you will be paying less in co-payment.
Tip: To save cost on your prescription drugs, you may ask your provider for generic or less expensive medication available that you could take.
How to qualify for Medicare Part D?
To qualify for Medicare Part D, you must be enrolled in Medicare Part A (Hospital Insurance) and/or Part B (Medical Insurance) and live in the service area that provides Part D coverage.
Medicare beneficiaries gets Part D prescription drug coverage through two types of plans administered by private insurance companies:
Medicare Prescription Drug Plan (Part D). All Medicare beneficiaries can join standalone Prescription Drug Plan (PDP). These plans add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
Medicare Advantage Plan (Part C). Only Medicare beneficiaries with both Medicare Part A and Part B can join a Medicare Advantage Plans with prescription drug coverage also referred as MA-PD. If you enroll in this plan, your Medicare Part A (Hospital Insurance), Part B (Medical Insurance) and Part D (Prescription Drug) will be covered plus additional benefits.
Cost of Medicare Part D
Medicare Part D plans have monthly premium that you need to pay in addition to Medicare Part B (Medical Insurance). Premium is fixed for each plan but if your income is above a certain limit, you may need to pay more. Please see chart below that shows yearly income and income-related monthly adjustment in addition to Medicare Part D monthly premium:
* chart source: medicare.gov
Medicare Part D Enrollment Periods
Can I add Medicare Part D anytime? How do I change Medicare Part D plans? These are common questions most Medicare beneficiaries ask and here’s the specific time to enroll or change plans:
Initial Enrollment Period (IEP).
You can enroll on Medicare Part D when you’re first eligible. For most Medicare beneficiaries, the IEP is the same time as the IEP for Medicare Part B – this begins three months before you turn 65, includes the month you turn 65 and three months after that.
If you enroll in Medicare Part D during IEP, your coverage will start the first day of the following month that you apply for the plan. If you enroll 3 months prior to turning 65, your Medicare Part D coverage will begin on the first day of the month you turn 65.
Annual Election Period (AEP)
October 15th to December 7th . If you missed your Initial Enrollment Period, you can enroll, change or switch plans during Annual Election Period (AEP).
Special Election Period.
To qualify for Special Enrollment Period (SEP), Medicare beneficiary needs to meet special situations or qualifying events to enroll, change or switch plans. Some qualifying events include: moving to a different location or institution, losing creditable prescription drug coverage, plan ends contract with Medicare, and qualifying for Extra Help.
What happens if I don’t sign up for Medicare Part D?
If you don’t sign up for Medicare Part D when you are first eligible, you’ll have to pay for late enrollment penalty. Late enrollment penalty is an amount added to your Medicare Part D monthly premium. You may need to pay a late enrollment penalty if you don’t sign up on any Medicare Part D plan, Medicare Advantage plan with prescription drug coverage or other creditable prescription drug coverage for more than 63 consecutive days after your Initial Enrollment Period.
Late Enrollment penalty cost depends on how long you did not sign up for Medicare Part D or creditable prescription drug coverage. Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.19 in 2019) times the number of full, uncovered months you didn’t have Medicare Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
Need to enroll in Medicare Part D in Washington?
To enroll on Medicare Part D plan or Medicare Advantage plan with prescription drug coverage, you can apply directly through an insurance company. Or much better call licensed insurance agency like Health Plans in Washington so you can compare different plans that best fit your needs and budget. Call us at 360-878-1048.