Medicare - Part D

Medicare Part D, also called Medicare Prescription Drug Coverage, is a program that helps cover the cost of prescription drugs used at home.  This option is available to everyone with Medicare.  You must enroll in a Medicare Part D plan in order to receive the prescription drug benefit.  Medicare drug programs are available from a wide variety of insurance companies or other private companies approved by Medicare.  Plans can vary in the drugs that they cover and the costs. 

The decisions you make about the prescription drug plan you choose, if any, are going to be very specific to you and your needs.  If you decide not to join a Medicare drug plan when you are first eligible, and you don’t have other creditable prescription drug coverage, you will likely pay a late enrollment penalty should you decide to join at a later date. 

You can join, switch, or drop a Medicare Part D drug plan between October 15 and December 7 in 2011. Coverage begins on January 1, 2012, as long as your plan gets your enrollment request by December 7.

A late enrollment penalty is added to your Part D premium if you did not join a Medicare drug plan when you were first eligible for Medicare and you did not have other creditable prescription drug coverage; or if you did not have Medicare prescription drug coverage or other creditable prescription drug coverage for 63 days or more in a row.  (Note that those who qualify for Extra Help do not pay late enrollment penalty.)  If you don’t agree with your penalty, you may be able to ask Medicare for a review or reconsideration.  You will need to fill out a reconsideration request form, available from your Medicare drug plan, to provide proof that supports your case such as information about previous drug coverage. 

Medicare Part D Plans

You can find Medicare drug coverage options in your area by using the Medicare Plan Finder tool at http://medicare.gov. Or call 1-800-MEDICARE or 1-800-633-4227 to get personalized assistance.  You will need your Medicare number ready.  Also, you can contact your local Senior Health Insurance Assistance Program (SHIP) office to speak with trained staff and volunteer counselors.  These offices provide confidential in-person and telephone assistance, free of charge.  It is a good idea to have a list of your prescriptions when you speak with a counselor. 

What are the costs?

Like any other prescription drug plan, there is a monthly premium, a yearly deductible and co-payments for part of the cost of prescriptions. Actual drug plan costs will vary depending on the prescriptions you use, the plan you choose, whether the pharmacy you use is in the plan’s network, whether your drugs are on your plan’s formulary (drug list), and whether you get Extra Help paying your Part D costs. 

NEW—Starting January 1, 2011, what you pay for Part D coverage could be higher based on your income. This new rule applies to Part D coverage you get from a Medicare Prescription Drug Plan, or from a Medicare Advantage Plan or Medicare Cost Plan that includes Medicare prescription drug coverage. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS) is above $85,000 (and you file an individual tax return) or $170,000 (and you file a joint tax return), you will pay an income-related monthly adjustment amount in addition to your Part D plan premium. 

Paying for Prescription Drug Costs

Many people qualify for Extra Help paying their Medicare prescription drug costs but don’t know it.  Extra Help and other programs (like Medicare Savings Programs) may help make your health care and prescription drug costs more affordable.

Coverage Gap 

Most Medicare drug plans have a “coverage gap” (also known as the “donut hole”). This means that after you and your Medicare drug plan have spent a certain amount of money for your covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. You must also continue to pay the plan’s monthly premium even while you are in the coverage gap. Not everyone will reach the coverage gap.

NEW -  The Affordable Care Act makes many improvements to Medicare. If you have Medicare prescription drug coverage with a coverage gap, the new law will reduce that gap over several years to make prescription drugs even more affordable. Under a new program that starts in 2011, if you reach the coverage gap in a year, you will get a 50% discount on covered brand-name prescription drugs at the time you buy them until you reach “catastrophic coverage” for that year. Also starting in 2011, the amount you pay in cost sharing during the coverage gap will decrease each year until the coverage gap is closed.

Catastrophic Coverage

Once you reach your plan’s out-of-pocket limit (no more than $4,550 in out-of-pocket drug costs during 2011), you automatically get “catastrophic coverage.” Catastrophic coverage ensures that once you have spent up to your plan’s out-of-pocket limit for covered drugs, you only pay a small coinsurance amount or copayment for the drug for the rest of the year.