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Medicare Prescription Drug (Part D)
What are Medicare Prescription Drug Plans (Part D)?
Medicare Prescription Drug Plans (also called Medicare Part D) cover a wide range of prescription drugs. Each plan has a list of covered drugs called a "formulary." Many formularies break out their covered drugs into different "tiers." Each tier has different costs.
A plan's tier breakdown may look like this (note: your plan may be different):
Tier 1 (Lowest copayment) - generic prescription drugs
Tier 2 (Medium copayment) - preferred/brand-name prescription drugs
Tier 3 (Higher copayment) - non-referred/brand-name prescription drugs
Tier 4 (Specialty/Highest copayment) - very high cost drugs
In certain special circumstances, your prescribing provider can ask your plan for an exception to obtain a lower coinsurance or copayment if you take a drug in a higher tier.
It is important to note that plans can change or update their formularies at any time.
How do Part D plans work?
Medicare Part D plans provide coverage in four tiered stages.
How do Part D plans work?
Stage I: Deductible
Stage I
Deductible
Before your Part D plan covers your costs, you must first meet your deductible. The annual deductible for 2022 is $480.
Stage II
Initial Coverage
After you meet your deductible, your Part D plan will help pay your prescription drug costs. Copayment and coinsurance amounts vary by plan. Your out-of-pocket expanses are limited to 25% of the cost of brand-name and generic drugs. For most plans, when you have spent a total of $4,430 in total drug costs, you enter stage III (the coverage gap, also called the 'donut hole'.
Stage III
Coverage Gap
In this stage, you pay 25% coinsurance for generic and brand-name prescription drugs (based off of their non-discounted cost). Once you have spent more than $7,050 in out-of-pocket drug costs, you enter stage IV (catastrophic coverage).
Stage IV
Catastrophic Coverage
In this stage, you pay the greater amount of either 1) 5% of the prescription dru cost, or 2) the fixed amount $9.20 for brand name and $3.70 for generic drugs
For example, if your brand name drug costs $100, you would pay $9.20 since this is more than 5% (5% x $100 = $5 which is less than $9.20).
Alternatively, if your brand name drug costs $300, you would pay 5% or $15 because this is greater than $9.20 (5% x $300 = $15).
How do I enroll?
To enroll in a Medicare Prescription Drug (Part D) plan:
Enroll in Medicare Part A and B
We recommend enrolling in a Medicare Part D plan when you are first eligible to avoid late enrollment penalties. There may be certain circumstances if you have creditable drug coverage where you can postpone enrolling in a Part D plan and avoid late enrollment penalties.
Important: If you are in a Medicare Advantage HMO or PPO and join a separate Medicare Part D drug plan, you will be disenrolled from your Medicare Advantage plan.
To find a Medicare Prescription Drug (Part D) plan that meets your needs, please contact us for a free consultation with a licensed agent at
(813) 761-3457.
Late Enrollment Penalties
Medicare Prescription Drug plan (Part D) late enrollment penalties accumulate at 1% per month. For example, a 6 month late enrollment would equal a 6% late penalty. This is not a one-time penalty. You will pay this penalty amount every month while you are enrolled in a Part D plan.
Medicare.gov calculates your penalty as: Multiply 1% of the “national base beneficiary premium” ($33.67 in 2022) times the number of full, uncovered months you didn’t have Part D or credible coverage.
If you are interested in enrolling in a Medicare Part D plan, we strongly recommend you select a plan when first eligible. We have a wide range of plans and options including inexpensive ones. Our licensed agents can provide a free, comprehensive consultation to review your options.
Interested in a Medicare Prescription Drug (Part D) plan?
Contact us to get a customized quote today!
(813) 761-3457
Robin@ZelinskyInsuranceGroup.com
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