Medicare Part D Prescription Drug Plans
Medicare Prescription Drug Plans (''Part D'' plans) provide some insurance coverage for brand name and generic prescription drugs. Medicare works with insurers and other private companies to offer many different plans. Compare the ones that are available in your area using the Medicare Prescription Drug Plan Finder.
The Medicare prescription drug benefit isn't perfect, by any means. But it is helping millions of people pay for medication. So, you should understand how to take advantage of it.
To get a Medicare Prescription Drug Plan, you must already have Medicare Part A and/or B.
Once you've chosen the plan that best fits your needs, call the specific plan to find out how to enroll. You will probably receive a form in the mail that you can fill out and return. You can also enroll online.
Medicare Prescription Drug Plans differ in their costs, the drugs they cover, and the pharmacies they work with. But here's how a basic plan would work:
- Each month, you pay a monthly fee -- or premium -- for your Part D prescription drug plan. The premium varies from plan to plan, but the federal government estimates the base premium in 2013 at $31.17. You have to keep paying the Medicare Part B premium, which covers doctor visits, as well.
- In addition to the monthly Part D premium, wealthier recipients (households with income exceeding $170,000 or individuals with income greater than $85,000) will pay between $11.60 and $66.60 more per month -- about the same as 2012.
- You may also pay a yearly deductible. The yearly deductible is the amount you pay for your prescriptions before the plan begins to pay. Some plans charge no deductible. The standard deductible in 2013 is $325, although it varies depending on your plan. After you have paid the deductible out of your own pocket, your Medicare Prescription Drug Plan kicks in.
- Then, when you buy medications, you pay part of the costs, and your plan covers the rest of the costs. Your share may be a flat fee, called a co-pay, or a percentage of the cost of the drug, called co-insurance.
- In many plans, there is a coverage gap after you reach a spending limit. This is the "doughnut hole." After the total cost of your drugs (what you and your insurer paid combined) reaches a certain level -- $2,970 in 2013 -- Medicare stops paying. You have to start paying your drug costs on your own, although in 2013, you pay 47.5% of costs of covered brand-name drugs, and 79% of the cost of covered generic drugs.
- Once the amount you have spent on drugs during the whole year gets high enough -- in 2013, the limit is $4,750 -- Medicare starts paying again. When this "catastrophic coverage" kicks in, Medicare pays about 95% of all your prescription drug costs for the rest of the year.