Medicare Part D Coverage
There are two main ways for purchasing prescription drug coverage:
- Medicare Part D: this is a stand-alone plan provided by the overall Medicare federal program
- Medicare Advantage (Part C): most Medicare Advantage plans include part D in their coverage
All Part D plans have a drug formulary list that shows the medications they’re covering. Drugs are usually divided into tiers. All plans must cover determined categories of medications but specific drug prescriptions in each category can vary from plan to plan. However, If some prescription drug isn’t covered under your drug plan and your doctor thinks is necessary for you to have it you can ask for it to be entered into your plan.
The formularies vary from plan to plan, so you should request a copy. But each plan has to cover all drugs in these categories:
- Antidepressants
- HIV/AIDS treatment
- Immunosuppressants
- Antipsychotic medications
- Anticonvulsive treatments for seizure disorders
- Anticancer drugs (unless they are being covered under Part B)
Also, Part D covers most vaccines unless they are already covered under Part B.
For more information about Medicare Part D coverage, look here.
Part D Cost
Monthly premiums and copayments for Part D vary from plan to plan.
However, as previously mentioned, every plan has a formulary that records the different drugs that are covered. The cheapest plan is not always the best plan. Talk with a Medicare agent like Ron Ray who will verify that the plan you want will cover 100% of your drugs.
If you have a low income or think you could have trouble paying Medicare premiums, you can check for helpful options in our blog about Medicare Savings Program.
Basically, the costs of Medicare Part D are subject to change each calendar year, but monthly premiums will cost you approximately 43$ in 2023. Your costs can depend on the IRMAA or Income Related Monthly Adjustment Amount which is an extra cost if your income falls under a certain point. This cost is detached from your Part D monthly premium and you pay it directly to Medicare (not to your Medicare Part D Plan). The amount is based on your tax income returns from 2 years ago.
Except for the monthly premiums, you will be responsible for deductibles, copayments, coinsurance, and coverage gaps (also known as donut holes).
A yearly deductible: an out-of-pocket cost that you are responsible for each year before your Medicare-covered plan starts to cover all costs. Deductibles are set by the government and are subject to change each calendar year.
Copayments or coinsurance: the amount you are responsible for after your deductible has been met. Coinsurance stands for the percentage of what you need to pay and copayment is a fixed cost. For example, you will pay 10$ in copayment or you may owe 20% of coinsurance for drug prescriptions after your plan is covered for its share.
A coverage gap phase or donut hole: temporary increase in your out-of-pocket costs and it can kick in after you and your policyholder spend certain amounts on prescription drugs and other following costs. Once that amount is reached, you must cover at least a portion of your medications out of pocket. The out-of-pocket limit is a term used to describe the maximum amount that can be paid out of pocket during a given year under most plans. When you surpass that amount, your coverage resumes. As a result, the term “donut hole” was conceptualized. The donut hole has been closing year after year underneath the Affordable Care Act (ACA), but it isn’t entirely gone. When you reach the amount of 4660$ in 2023 you enter in coverage gap which means you need to pay 25% of prescription-covered medications. This phase lasts until you reach the out-of-pocket limit which is 7050$, then you enter into catastrophic coverage.
Catastrophic phase coverage: it begins once you surpass the TROOP limit and your drug plan covers all your costs. During this phase, you’ll be responsible for 5% of out-of-pocket costs.
Part D Extra Help
Extra Help is designed as an aid for Medicare Part D insurance plans. If you have a low income and are not able to cover limits that are set yearly, you become suitable for Medicare Part D Extra Help. If you are enrolled in a state insurance program like Medicaid which is designed to help those with lower income status, you are immediately eligible for Extra Help. The benefits help with monthly premiums reduction and lower copayments and coinsurance on medications. How high your level of Extra Help will depend on how much you need it.