Medicare Part D is your prescription drug coverage. This coverage helps pay the cost of prescription drugs. You are eligible to enroll in Part D if you have Original Medicare (Medicare Parts A and/or B). There are many different Part D plans. Each plan covers its own unique list of drugs. These lists are subject to change at any time.
Part D is completely optional. It an elective form of Medicare coverage, meaning you are not required to enroll. Many healthy Medicare beneficiaries often wonder if they need to purchase this plan since they may not take any prescription medications.
We recommend that you enroll in the lowest cost Medicare Part D plan even if you’re perfectly healthy. This is because in the future, you might need to take prescription drugs for one reason or another. If you don’t enroll when you first become eligible and enroll later when you need the plan, you might be subject to a Part D penalty.
When to Enroll in a Medicare Part D Plan
When you enroll in Original Medicare, you will enter an Initial Enrollment Period. This period lasts for 7 months and encompasses three months before you turn 65, the month you turn 65, and three months after you turn 65.
If you do not enroll during your Initial Enrollment Period, you can enroll in Part D during Annual Election Period. This period starts on October 15 and lasts until December 7 each year.
How to Enroll in a Medicare Part D Plan
To enroll in a Medicare Part D Plan, you can use the online Medicare Plan Finder. All you need to do is enter the medications that you’re taking. The page will generate a list of the most affordable drug plans based on the medications you take.
You can use this generated list to determine which plan is the best for you and your situations. This tool is great because it allows you to compare rates side by side before you decide on a plan.
Medicare Part D 2018 Costs
While Medicare Part D Plans generally have one cost for a premium, these plans have four phases of coverage.
Phase 1: Annual Deductible: Before your Part D plan begins to pay its share in drug costs, you must meet the Part D annual deductible. Before you meet this deductible, you must pay for the full cost of your drugs. Each plan has a different deductible, and some plans might not have a deductible. Part D deductibles will be no more than $405 in 2018.
Phase 2: Initial Coverage: Once you meet the Part D deductible, you will enter the initial coverage phase. During this phase, you and Medicare Part D share the cost of your prescription drugs. You will pay 25% of your drug costs in the form of copayments or coinsurance until you reach the 2018 initial coverage limit of $3,750. After you hit this limit of $3,750, you will hit the Medicare Part D “Donut Hole.”
Phase 3: Secondary Coverage (Donut Hole): While in the Part D “Donut Hole,” your drug plan will stop paying for your prescription medications. You are responsible for the cost of your prescriptions until you reach $5,000 of total true out-of-pocket (TrOOP) costs within the calendar year. In the Donut Hole, you pay 44% of the cost of generic drugs and 35% of the cost of brand name drugs.
Phase 4: Catastrophic Coverage: When you reach $5,000 in TrOOP costs, you reach the catastrophic coverage phase. In this phase, you will not pay more than 5% of the retail cost of your medications covered by the plan.
Annual Review of Part D Plans
It is a good idea to revisit your Part D plans each year. Over time, Part D plans can change their formulary and benefits, and you may be able to get more out of a plan if you switch. Even if you don’t change medications, you might be able to save money.
We would be more than happy to walk you through the process of choosing the right Part D plan for you. Give us a call at (866) 894-3258 and few can assist you.