Medicare Part D, also called Medicare prescription drug coverage, helps pay for prescription drugs not covered under Parts A or B. Though the federal government pays 75% of medication charges for Part D, the beneficiary still pays copays, premiums, and deductibles. As a result, rates and coverage can vary based on the plan you choose.
Private insurance companies offer Part D plans and can be complicated at times. Therefore, we have shared a quick guide for you.
Before that, here are a few fast facts about Medicare Part D.
Facts About Medicare Part D
- The individual must be registered in either Medicare Part A or Part B to enroll in Part D.
- It covers only prescription drugs for beneficiaries.
- Medicare Part D coverage is non-compulsory.
- Private insurance firms sell it.
- Part D enrollment is not automatic. Also, late registration penalties may apply.
Eligibility for Medicare Part D
Part D eligibility is quite similar to Original Medicare. And anyone who obeys the below statements is eligible for Part D and can enroll in it.
- must be 65 years of age or more
- have received social security disability payments for 24 months — at least.
- is diagnosed with amyotrophic lateral sclerosis (ALS)
- is diagnosed with End-Stage Renal Disease (ESRD) or kidney failure
- have received Social Security disability for at least 24 months
Notably, you must have enrolled in Original Medicare (either Part A/Part B or both) to be eligible for Medicare Part D. Also, you cannot have a stand-alone Part D plan if you are not enrolled in Original Medicare.
However, if you’re eligible and haven’t enrolled in Original Medicare, you can enroll in Medicare Part C (Advantage Plans), which usually provides drug coverage.
Enrollment Period for Medicare Part D
After becoming eligible, it comes to enrolling in a Part D plan. And there are many periods under which you can enroll in Medicare Part D.
However, the most preferred and the easiest one is IEP (Initial Enrollment Period). So, let’s discuss all of the periods you can enroll through and why IEP is the most preferred one.
Part D Initial Enrollment Period
The period is named as Initial Enrollment Period as it allows you to enroll when you first become eligible.
However, as we discussed, you must have enrolled in Original Medicare already to enroll in Part D. If not, you can enroll in Medicare Advantage Plans, which usually provide drug coverage.
Part D Open Enrollment Period
Open Enrollment Period, also known as the Annual Election Period, runs from October 15 to December 7 every year. If you miss enrollment in Medicare Part D during IEP, you can enroll in the Open Enrollment Period. But you must have creditable coverage in the period when you became first eligible, or you have to pay a late-enrollment penalty.
Besides enrolling in Medicare Part D, you can;
- Switch from Original Medicare to Medicare Advantage and vice-versa.
- Switch from one Medicare Advantage Plan to another.
- Switch from one Medicare Part D drug plan to another.
Part D Special Enrollment Period
Part D Special Enrollment is a 63-day period introduced to beneficiaries after their creditable drug coverage ends.
Suppose you have drug coverage already, provided by your employer or a union, while you’re also enrolled in Original Medicare. Once the provided coverage ends, you get a 63-day period under which you can enroll in Medicare Part D without any penalty.
That period is called the Special Enrollment Period.
Among all periods, IEP is preferred as your coverage begins the time you apply for it, and you expose yourself to no penalties at all.
How to Enroll in Medicare Part D
As we discussed, there are two ways to get Medicare Part D coverage; (i) via Original Medicare and (ii) via Medicare Advantage Plans.
Once enrolled in Medicare Part A/B or both, you can enroll in Part D.
You’ll automatically get prescription drug coverage if you’re enrolled in Medicare Advantage.
Here’s how you can enroll in Part D;
- Visit Medicare Plan Finder, find the plan of your choice, and enroll.
- Enroll via a paper enrollment form
- Call Medicare at 1-800-MEDICARE (1-800-633-4227). TTY: 1-877-486-2048.
It is necessary to know whether the plan of your choice provides the drug coverage you take. Also, you must ensure whether the plan’s drug formulary has changed in the past or not. Of course, you can always discuss the same with our licensed experts specializing in Medicare when choosing a plan.
Our agents will assess your medical needs and help you find a suitable drug plan.
How Much Does Medicare Part D Cost?
The cost of your Medicare Part D plan depends on many factors, such as deductibles, copays, premiums, coinsurance, your location, income, and what drugs you take, and so on.
However, you can get the overview by analyzing some of the factors. Here are these;
According to 2022 guidelines, the deductible can’t be more than $480 for any Part D plan. However, you also have the choice to choose plans that have $0 deductibles depending on the medications you take.
Premium is a monthly fee you pay for a specific Part D plan. The national average monthly premium rate for 2022 will be about $33.37.
Copays are set by the plan provider and depend on the plan you choose and the medications you take. It is the fee that you pay for an individual drug.
Coinsurance costs depend on the specific plan you choose and which tier your specific medication falls into.
The coinsurance will be a percentage of the medication’s cost. Once you meet your deductibles, you’ll begin paying coinsurance if the Part D plan you choose asks for it.
Donut Hole or coverage gap occurs when your total drug costs reach a specified limit. For instance, in 2021, the limit was $4,130, and in 2022, it will be $4,430. When you reach the gap, you have to pay 25% of the costs of your prescription drugs.
The other factors that vary the cost of your prescription drug plan are the location where you live, the medications you take, and your income. A late enrollment fee may also add up if you fail to enroll during IEP and don’t have creditable prescription drug coverage.
To estimate the total cost of your prescription drug plan, you can always consult our licensed agents specializing in Medicare. They will assess your medical conditions, the medications you take and suggest a suitable plan accordingly.