Medicare Part D is coverage that helps you pay for the cost of your medications. Medicare Part A and Part B do not cover over-the-counter drugs. Part D plans are approved by Medicare but administered by private insurance companies. This means that you do not call Medicare to enroll in Part D the way you did to enroll in Part A and Part B. Instead, you contact the insurance company directly to sign up for you Part D plan.
PART D COSTS
Part D plans are required to cover at least two medications in all of the major drug categories. Although they cover most of the same medications, they can vary greatly in what you will pay out of pocket. Be sure to check your plan’s list of covered drugs, also known as the formulary, to make sure that your medications are covered.
There are a few other factors that will impact the cost of your Part D plan.
- Before enrolling in a plan it is important to look at the plan’s premium, deductible amount, and copays and co-insurance amounts for your specific medications.
- Another thing to consider is which pharmacy you use. Some plans will have a network of preferred and non-preferred pharmacies. If you go to a non-preferred pharmacy, you will typically pay more for your medications.
- Some people qualify for special programs that can help lower the cost of their medications. We encourage everyone to contact Medicare to see if they qualify for Extra Help.
- Some people will pay an Income-Related Monthly Adjustment Amount (IRMA) based on their income level. Individuals making over a certain threshold will have to pay more for their Part D plan. This is determined by Medicare and your IRMA will be the same for whatever Part D plan you choose.
LATE ENROLLMENT
A costly mistake that some people make is not enrolling in a drug plan when they are first eligible. If you do not get a Part D plan when you are first eligible you may have to pay a late-enrollment penalty. This does not apply to you if you had creditable coverage or qualify for Extra Help. The Part D penalty is equal to 1% of the average cost of a Part D plan per month for each month that you were eligible to join but did not. In 2021 the average Part D plan was $33.06. S for example, if you were eligible for Part D 12 months ago and did not have creditable coverage you would pay an extra $3.97 every month for your Part D plan. This penalty will continue indefinitely as long as you have a drug plan.
Also, it is important to keep in mind that there are only certain times when you can enroll in a Part D plan. If you need medications and you are not in an enrollment window you will have to wait to sign up. In this example you will have to pay 100% of the cost of your medications until you can join a plan. It is important to consider enrolling in a plan even if you don’t think you need one, to avoid getting stuck without coverage or having to pay penalties.
RESOURCES
Part D can seem overwhelming at times but there are resources to make it easier. Medicare.gov can be a great place to start. Simply put in your zip code and they will show you all of the plans available in your area. Health insurance carriers will have a list of their plans along with the formulary on their website. If you have an agent, they should check your medications for you and be able to narrow down which plans to consider based on your needs.
