Medicare Part D

Medicare Prescription Drug Coverage is known as Medicare Part D. Part D is available through private insurance companies to anyone who is eligible for Medicare. Most Advantage Plans include Part D coverage. For people who choose Original Medicare, it is possible to add a Prescription Drug Plan (PDP). These are premium plans and you must also be enrolled in Medicare Part A or Part B. In addition, you have a 7-month enrollment period when you are eligible for Medicare during which time you can enroll in a Medicare Prescription Drug Plan. If you enroll later you will have to pay an enrollment penalty. Like Part B, monthly premiums for Part D are determined by your modified gross adjusted income from 2 years ago. Part D Plans also usually have deductibles and co-payments. Private companies administer these policies and the costs associated with them will fluctuate from one plan to another.

Retiree health plans often provide prescription drug coverage and can usually be used in conjunction with Original Medicare. Check with your retiree plan administrator to find out how your current insurance coverage works with Original Medicare before adding additional Part D Medicare Prescription Drug Coverage.

Most Medicare Part D plans have what is known as a coverage gap. This refers to a gap in what the policy will pay towards drugs and your out-of-pocket limit. The yearly deductible, coinsurance and co-payments all go towards your out-of-pocket limit. Extra help is available to help pay for this gap in coverage and in some cases you can get a plan that will have a smaller gap but these plans generally have higher premiums. In an effort to lessen the burden of the coverage gap once a Patient has spent a total of $2,840 on approved prescription drugs during a year the patient gets prescriptions for 50% less until he/she has spent a total of $4,550 out-of-pocket for the year. After this amount the patient only continues to pay a small co-payment in addition to the insurance premiums for the remainder of the year.

Auntie Lou says, "A $4,550 out-of-pocket Plan D GAP? That's more like a canyon."

In summary, Part D provides prescription drug coverage plans to cover the cost of regular medications not covered by Medicare Part A or Part B. If you have chosen a Medicare Advantage Plan (Part C) drug coverage is usually included in the cost of the plan. If your Advantage Plan does not include drug coverage you can add a Prescription Drug Plan. However, if your Advantage Plan does include drug coverage and you sign up for an additional Part D plan your Advantage coverage will automatically be dropped and you will placed back into Original Medicare. Retiree plans from previous employment can be used with Original Medicare to provide drug coverage but they often can't be used with Advantage Plans. If you have retiree benefits always check with your plan administrator before making any changes to your insurance or Medicare coverage.