Everything You Need To Know About Medicare Part D

Out of all of the Medicare Parts, Medicare Part D is probably the easiest one to remember what it covers.  

If you can remember that the 'D' stands for drugs, then you should be able to remember that Medicare Part D covers your prescription drugs.  

If you can’t remember that the D stands for drugs, that’s ok too, because you we going to review everything you need to know about Part D, anyways.  

The three essential questions, that we will review, that you need answered are; ‘What is Medicare Part D?’, ‘What does Medicare Part D cover?’, and ‘How much does Medicare Part D cost?’. 

Medicare Part D
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What Is Medicare Part D?

Prior to 2006, when Medicare Part D first began, there was no insurance to help cover for your prescription drug costs.  

While Medicare is the government program that helps provide medical coverage for people over the age of 65, Medicare Part D is administered through private insurance companies.  

You will be responsible for enrolling in a drug coverage program once you reach the age of 65 and/or enroll in Medicare Part A or Part B 

These are not to be confused with Medicare Supplement Plans which fill in the coverage gaps for original Medicare. 

The government requires you to carry some form of prescription drug coverage, whether is be Part D, Medicare Advantage or another prescription drug insurance.  

If you fail to carry prescription drug coverage, Medicare will assess a penalty of 1% each month  you fail to have prescription drug insurance.  

For example, if you do not enroll in a prescription drug plan for 12 months after your open enrollment period ends, you will be assessed a 12% penalty (1% each month) multiplied by the average monthly premium costs per month.  

If the average premium costs is $30 per month multiplied by 12% the total penalty per months would be $3.60.  

So your total penalty cost would be $3.60 multiplied by the 12 months that you failed to have coverage in place for a total penalty of $43.20.  

Obviously, if you were to go two or three years without coverage the penalties could be pretty high 

Contact your Senior Benefits Expert agents and enroll today to avoid any penalties. 

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What Does Medicare Part D Cover? 

Medicare Part D will cover a portion of your prescription drug costs depending on the tier the drug is in.  

Be sure to speak with a Senior Benefits expert on the medications that you presently use as different Part D plans cover drugs differently.  

The plan will only cover a portion of medications and will not include hospital visits (Medicare Part A) or doctor’s visits (Medicare Part B). 

What Does Medicare Part D Cost?

Medicare Part D will cover a portion of your prescription drug costs depending on the tier the drug is in.  

You will pay a percentage of your prescription depending on the tier your insurance company considers your medications to be in.  

There are four tiers of prescriptions: 

Tier 1 – The least expensive drugs. Usually generics and some brand names proven to be the most effective.  

Tier 2 – Second least expensive drugs. Brand names that have proven to be the most effective.  

Tier 3 – Third least expensive drugs. These are brand named drugs that are not considered the most effective as well as preferred specialty drugs. 

Tier 4 – The most expensive drugs. These are brand named drugs and/or not preferred specialty drugs.  

Understand, no prescription drug coverage is going to pay the entire cost of your medications.  

You will pay some sort of co-payment depending on what tier the prescription falls into and the total amount that you have paid for medications during the year.  

In addition, some Medicare Part D plans call for an annual deductible that has to be paid by you before the private insurance company will begin paying a portion of your medication costs.  

In 2020, the maximum annual deductible you can be asked to pay for Medicare Part D is $415.  

Be sure to speak with a Senior Benefits expert agent about your plan options as the larger the deductible the lower the plan costs will be but the inverse is also true, the lower the deductible (there are plans available with deductibles of $0) the more the plan will generally cost.  

The national average monthly Part D premium costs for 2018 was $33.46.  

In addition to having to pay your premium costs if you make more than $85,000 a year individually or $170,000 jointly, Medicare will charge you an income related monthly adjustment amount based on your annual filed income.  

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Taking Action!

Now that you have a much better understanding of Medicare Part D and what it covers, it's time to discuss your situation with a Senior Benefit Services expert. 

There is a limited time you are eligible to enroll during your one-time open enrollment period or the costs of Medicare Supplement coverage can increase dramatically. 

Contact Senior Benefit Services today to find out what the best combination of coverage's are for you.