Comparing Coverage for Medicare Part D Plans

How to get Part D coverage

To enroll in Part D, you must first be enrolled in a Medicare plan. You can get prescription drug coverage in two ways: with a Medicare prescription drug plan (Part D) or with a Medicare Advantage (Part C) plan.

If you’re enrolling in original Medicare (parts A and B) for the first time, you may benefit from also enrolling in Part D — even if you don’t currently need treatment.

If you don’t opt into Medicare Part D coverage when you initially sign up for Medicare, you’ll likely have to pay penalty fees to enroll at a later time. These fees generally last for as long as you have prescription drug coverage.

To enroll in Part D, you’ll first need to choose a Medicare drug plan. When choosing a plan, consider all medications you’re currently taking. Check the plan’s formulary to see if they’re covered and how much you’ll owe, including premiums and copays.

After you’ve chosen a plan, you can enroll in a few ways:

• Complete and mail in a paper enrollment form.
• Enroll using Medicare’s online plan finder tool.
• Call the plan provider to enroll over the phone.
• Call Medicare at 800-633-4227 to enroll over the phone.

You’ll need to provide your Medicare number and the date that your Part A or B coverage started. This information can be found on your Medicare card.

Other ways to get prescription drug coverage

You may also get prescription drug coverage through a Medicare Advantage (Part C) plan. Medicare Advantage plans offer the same coverage as original Medicare plans, plus prescription drug coverage.

Understanding Medicare Part D coverage

The list of prescription drugs covered under Part D depends on the type of plan you have. Each plan must provide a basic level of coverage, which is set by Medicare.

Medicare Part D plans cover:

• A formulary of covered prescription drugs. Plans have their own formulary, or list of covered medications, and may change it during the year if they’re following Medicare guidelines. You’ll be notified if the formulary for your plan changes.
• Generic medications. Medicare prescription drug plans include both brand name and generic prescription drugs.
• Different tiers of prescription drugs. Many Medicare prescription drug plans offer coverage in different tiers to lower the costs of medication. Tiers may be divided by generic or brand name, or by how preferred the prescription drug is.

In some cases, your provider may think it’s more beneficial to your health to prescribe you something in a higher tier rather than a similar drug in a lower tier. Prescription drugs in higher tiers are generally more expensive.

In this case, you can file an exception and ask your Medicare drug plan for a lower copayment.

Understanding the tiers

Preferred vs. nonpreferred brand name drugs

In general, generic prescription drugs are less expensive than brand name drugs. Most Part D plans cover generic medications.

Generic versions of a prescription drug are not always available on the market, however. These may be considered “preferred brand name” because an alternative option isn’t available.

“Nonpreferred brand name” prescription drugs, on the other hand, are medications that do have a comparable generic version available.

Since you won’t always know which drugs are generic, preferred brand name, or nonpreferred brand name, it’s important to ask the doctor who’s prescribing your medication whether it’s generic.

If it’s not generic, you can ask whether a generic version is available. This is especially important if you want to keep your drug costs low.

How much does Medicare Part D cost?

The costs of your prescription drug plan will depend on various factors including:

• the kinds of medications you need
• which plan you have
• whether you go to a pharmacy in your plan’s network
• whether the medications you need are on your plan’s formulary
• if you get Extra Help from Medicare

Some of the costs you’ll be responsible for may include:

• yearly deductibles
• monthly premiums
• copayments or coinsurance
• coverage gap costs
• Extra Help costs (if you get Extra Help)
• late enrollment penalties (if you pay them)

Deductibles and premiums may vary, depending on your Medicare prescription drug plan. Medicare dictates that yearly deductibles in 2020 can’t exceed $435.

The coverage gap

The coverage gap, also known as the “donut hole,” occurs when you and your Medicare prescription drug plan spend a certain amount of money in a year on prescription medications. The limit on spending in 2020 is $4,020.

The coverage gap includes the amount paid for your medications by your insurance company, your yearly deductible, and cost-sharing amounts for covered medications. It doesn’t include your monthly premium.

Once you have exceeded the spending limit, you’ll be responsible for a paying a certain percentage of additional prescription drug costs until you reach your out of pocket threshold.

Note that not everyone reaches the coverage gap.

The takeaway

You have different options for getting prescription drug coverage under Medicare. Talk to your healthcare provider about which Medicare plan is best for you.

Original Medicare and Medicare Advantage offer varying options for prescription drug benefits.

The plan you choose should be tailored to your health needs and budget. Medicare offers several resources to assist in paying for prescription drug coverage, such a tiered list of medications and programs like Extra Help.

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