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Medicare Part D Prescription Plans

Close-up of pharmacist explaining medication to a patient.

Medicare Part D is a prescription drug program. As many people do, you should ensure you enroll in a Medicare Part D program if you take prescription medications. These plans are designed to reduce the cost of prescription drugs. If you are eligible for Medicare Part A and B, enroll in Medicare Part D at the same time, or you will pay more if you choose to enroll in a program later.

Medicare Part D – The Formulary

Every company that offers Medicare Part D issues a “formulary” or a list of the prescription drugs the plan covers. The formulary will vary based on the plan type and the insurance carrier. To enroll in the right plan, you must review the formulary to determine which of the medications you take are covered.

How Much Does Medicare Part D Cost?

To put Medicare Part D in place, you will need to choose a plan that suits your budget, as you will pay a monthly premium. The premiums vary from plan to plan. You will also share the cost of the medications until you reach the limit for the plan’s out-of-pocket costs. In most plans, after you reach the policy limit, you must pay only 25 percent of the cost of medications until you reach the next level. Once you have passed the out-of-pocket costs at that level, your copay or coinsurance costs will reduce even further. You can opt to have your Part D premiums deducted from your Social Security benefits every month.

Not all Plan D’s for prescription drug plans (PDPs) are the same. They can vary greatly in costs, co-pays, and the types of specific drugs that are covered.

It is important to check which one suits you and continue to check each year because they can change their coverage options from year to year. Because some plans even vary from county to county, we strongly recommend that you talk to an independent insurance agent from Jon Nolan Insurance to help you choose the plan that best suits your needs and your budget.

Ways to Get Prescription Drug Coverage

Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.

Second, Advantage Plans have co-pays associated with them. It is important to be aware of these because they can add up to be quite a bit of money. Third, most Advantage Plans have the Part D “built-in” which is a nice bonus but you must be aware that when switching to a Supplement from an Advantage Plan you will also need to add a Part D. (there are several types of Advantage Plans that do NOT have the Part D built-in so this is something you need to keep in mind when choosing any plan).

What Your Part D Drug Plan Covers

Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different “”tiers”” on their formularies. Drugs in each tier have a different cost. A drug in a lower tier will generally cost you less than a drug in a higher tier. In some cases, if your drug is on a higher tier and your prescriber thinks you need that drug instead of a similar drug on a lower tier, you or your prescriber can ask your plan for an exception to get a lower copayment.

*Disclaimer: This page has not been reviewed or endorsed by Medicare.gov or any member of the Centers for Medicare & Medicaid Services (CMS).

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