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Medicare Part D Private Insurance

Prescription drug coverage is available to Medicare beneficiaries. This plan reimburses you for a portion of your pharmaceutical costs. If you have Original Medicare, you can enroll in a Medicare Part D plan. You can also enroll in a Medicare Advantage plan that covers prescription drugs.

Drug insurance may not seem necessary if you are not currently using any expensive prescriptions. However, as soon as you sign up for Medicare, you should enroll in at least a low-cost medication plan. If you wait too long, you may find yourself needing to purchase coverage to assist pay for expensive drugs that can cost thousands of dollars each year. The financial consequences are severe. Learn more about how to approach this decision, which is one of many you’ll have to make while enrolling in Medicare.

Medicare Part D late-enrollment penalty

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Even if you don’t presently take prescription medications, enrolling in Medicare Part D as soon as you’re eligible is a good idea. As previously stated, if you have Medicare Part A and/or Part B and live in the service area of a Medicare plan that provides prescription drug coverage, you are eligible for Medicare Part D.

If you don’t sign up for Medicare Part D, be sure you have other creditable prescription drug coverage, which is insurance that is equivalent to Medicare’s standard prescription drug benefit. If you don’t sign up for Medicare Part D when you first become eligible and go without creditable prescription drug coverage for 63 days or longer, you may be charged a late-enrollment penalty if you do so later. This penalty is a one-time charge added to your monthly Medicare Part D payment; you may be required to pay this higher premium indefinitely.

Some employer-sponsored health plans are creditable, but not all employer-sponsored coverage is. If you get health insurance via your company (or your spouse’s employer), you’ll be notified every year if your coverage is creditable. If you haven’t received this notice, check with your employer’s group coverage to see if your coverage is valid.

You don’t have to get Medicare Part D if you don’t want to. If you don’t sign up when you’re first eligible and don’t have creditable prescription medication coverage, you might have to pay a higher premium later if you decide to enroll.

Costs of Medicare Part D prescription medication insurance

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Your Medicare Part D prices may vary by plan, insurance company, and area because Medicare plans set their own monthly premiums and other out-of-pocket fees. A monthly premium is required for each Medicare Prescription Drug Plan and Medicare Advantage Prescription Drug Plan. Keep in mind that your Medicare Part D premium is different from any monthly Medicare Part A or Part B premiums you may due. In addition to any monthly premiums needed by your Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug Plan, you must continue to pay your Medicare Part B premium. If you’re enrolled in a Medicare Advantage plan that includes prescription drug coverage, Your plan premium may include the cost of your Medicare Part D coverage.

If your income (as reported on your two-year tax return) exceeds a certain threshold, you may be required to pay an extra fee. This fee, commonly known as the Part D Income-Related Monthly Adjustment Amount (IRMAA), is separate from your Part D monthly premium and is subject to change each year. Unlike your Part D monthly payment, you’ll pay the Part D-IRMAA directly to Medicare, not your Medicare plan.

Social Security will notify you if you owe the Part D-IRMAA. From 7 a.m. to 7 p.m., Monday through Friday, call Social Security at 1-800-772-1213 (TTY users, 1-800-325-0778) for further information. Call the Train Retirement Board at 1-877-772-5772 (TTY users, 1-312-751-4701) from 9 a.m. to 3:30 p.m., Monday through Friday if you worked for a railroad.

Other Medicare Part D costs may include the following in addition to your monthly plan premium:

  • The yearly deductible is the amount you must pay out of pocket before your Medicare plan begins to pay for your expenses. For Medicare plans that include prescription medicines, the government sets a maximum deductible, which may change each year. A deductible may or may not be included in some plans.
  • After you’ve paid your plan deductible, you’re responsible for paying copayments and coinsurance for your prescriptions (if required). A copayment is a set amount (such as $5), whereas coinsurance is typically a percentage. After your plan has paid its portion, you may owe a 10% coinsurance for covered prescriptions, for example.
  • The coverage gap, sometimes known as the “donut hole,” occurs after you and your plan have spent a specific amount on covered prescriptions (including the deductible), resulting in a temporary increase in your out-of-pocket prescription drug costs. Beneficiaries used to be responsible for full prescription costs once they entered the coverage gap; however, current healthcare legislation has provided discounts on covered brand names and generic prescriptions throughout the coverage gap. You’re out of the coverage gap once you’ve spent up to a particular amount out of pocket, and your Medicare plan switches to catastrophic coverage, in which you pay just a small copayment or coinsurance for eligible prescription drugs for the rest of the year, while your plan covers the rest. Every year until 2020, when the coverage gap is eliminated, healthcare reform decreases your expenditures in the “donut hole.”

There are two options for obtaining Medicare drug coverage.

Original Medicare's Drug Plan

You can purchase a stand-alone Medicare Part D prescription drug coverage through a commercial insurance provider if you choose Original Medicare. UnitedHealth Group, Humana, and CVS Health, for example, cover around 56% of Medicare Part D enrollees. In 2021, half of Part D enrollees (50%) will choose a stand-alone plan.

Medicare Part D Prescription Drug Plan

Prescription drug coverage is usually included when you enroll in a Medicare Advantage (Medicare Part C) plan. Medicare Advantage prescription drug plans were chosen by half of Part D enrollees (50 percent) (MA-PD plans). Some of the many insurance companies that offer Medicare Advantage plans with prescription medication coverage are Aetna, Humana, and Blue Cross Blue Shield.

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What Does Medicare Drug Insurance Cover?

  • The types of prescriptions covered by each policy, as well as the amount you must pay, differ. Even the cheapest prescription medication plans must cover the majority of generic and brand-name pharmaceuticals, as well as insulin preparations, that people on Medicare require. It must also cover all or almost all of the medications in the following groups:

    • Anticancer medications (unless covered by Medicare Part B) ,
    • Antidepressants,
    • Antipsychotic medications,
    • Anticonvulsive medications are used to treat seizure disorders.
    • Treatments for HIV/AIDS
    • Medications that inhibit the immune system, as well as
    • For a $0 copay or low-cost sharing, Opium Treatment Programs (OTP) and at least one naloxone product are available.

    Vaccines, including shingles shots, that are not covered by Medicare Part B must be covered by Part D coverage. (Medicare Part B covers the annual flu shot, pneumococcal vaccine, and COVID-19 vaccine.) In 2022, the Medicare Part D insulin savings program will charge a maximum copayment of $35 for insulin treatment.

    What isn’t covered under Medicare drug coverage?

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  • anorexia, bulimia, or weight gain
  • Symptomatic alleviation for coughs and colds
  • cosmetic purposes
  • Fertility medications
  • hair growth
  • over-the-counter medications
  • erectile dysfunction (sexual or erectile dysfunction)
  • vitamins and minerals, except for prenatal vitamins, niacin (when used to treat a condition), and fluoride

Some of the drugs on the above list may be covered under plans with “enhanced alternative coverage.”

Coverage Limitations

To ensure that your prescriptions are covered and to learn about your out-of-pocket costs, check the plan’s formulary, or list of covered pharmaceuticals (deductible, coinsurance, copays). Prescription drug programs, whether stand-alone or as part of a Medicare Advantage plan, have distinct guidelines for limiting coverage for prescriptions depending on cost.

A generic drug, for example, may be deemed Tier 2 and will cost you relatively little out-of-pocket. Name-brand and specialty Tier 3-5 medications, on the other hand, may be much more expensive. Prescriptions may also require prior authorization, or you may be required to try a lower-cost medicine first.

Who Is Eligible for Part D of Medicare?

  • Part D medication insurance is available to those 65 and older who are eligible for or have previously enrolled in Medicare. Those who have been receiving Social Security Disability Insurance (SSDI) benefits for more than 24 months or who have been diagnosed with end-stage renal disease are also eligible.

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What is the cost of Medicare Part D?

Premiums

Monthly premium costs vary by plan and are determined by your income. Higher-income individuals will pay more. Single filers earning more than $91,000 and couples earning more than $182,000 will pay more in 2022. Adjustments to your premium may range from $12.40 to $77.90 each month.

Deductible

A deductible is an amount you must spend before the insurance company begins to pay its share. Deductibles are not required in some prescription programs. For 2022, the maximum allowable deductible is $480.

Copayment/Coinsurance

Copayments (a specific amount you pay for prescriptions in each tier) or coinsurance (a percentage you pay for the drug’s price) are two options in a drug plan.

What Is the Coverage Gap or Donut Hole?

You pay the cost-sharing specified in your policy until your total drug expenditures reach $4,430 in 2022.

  • The coverage gap, often called the donut hole, begins after you hit the initial coverage limit of $4,430 (up from $4,130 in 2021).
  • Then, until your total out-of-pocket Part D spending exceeds $7,050, you pay 25% of the cost of brand and generic medications.
  • The catastrophic limit kicks in at that point, and beneficiaries pay the greater of 5% or $3.95 for generics and $9.85 for brand-name pharmaceuticals for the rest of the year.

What Is Extra Help and Who Is Eligible?

Through Medicare’s Extra Help program, you may be eligible for cheaper premiums, deductibles, and coinsurance. Participants in the program will pay $3.95 for each generic prescription and $9.85 for each brand-name drug in 2022.

If your income is up to $19,320 for an individual and $26,130 for a couple in 2022, and you have a restricted amount of savings, stocks, and bonds, you may qualify. You can apply for Extra Help at any time if your income or resources change.

When Can You Enroll in Medicare Part D?

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Initial Enrollment Period

You can add a stand-alone Part D medication plan or join a Medicare Advantage plan with drug coverage when you turn 65 and become newly eligible for Medicare. You can transfer from a Medicare Advantage plan to Original Medicare and purchase a stand-alone drug coverage within the first 12-months of initial enrollment. Those under the age of 65 who qualify for Medicare can enroll in Part D prescription drug coverage when they first become eligible.

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Annual Election Periods

During the Annual Open Enrollment Period, which runs from October 15 through December 7, you can update your prescription medication coverage. Your new plan will begin on January 1st. You can also change Medicare Advantage plans or switch to Original Medicare during this time.

You can change Medicare Advantage plans (with or without drug coverage) or move to Original Medicare and join a Part D prescription drug plan during a distinct election period called the Medicare Advantage Open Enrollment Period, which runs from January 1 to March 31.

Special Enrollment Period

Certain life events, such as relocating to a new residence, entering or exiting an institution (such as a skilled nursing facility or prison), and other exceptional circumstances, may qualify you for a special enrollment period to alter your Medicare Advantage or Medicare prescription medication coverage.

Find a Medicare Drug Plan in Your Area

For a list of stand-alone Part D plans and Medicare Advantage plans with drug insurance available in your ZIP code, use the online Medicare Plan Finder tool. The comparison tool displays the prescriptions covered by each plan, as well as cost-sharing amounts, prior authorization requirements, and preferred pharmacies.

Choose the Right Prescription Drug Plan for You

Here are a few pointers on how to pick a plan that fits your budget, needs, and interests.

  • Examine the costs. Monthly premiums are significant, but so are cost-sharing elements like deductibles, coinsurance, and copays. In the long run, a cheap premium may cost you more.
  • A Medicare Advantage plan (Part C) with prescription medication coverage may offer reduced premium expenses if you like “one-stop shopping” and are prepared to choose a plan that limits you to a network of doctors.
  • You might wish to choose a low-premium plan if you don’t take any or only a few prescriptions. It will continue to cover the majority of the drugs that Medicare recipients require.
  • If you’re on a long-term prescription, compare the costs and availability of several plans. If you take generic medications, check for programs that price you little or nothing.
  • If you anticipate significant prescription costs, it may be worthwhile to look for a plan that provides additional coverage if your spending reaches a certain threshold.
  • Check to see if the plan has a convenient recommended pharmacy, where you may typically get additional savings on prescription drugs when choosing a plan.

Medicare prescription drug coverage: Read More

Special Enrollment Period

Certain life events, such as relocating to a new residence, entering or exiting an institution (such as a skilled nursing facility or prison), and other exceptional circumstances, may qualify you for a special enrollment period to alter your Medicare Advantage or Medicare prescription medication coverage.

Special Enrollment Period

Certain life events, such as relocating to a new residence, entering or exiting an institution (such as a skilled nursing facility or prison), and other exceptional circumstances, may qualify you for a special enrollment period to alter your Medicare Advantage or Medicare prescription medication coverage.

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