Medicare Part D Insurance Prescription Drug Plan
Medicare Part D helps pay for your prescription medications. If you have Original Medicare or a Medicare Supplement plan, you can get Part D coverage as a stand-alone prescription drug plan through a private insurance company.
If you have a Medicare Advantage plan, prescription drug coverage may be included, and you cannot have a separate Part D plan.
If you think you want prescription drug coverage, it's important to sign up as soon as you're eligible for prescription drug coverage, or you may have to pay a Medicare late-enrollment penalty fee.
Brand-name and generic prescription drugs are covered. The federal government has created guidelines for the types of drugs that must be covered, along with setting a minimum standard of benefits.
When you enroll in a Part D plan, it does not change the coverage or associated rules for prescription drugs covered under Part B. Part B covers drugs in a variety of situations, particularly when drugs are administered in your doctor's office.
A drug is considered a Part D drug only when prescribed for a medically accepted indication that's approved under the Federal Food, Drug and Cosmetic Act. It is also considered a Part D drug if its use is supported by one or more citations included or approved for inclusion in any of these compendia:
- American Hospital Formulary Service Drug Information
- United States Pharmacopeia-Drug Information
- DRUGDEX Information System
Each Part D plan has a formulary, or drug list, that meets these guidelines, as required by law. However, all plans are not the same. They can vary by cost, formulary or specific drugs covered.
If you're considering a Part D plan, first review the plan's formulary to make sure it will meet your prescription drug coverage needs.
Are there limits to coverage?
Plans vary in which specific prescription drugs they cover. The drugs that are excluded from Part D coverage by Medicare are:
- Drugs when used for anorexia, weight loss or weight gain.
- Drugs when used to promote fertility.
- Drugs when used for cosmetic purposes or hair growth.
- Drugs when used for the symptomatic relief of cough and colds.
- Drugs when used for erectile dysfunction.
- Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations.
- Non-prescription drugs.
A drug also can't be covered under a Part D plan if payment for that drug is covered under Part A or Part B, such as drugs administered in a hospital or a physician's office. Each prescription drug plan may have its own additional exclusions.
Part D plans have different levels of cost-sharing that apply throughout the plan year, known as the four stages of coverage. This means you will have to pay different cost-sharing amounts for your prescription drugs in each stage. However, when you enter the third stage, called the "coverage gap," you may be responsible for paying all of the costs of your covered prescription drugs.
What pharmacies can I use?
Each Part D plan decides which pharmacies plan members may use. This is the plan's pharmacy network. Some plans may limit your pharmacy network by state, while others may offer nationwide coverage.
If you travel often, you may want a plan that allows you to access pharmacies wherever you go. Some plans offer mail order pharmacy services, so you can have your drugs delivered right to your mailbox.
You'll need to fill your prescriptions at a network pharmacy to get the plan's discounted drug rate. There are some exceptions allowed, but these are limited to circumstances such as traveling within the United States and running out of your medication or becoming ill and being unable to get to a network pharmacy.
If that happens, you'll need to fill out a claim form. You may not get the same level of discounts as you would through a network pharmacy.
Insurance companies who offer Part D plans and Medicare Advantage plans with prescription drug coverage set their own premium prices. Monthly premiums can vary widely, even for similar coverage.
Premium costs are one of the reasons why it's important to sign up for a Part D plan when you first become eligible. If you wait to sign up, you may have to pay a penalty, set by Medicare, on your premium.
For each month you delay enrollment, you may pay an additional one percent of the national average premium per month. When you do enroll in Part D, you'll continue to pay this penalty for as long as you're enrolled.
Part D plans also have cost-sharing expenses, like deductibles, copays and coinsurance. What expenses you'll have, and how much you'll pay, varies by plan.
It's important to keep your drug costs low. Always fill your prescriptions at a network pharmacy and show your member ID card every time to ensure that the money you spend on your prescription drugs is correctly tracked. If you use brand-name drugs, ask your doctor if there are lower-cost, lower-tier drugs you could take instead. This may help you delay or avoid the coverage gap.
How do I enroll?
If you're entitled to Part A, or enrolled in Part B, you can enroll in a Part D plan as soon as you become eligible for Medicare, during your initial enrollment period. You cannot be refused coverage if you meet these requirements.
Each private insurance company that offers a Part D plan handles the enrollment process for its plans. You'll need to contact the company directly and ask how to enroll.
How do I choose a plan?
It's a good idea to think about how many medications you take and to estimate your drug costs before choosing a plan. This may help you find a Part D plan that best fits your prescription drug needs.