Medicare
Part D

Prescription Drug Coverage

Medicare offers prescription drug coverage to everyone with Medicare, however, you must enroll in Medicare Part D on your own. You will not be automatically enrolled. If you decide not to join a Medicare Prescription Drug Plan when you’re first eligible, and you don’t have other creditable prescription drug coverage, you may have to pay a late enrollment penalty.

Medicare Part D

How To Get Medicare Part D

To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. There are two ways to get drug coverage:

What Medicare Part D Covers

Each Medicare Part D 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 co-payment.

Myth:

Drug coverage is provided by the Federal government.

Fact:

Drug coverage is not provided by the government, but rather through insurance companies approved by Medicare.

Medicare Part D Cost

Most Medicare Prescription Drug Plans charge a monthly fee that varies by plan. You pay this in addition to the Medicare Part B premium. If you belong to a Medicare Advantage Plan (Part C) that includes Medicare prescription drug coverage, the premium may already be included.

Medicare Part D Late Enrollment Penalty

You may owe a late enrollment penalty if, at any time after your initial enrollment period is over, you don’t have Medicare Part D or other creditable prescription drug coverage. The amount of the penalty depends on how long you went without creditable prescription drug coverage. Learn more about the Medicare Part D Late Enrollment Penalty.

Medicare Part D Income Adjustment

Most people will pay the standard premium amount. However, if your modified adjusted gross income, as reported on your IRS tax return from 2 years ago, is above a certain amount, you may pay more.

MEDICARE PART D PREMIUM INCOME ADJUSTMENTS

IF YOUR ANNUAL INCOME IN 2015 WAS:

FILE INDIVIDUAL
TAX RETURN
FILE JOINT
TAX RETURN
FILE MARRIED &
SEPARATE TAX RETURN
PREMIUM YOU
PAY IN 2017
$85,000 OR LESS$170,000 or LESS$85,000 OR LESSYour Plan Premium
BETWEEN $85,000
& $107,000
BETWEEN $170,000
& $214,000
Not ApplicablePlan Premium + $13.30
BETWEEN $107,000
& $160,000
BETWEEN $214,000
& $320,000
Not ApplicablePlan Premium + $34.20
BETWEEN $160,000,
& $214,000
BETWEEN $320,000
& $428,000
BETWEEN $85,000
& $129,000
Plan Premium + $55.20
ABOVE $214,000ABOVE $428,000ABOVE $129,000Plan Premium + $76.20
The information in this table has been compiled from different sources including, but not limited to, medicare.gov & cms.gov. To get more information about your Medicare Part D premium, please contact your local Social Security Administration office.

Medicare “Doughnut Hole”

Most Medicare Part D Prescription Drug Plans have a coverage gap (more frequently referred to as the “doughnut hole”). Essentially, after a person and their drug plan have spent a specific amount of money for covered drugs, $3,700 in 2017, they would be in the “coverage gap”. This amount may change each year. For 2018, you will reach the doughnut hole once you and your plan have spent $3,750.

Once you reach the coverage gap, you’ll pay 44% of the plan’s cost for covered brand-name prescription drugs in 2018 until you have spent $5,000. At this point, you are out of the doughnut hole and would automatically have “Catastrophic Coverage” which requires a small co-insurance for covered drugs.

Some plans do offer coverage while in the gap, such as for generic drugs, but will generally charge a higher monthly premium. Double check the plan you are considering to ensure the drugs would be covered if you reach the gap.

The table below compares the standard benefits for Medicare Part D plans from 2017 to 2018.

Standard Medicare Part D Benefits20172018
Deductible$400$405
Initial Coverage Limit (Expenses paid by individual and plan)$3,700$3,750
Out-of-Pocket Maximum$4,950$5,000
Minimum Copayment in Catastrophic Coverage for Generic Drugs*$3.30$3.35
Copayment in Catastrophic Coverage for Other Drugs$8.25$8.35
*In the Catastrophic Coverage Period, you will pay 5% of the costs or the respective co-pay, whichever is greater.
2017 Medicare Part D Doughnut hole

How To Avoid The Medicare “Doughnut Hole”

  • Choose The Right Plan: Take a copy of your plan’s formulary (list of drugs covered by the plan) and discuss it with your doctor about what drugs will be lowest cost to you. Confirm all drugs you take are covered.
  • Use Generics When Possible: Studies have shown people can avoid the Part D Doughnut Hole by increasing their use of generic medications over brand. Using lower cost drugs, such as generics, can help your coverage last longer.
  • Review Your Plan Every Year: Evaluate your prescription drug plan every year. There are major changes in the pharmaceutical and insurance industries every year that can affect what benefits are being offered and what drugs are covered (and at what prices). Contact us today to help you compare and select the best drug plan for your needs.

Paying Too Much For Prescription Drug Coverage?

There are several choices to consider when looking at prescription drug coverage. We can help you verify eligibility, discuss formularies to confirm the prescriptions you need are covered & more.