Medicare Part D


Medicare Parts A and B do not cover outpatient prescription medications and an important part of your medical coverage and treatment will include drugs. Consequently, Medicare has developed coverage for your medications that is known as Part D or PD.

Part D prescription plans are purchased through private insurance companies that must be approved by Medicare. Part D plans are available either as part of a Medicare Advantage Plan or as stand-alone.

Most Medicare Advantage plans have a network of participating providers and hospitals that accept their insurance, and many Advantage plans, including HMOs, POSs, and PPOs, frequently offer drug coverage as an integral part of their structure. Non-network plans, such as MSA or PFFS, and Medicare Supplement/Medigap plans do not include prescriptions and, as a result, a Medicare beneficiary needs to purchase a stand-alone drug card with these plans in order to have prescription drug coverage.

It is important for you to know that Medicare does not allow a Medicare Beneficiary to purchase a stand-alone Part D drug plan to go with network-Advantage plans (MA-PD or MA). If you are on an MA-PD or MA plan and join a stand-alone Medicare Prescription Drug Plan (Part D), you will be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.

You will normally pay co-pays and co-insurance for your prescriptions with all non-group Part D plans, with a Medicare-mandated out-of-pocket maximum that varies from year to year. These co-pays are different from plan to plan and company to company. In 2018 the out-of-pocket maximum set by CMS was $5,000. In addition, some plans include an initial deductible that you must satisfy before paying co-pays.

All individual Part D plans plan have two marking points in their coverage. The first such point is called the "Initial Coverage Limit" and is reached when you and your providers accumulate a total of $3,750 for 2018 in "total drug costs."

At this point you then enter into the Coverage Gap, better known as the "doughnut hole."

You will reach the second marking point of your plan when you have accumulated a total of $5,000 of "True Out-of-Pocket" costs, or "TrOOP" while in the Coverage Gap This means that your co-pays and deductible, if any, in the Initial Coverage portion of your plan, plus the co-insurances accumulated in the Coverage Gap, total $5,000 for 2018. You are now in catastrophic coverage and add PART D has no yearly dollar limit for what you pay for your medications.

The Catastrophic level of coverage begins at the point where you reach the TrOOP. From this point forward your out-of-pocket expenses in the Catastrophic level of your plan change in 2014 to a co-pay of $2.55 for generic drugs, and $6.35 or 5% co-insurance (whichever is greater) for brand names. Part D has no yearly dollar limit for what it will pay for your medications.

Introduction To Medicare

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Medicare Part A & B

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Medicare Part C

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Medicare Part D

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What Do They Cost?

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Compare Plans

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