Medicare Part D Eligibility

Medicare Part D is a collection of plans that cover prescription drugs. Although these plans are set forth by the Federal government, they are issued by private insurance companies. Each Medicare Part D plan will have different premiums, copayments, and medication coverages.

When choosing your Medicare Part D drug coverage, it is important to try not to focus on only finding the lowest monthly premium. Consider whether Part D plan covers your essential prescriptions. It’s also important to determine what copayments apply.

Who Should Enroll in Medicare Part D?

As with Original Medicare, you become eligible for Medicare Part D if you are

• age 65 or older,
• are younger than age 65 with a qualifying disability, or
• have been diagnosed with end-stage renal disease.

As long as you do not have other drug coverage, we encourage you to enroll in a Medicare Prescription Drug Plan when you are eligible. If you do not have creditable prescription drug coverage and you fail to enroll during your initial enrollment period, you may have to pay a Part D Late Enrollment Penalty. This penalty will be added to your monthly Part D premium.

There are two ways to receive a Medicare drug plan. It can take the form of an individual plan that is added to your Original Medicare, or you can choose to receive your coverage through a bundled, Medicare Advantage Plan.

Medicare Part D Costs

Medicare Part D costs will depend on a variety of factors including:

• Which plan is chosen
• Which prescriptions you take
• Which pharmacy you use
• Where you live (county and zip code)

When deciding on a Medicare D plan, one of the first aspects you will look at is your monthly premium. Most premiums will cost between $17 and $76.

You will also have a yearly deductible. This deductible is limited by Medicare to the amount of $435, meaning that you will have to pay $435 out of pocket before your plan will cover anything.

In addition to these premiums and deductibles, you will also be responsible for copayments for each and every prescription. Most people agree that these copayments on each prescription amount to their largest out-of-pocket expenses related to a Medicare Drug plan.

Will Your Prescriptions Be Covered?

There is no single plan that will cover all, or even most, prescription drugs. In addition, there are laws set that prevent certain drugs from being covered at all, including:

• Some sedatives
• Tranquilizers
• Sleeping pills
• Weight loss/gain drugs
• Over-the-counter medications

Each Medicare drug plan has a list of covered drugs called a “formulary”. Each formulary includes both brand-name and generic drug coverage. They also include at least two drugs in the most commonly prescribed categories, helping to ensure that people with different medical conditions can get access to the prescription drugs they need. While a formulary may not cover your specific drug, there should be a similar drug available.

Under each of these formularies, covered drugs are then divided into different levels that are called “tiers”. These tiers were designed to help lower costs. For example, the lower the tier, the lower the cost of your copayments. The higher the tier, the higher the cost of your copayment.

Coverage Restrictions

In addition to formulary and tiered drug lists, there may be other restrictions on your regular medications.

Generic Only

Some plans only provide coverage for generic drugs, not brand-name prescriptions.

Substituted Drug

Some plans will be allowed to substitute a different, similar drug in place of the prescribed drug at a higher cost.

Prior Authorization

This means that you or your prescriber must contact your plan with proof that the drug is medically necessary to receive coverage.

Step Therapy

Step therapy is another type of prior authorization that will require you to try certain, less expensive drugs on your plan’s formulary that have previously shown proven effectiveness before moving you up to a more costly medication.

Coverage Gaps-The Donut Hole

Unfortunately, the majority of Medicare drug plans have a coverage gap that puts a temporary limit on the amount the plan will pay and in turn, increases your out-of-pocket spending. This coverage gap is also known as the “donut hole”.

Not everyone will reach the donut hole. The coverage gap only begins once you reach your plan's initial coverage limit, set at $4,130 for the year 2021. Being on the Extra Help program that assists with premiums, deductibles, and copayments also prevents you from entering the donut hole.

When you enter the coverage gap, you will be responsible for paying no more than 25% of the costs for your plans covered brand-name prescription drugs. To assist you in getting out of the “donut-hole”, almost the full price of the drug will be counted as out-of-pocket costs, not just the percent that you pay.

To get out of the coverage gap, you must spend $6,550 out-of-pocket. You will then be automatically enrolled in “Catastrophic Coverage”, assuring you only pay a small amount of coinsurance or copayments for the remainder of the year.

Choosing the Best Medicare Part D Plan

There are a few steps you can take to help make this decision as easy as possible.

Research what plans are currently available to you. Begin by visiting the official Medicare website and entering some personal information. The website will then be able to provide you with a comprehensive list of all the Medicare Drug plans located near you. By consulting this list, you can also sort through to match your personal prescription drugs with the prescriptions that those plans cover.

Deciding on the best Medicare Part D plan for you is not an easy choice to make. If you feel uncomfortable making this complex decision on your own, please reach out to one of our highly trained staff here at SAO by entering your information here. We have all the information you need to help you make an informed decision.

As with Original Medicare, you become eligible for Medicare Part D if you are

• age 65 or older,
• are younger than age 65 with a qualifying disability, or
• have been diagnosed with end-stage renal disease.

As long as you do not have other drug coverage, we encourage you to enroll in a Medicare Prescription Drug Plan as soon as you are eligible. If you do not have creditable prescription drug coverage and you fail to enroll during your initial enrollment period, you may have to pay a Part D Late Enrollment Penalty. This penalty will be added to your monthly Part D premium.

There are two ways to receive a Medicare drug plan. It can take the form of an individual plan that is added to your Original Medicare, or you can choose to receive your coverage through a bundled, Medicare Advantage Plan.