Medicare Prescription Drug Coverage Part D
Helps with the cost of prescription drugs
Two ways to get coverage:
- Add a standalone Part D plan to Original Medicare
- Choose a Medicare Advantage plan that includes prescription drug coverage Plans offered by private insurance companies
What does Medicare Part D Cover?
- Types of drugs most commonly prescribed for Medicare beneficiaries as determined by federal standards
- Specific brand name drugs and generic drugs included in the drug list (formulary)
- Commercially available vaccines not covered by Part B
What is the Formulary? List of covered Drugs
- Drugs are grouped into Tiers based on costs
- Deductibles may be charged by tier level
- Usually, the lower the tier, the lower the cost
Items that count towards the coverage gap
- Your yearly deductible , coinsurance, and copayments
- The discount you get on brand-name drugs in the coverage gap
- What you pay in the coverage gap
Items that don't count towards the coverage gap
- The drug plan premium
- Pharmacy dispensing fee
- What you pay for drugs that aren’t covered
Part D: what is the Donut Hole?
- Coverage Stage
- Annual Deductible = pay up to plan deductible
- Initial Coverage = up to $4130
- Donut Hole – Coverage Gap = up to $6350 out-of-pocket costs (Once you reach the coverage gap, you'll pay no more than 25% of the cost for your plan's covered brand-name prescription drugs)
- Catastrophic Coverage = pay till end of year
(Once you've spent $6,350 out-of-pocket in 2021, you're out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.)
Most Medicare drug plans have a coverage gap (also called the "donut hole"). This means there's a temporary limit on what the drug plan will cover for drugs.
The good news is Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you and your plan have spent $4,130 on covered drugs in 2021, you're in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.