Ashford Insurance

Medicare Part D Prescription Drug Plans

Prescription Drug Plans Made Easy

Medicare Part D Program Overview and History

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 established the Medicare Part D plan. It was put into effect in 2006. Medicare Part D offers voluntary drug benefits for about 56 million elderly and disabled individuals through the use of private healthcare plans approved under strict guidelines set by the federal government.

The purpose behind Medicare Part D is to help make prescription drugs more affordable for the elderly and disabled. Plans may provide coverage in the form of “stand-alone” Part D plans that cover just prescriptions, or they may be part of a plan that provides both Medicare health and prescription coverage, which is known as a Medicare Advantage plan (MA or Medicare Part C).

Medicare Part D Prescription Drug Plans is coverage for retail prescription drugs or the medications that you pick up at a pharmacy. This is a voluntary program which allows you to access medications at an affordable rate and insures yourself against any prescriptions you may need future.

All Medicare Prescription Drug plans cover the types of drugs most often prescribed for people enrolled in Medicare. This is decided by the U.S. government. But it’s up to each plan which specific brand name and generic drugs they will cover within those types. You can find this information by viewing a plan’s drug list.

The cost of Medicare Part D prescription or Medicare Advantage plans

The monthly premium that you will pay for each type of plan depends specifically upon your plan, the state you live in and a few other factors specific to your situation. You may pay anywhere from a few dollars a month to $100 or more for a Medicare Part D prescription plan. Medicare Advantage may charge nothing for added drug benefits.

Choosing your drug plan should never be based purely on the plan’s monthly premium because every plan has its own separate premium, drug formulary, and copay.  Just enrolling in the cheapest plan without checking the plan’s formulary could lead you into paying higher out of pocket costs for the year. This could be an expensive mistake especially if you learn later that the plan does not cover one of your medications. Remember, the least expensive monthly premium is not necessarily the least expensive plan when figuring in total prescription costs. Also, do not forget, all Part D plans, the benefits, formulary, pharmacy network, provider network, premium and/or copayments/co-insurance may change on January 1 of each year.

What does your Medicare Part D pan cover?

The prescription drugs that your Medicare Part D plan cover will vary from plan to plan. That is why you will almost always be provided with a list of formulary drugs and their amount that is covered by your plan.

It’s vital that you check with each Part D plan, as one plan may cover more than another plan. Some plans may not cover the prescriptions you need at all.

In addition to covering prescription drugs based on multiple tiers, many Medicare Part D prescription plans offer a separate tier for injectable drugs, like insulin. The cost sharing options for injectable tiers tends to be higher.

Extra Help

The federal government offers extra help with paying for your Part D drug plan and paying for your medications if you qualify and is based on income. This is what is called a Low-Income Subsidy. Anyone can apply for this from Social Security at any time. Help is only awarded based on proving low-income and limited resources. You must have an annual income that falls below 150% of the Federal Poverty Level based on your household size.

Beneficiaries who qualify may receive assistance with paying their monthly Part D premiums, their annual Part D deductible, and also their co-payments on retail medications. There are different levels of qualification, and your subsidy level generally determines how much assistance you will get towards your premiums. Someone qualifying with a full subsidy would have 100% of their Part D premium paid for, up to the benchmark allowed by Medicare for that particular year.

A drug list—sometimes called a formulary—is a list of drugs covered by a plan.

  • A drug list can change from year to year.

    Part D plans may add or remove drugs from their drug list each year. Changes may also be made during the year, for example, if a drug is taken off the market. Your plan will let you know if a change affects a drug you are taking.

  • Many Part D plans have a tiered drug list where drugs are divided into groups based on cost.

    In general, drugs on low tiers cost you less than drugs on high tiers. Plans may charge a deductible for certain drug tiers and not for others, or the deductible amount may be different depending on the tier.

There are rules for some prescription drugs that limit how and when a plan will cover them. These are called requirements or limitations. If you don’t follow these rules or don’t get permission from the plan saying you don’t have to (called an exception), you may have to pay the full cost of the drug out of your own pocket.

The Gap

The Medicare coverage gap, or “Donut Hole“, is a phase of your Medicare Part D Prescription Drug Plan benefit when there is a gap in the prescription drug coverage. During this phase, you will have to pay more for your drugs, until you reach the catastrophic coverage phase. This coverage gap is reached when your initial phase total drug costs (what you and your plan pay) reach a $3,820 for 2019. You then pay for your prescriptions out of pocket until entering the plan’s catastrophic coverage phase. This third phase is when your total out-of-pocket costs, including the annual deductible and co-payments/coinsurance, reach $5100 in 2019.

Some Texas Medicare Advantage Prescription Drug plans and stand-alone Medicare Prescription Drug Plans provide partial or full coverage during the coverage gap. For example, some plans may not have a gap at all, while others may offer generic drug coverage in the gap. Plans with gap coverage may charge a higher monthly premium, so you should only consider one of these plans if you have high prescription drug costs and know you will reach the coverage gap.

There is a Late Enrollment Penalty for not having creditable Prescription coverage. 

Ashford Insurance also offers Medicare Advantage (Part-C) and Medicare Supplements (Medigap) insurance Plans.

Sarah began working in the healthcare industry in 2001, where she worked for many years with elderly Alzheimer and Dementia patients. From there she worked as a Group Benefits Administrator with a local healthcare company in the Human Resource Department for a period of 10 years. Since then, she has decided to work in the Medicare insurance industry full time and has joined the family business, Ashford Insurance, as a Medicare Insurance Agent.