What Is Medicare Prescription Drug Coverage?
Medicare Part D Plans Made Simple
What Is Medicare Prescription Drug Coverage?
Texas Medicare Part D Prescription Drug Coverage 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.
Medicare Part D costs vary depending on the specific drug plan chosen. Generally, you are responsible for paying a monthly plan premium, and then deductibles and copays (or coinsurance) for your medications. People with higher incomes may have to pay more for the cost of their plan.
There are many Medicare Part D plans to choose from, with plans ranging from $15.00 – $100.00 on up. 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 co-payments/co-insurance may change on January 1 of each year.
Extra Help
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 you’re 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.
The Gap – (Donut Hole)
Donut Hole (Coverage Gap) Explained
The coverage gap commonly referred to as “The Donut Hole” has several phases.
The coverage gap is a temporary limit on what most Part D Prescription Drug Plans or Medicare Advantage Prescription Drug plans pay for prescription drug costs. While you’re in the coverage gap, you might pay higher costs for brand-name and generic drugs. Below we’ve described each phase:
Deductible phase: For most stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans, you’ll pay 100% for medication costs until you reach the yearly deductible amount (if your plan has one). In 2023 the deductible is $1,600.
Initial coverage phase: After you’ve reached the deductible, you’ll enter the initial coverage phase, where you will pay the plan’s cost share for covered medications. For example, if your plan benefit includes a 25% coinsurance in this phase and you’re taking a medication that costs $400 a month, your out-of-pocket cost would be approximately $100 a month.
Coverage gap, also known as the “donut hole”: begins if you and your plan spend a combined $4,600 in 2023 as described above. While in the coverage gap, you’ll typically pay 25% of the plan’s cost for brand-name drugs and for generic drugs in 2023. You’re out of the coverage gap once your yearly out-of-pocket drug costs reach $7,400 in 2023.
Catastrophic coverage phase: Begins if your out-of-pocket costs reach $7,400 in 2023. During the catastrophic coverage phase, you’ll only pay a small coinsurance or copayment for covered prescription drugs for the remainder of the year.
Some Medicare Advantage Prescription Drug plans and stand-alone Medicare Prescription Drug Plans to 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.
Learn about the Medicare Part D Late Enrollment Penalty Here