Part D of Medicare–Prescription Drug Plans, are available to any Medicare beneficiary who has Part A and/or Part B of Medicare. These plans are not obtained directly through Medicare, but through private companies contracted and authorized by Medicare to offer them. They are paid by a monthly premium directly to the insurer.
Medicare beneficiaries are not required to enroll in a Part D Prescription Drug Plan (PDP), although those who do not get a plan will be subject to a penalty if they enroll at a later date.
Insurance companies offering Part D plans must provide a basic benefit according to Medicare’s standards. Plans may offer enhanced coverage for an additional premium. For example, many plans eliminate or reduce the yearly deductible established by Medicare. Some offer generics at low-or-no cost.
Most Medicare Advantage plans have a Part D Prescription Drug plan built in. Beneficiaries with these plans may not enroll in a stand-alone Prescription Drug plan. Many Medicare eligibles may receive a prescription drug benefit in other ways. These include commercial plans, a group retirement benefit, and the Veteran’s Administration.
Medicare requires that these plans also meet the basic benefit to be considered “credible”–that is, at least as good as, or better than, Medicare. If their plan is not credible, then the beneficiary is expected to obtain a Part D plan or incur a future penalty.
All prescription drug plans incorporate a formulary. A formulary is the list of drugs that a plan will cover. If a medication is not on the drug plan formulary, then the beneficiary will pay full or retail price for the drug. Note that formularies can change yearly. A medication covered this year may not be covered next year or may be covered at a different price.
Part D Prescription Drug plans can only be selected during qualified election periods. For example, when first eligible for Medicare a beneficiary may enroll during the Initial Enrollment Period (IEP); Special Election Periods (SEP’s), such as when a beneficiary moves, are available throughout the year and are situational; yearly, plans can be changed during the Annual Election Period (AEP)–October 15th through December 7th.
There are programs available to assist with the cost of medications. One popular program is the Low Income Subsidy–or Extra Help, available through Social Security. Other programs may be available through the state, advocacy groups, or pharmaceutical manufacturers.
Due to the rules and complexity of plans, beneficiaries should consult with a trusted advisor yearly.