Summary: Medicare Part D is the prescription drug coverage “part” of Medicare. It’s optional, and available from private insurance companies that contract with Medicare. It’s important to remember that while you might get enrolled into Medicare Part A and Part B when you’re eligible, you’re generally not automatically enrolled in Part D.
How do you get Medicare Part D?
Before we get into how much Medicare Part D costs, here’s a brief summary on how you get this coverage. You can get Medicare prescription drug coverage in either of these ways:
- As a stand-alone Medicare Part D Prescription Drug Plan to work alongside your Original Medicare (Part A and/or Part B) coverage
- Included in a Medicare Advantage Prescription Drug plan
How much does Part D coverage cost?
Since private, Medicare-approved insurance companies offer Medicare Prescription Drug Plans, how much Part D costs may vary widely from one plan to another. Some Medicare Part D costs for a stand-alone plan or a Medicare Advantage plan might include:
- A monthly plan premium
- An annual deductible (this amount can be no higher than $435 in 2020
- A coinsurance or copayment for each covered prescription drug.
Please note that not every Medicare Prescription Drug Plan has a monthly premium, and some plans might not have deductibles.
To keep your Medicare Part D costs as low as you can, you might want to ask your plan if there’s a preferred pharmacy it uses, or if you can save money by ordering your medications by mail.
What other Medicare Part D costs should I know about?
Here are some possible Medicare Part D costs that might not affect you, but may be good to know about.
- Late enrollment penalty – Although Medicare Part D is optional, if you don’t sign up for a Medicare Prescription Drug Plan when you’re first eligible, you might pay a late enrollment penalty if you decide to enroll later.
- Coverage gap changes in 2020 – If you need many medications, or expensive ones, be aware that you might pay more for your medications once you’ve spent a certain amount in one calendar year. If you and your Medicare Prescription Drug Plan exceed the initial coverage limit ($4,020 in 2020), you’ll enter the Medicare Part D coverage gap (donut hole). Although this gap officially closes in 2020, you might still need to pay a different amount after you spend past the initial coverage limit. Read more about your costs in the coverage gap.
- Part D IRMAA – If your income is over a certain amount, you might have to pay more for a Medicare Prescription Drug Plan. Read about the Part D IRMAA adjustment amount. IRMAA stands for Income-Related Monthly Adjustment Amount.
- It’s easy to do your own search for Medicare plan options anytime on your own – you can even enter your medications to see if a plan may cover them.
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