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As a Medicare beneficiary in California, you may choose to enroll in a Medicare plan that includes prescription drug coverage to help cover your out-of-pocket prescription drug costs. Medicare plans that include prescription drug coverage are offered by private insurance companies contracted with Medicare. Costs may vary among Medicare plans that include prescription drug coverage, and availability may vary depending on your place of residence and zip code. Most plans require you to pay a monthly premium, annual deductible, and copayment or coinsurance.
If you’re already enrolled or are eligible to enroll in Medicare Part A and Part B, in California, as in all states, you may choose to enroll in one of two types of Medicare plans that include prescription drug coverage. The first type is a stand-alone Medicare Part D Prescription Drug Plan (to work alongside Medicare Part A and B). The second type may be available through Medicare Advantage (Medicare Part C), and are called Medicare Advantage Prescription Drug plans.
Medicare plans that include prescription drug coverage each have their own lists, or formularies, of covered prescription drugs. A formulary lists prescription drugs in different categories (called tiers), each with a different cost. The lowest tier includes the most affordable drugs, and the highest tier lists the more expensive medications. In certain cases, your doctor or health-care provider may determine that a prescription drug in a higher tier is necessary for your medical condition instead of a similar prescription drug in a lower tier. If so, you or your prescriber can ask your plan for a tiering exception to get lower cost-sharing for the higher tier prescription drug.
In California, as in other states, Medicare plans that include prescription drug coverage generally allow you to choose between brand-name prescription drugs and generic prescription drugs. According to the Food and Drug Administration, generic prescription drugs are required to have the same active ingredient with the strength and dosage form, and these prescription drugs have been proven to perform the same as the brand-name prescription drugs. A big difference between the two is that generic prescription drugs usually cost substantially less than the brand-name versions. If your pharmacy doesn’t have the prescription drug your doctor prescribed, you may be able to use a similar prescription drug, but make sure to discuss any substitutions with your doctor or health-care provider.
You must either have or be eligible to join Medicare Part A and/or Medicare Part B in order to sign up for Medicare Part D prescription drug plan, and you must reside in the service area of your plan. These are your opportunities to enroll in Medicare Part D coverage:
If you remain without creditable prescription drug coverage for 63 days or more after your Initial Enrollment Period ends, you may be subject to a late-enrollment penalty for Medicare Part D if you ever do decide to get this coverage. In California, as in the rest of the United States, this penalty is calculated using 1% of the national base beneficiary premium and the number of full months you were eligible for Medicare Part D but didn’t join. This amount is then added to your Medicare Prescription Drug Plan monthly premium. The national base beneficiary premium may increase each year, which means your late-enrollment penalty may also increase annually.
You can get Medicare prescription drug coverage in either of two ways. A stand-alone Medicare Part D Prescription Drug Plan can work alongside your Medicare Part A and Part B coverage to help cover costs for prescription drugs, while a Medicare Advantage Prescription Drug plan combines health and prescription drug coverage into a single plan. Medicare Advantage (also known as Medicare Part C) offers at least the same coverage as Medicare Part A and Part B (except for hospice care, which Medicare Part A still provides), and sometimes carries extra benefits like vision, hearing, and dental services, all for a single premium. You must still pay your Medicare Part B premium in addition to any premium required by the Medicare plan that includes prescription drug coverage.
For Medicare plans that include prescription drug coverage in California, it’s always a good idea to consider your medication needs, since it’s your prescription drug costs (rather than your premiums or deductibles) that generally drive your out-of-pocket expenses the most.
It may also be a good idea to review your Medicare plan that includes prescription drug coverage at the end of each year to find out if there are any changes to your coverage. In California and the rest of the United States, Medicare plans that include prescription drug coverage may make changes to their premiums, copayments, deductibles, and prescription drug formularies every year (if the plan makes changes, they will notify you when necessary). This means that the plan you’re enrolled in today may not be the one best suited to your health needs tomorrow.
To familiarize yourself with other Medicare insurance plans available in California, access the following resources:
This article is for informational purposes only. Nothing in it should be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.