September 17, 2014
What is Medicare Part D?
Medicare Part D was created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. It makes prescription drug coverage available to all individuals with Medicare coverage.
A Medicare beneficiary can get prescription drug coverage through one of two options (and you must continue paying your Medicare Part B premium no matter which you choose):
Medicare Part D Prescription Drug Plans, also known as “PDPs,” are stand-alone prescription drug plans that are sold by private insurance companies with a Medicare contract. Medicare beneficiaries can sign up for a PDP if they would like to add Part D drug coverage to their Original Medicare coverage. Certain Medicare Advantage plans, such as Cost Plans, Private Fee-for-Service (PFFS) plans, and Medical Saving Account (MSA) plans might allow you to add a stand-alone PDP to this coverage, although these situations may vary. Anyone enrolled in Medicare Part A and/or Medicare Part B is eligible to enroll in a Medicare Part D plan.
Medicare Advantage Prescription Drug Plans, also known as “MA-PDs,” are Medicare Advantage health plans that offer prescription drug coverage. These plans combine the coverage of Original Medicare, Part A and Part B (excluding hospice care, which continues to be covered by Medicare Part A), with the Part D prescription benefit, meaning that all of your Medicare coverage is housed under one plan. To enroll in this type of plan, you need to be enrolled in both Medicare Part A and Part B.
In either scenario, a Medicare beneficiary would be required to pay the monthly premium charged by the plan and these premiums vary by insurance provider.
Are my prescriptions covered?
Each Medicare Part D drug plan has its own list of covered prescription drugs called a “formulary.” Medicare requires all Part D prescription drug plan options to cover at least two or more medications within each therapeutic category (e.g., antidepressant, antibiotic). Medicare specifically excludes Part D plans from covering over-the-counter drugs and medications treating fertility, hair growth, and some other conditions.
Since each Medicare Part D plan can cover different drugs, it is essential to evaluate all available Medicare Part D plans in your area to determine:
- If your drugs are covered.
- The estimated out-of-pocket expenses you should expect to pay during the year for your drugs and plan premiums.
- If there are any limitations placed on your drugs (e.g., monthly quantity limits, prior authorization).
Which Medicare prescription drug coverage should I choose?
There is no easy answer to this question. The number of available Medicare Part D stand-alone drug plans can vary by area, and each plan might offer different coverage options. There may not be a single plan that would fulfill the needs of every beneficiary looking to enroll, and it is recommended that you consider all of the options before making a decision.
As Medicare beneficiaries ask “What is the best Medicare Part D drug plan?” they should consider all of the prescriptions they currently use and look for a plan that provides coverage for as many of them as possible. If multiple plans offer an amount of coverage that is satisfactory, compare the prices at which the prescriptions are offered. Plans may also feature different pharmacy availability, meaning your pharmacy of choice may not be covered by a plan. This is another aspect to consider when choosing a Part D plan.