Understanding Medicare Prescription Drug Plans and the Role They Play in Protecting Your Health
Medicare prescription drug plans can make it more affordable to purchase the medications you or your spouse need to maintain your health and quality of life. Of course, you’ll need to know more about these plans to ensure that you can make an informed decision.
In many cases, medication is needed to combat chronic conditions and make life livable. However, paying for your medications can be incredibly costly even with Medicare insurance. Thankfully, there are ways to offset those costs. In this article, we’ll cover:
- An Overview of Medicare Prescription Drug Plans (Part D)
- How Prescription Drug Plans (PDP) Work
- Who Qualifies for PDPs
- How Much PDPs Cost
- How to Choose a Medicare Prescription Drug Plan
What Are Medicare Prescription Drug Plans?
Medicare prescription drug plans are only included in one specific component: Medicare Part D. Let’s quickly clarify:
- Medicare Part A – Covers hospital stays.
- Medicare Part B – Covers physician fees.
- Medicare Part C – Covers things like vision and dental health.
- Medicare Part D – Covers prescription medications.
The only way you can get Medicare to cover any of your prescription drug costs is to enroll in Part D. However, it’s not as simple as enrolling in this program. There are multiple Medicare prescription drug plans available through the plan and they vary based on factors such as whether you’re already enrolled in Medicare Part A or C, your geographic area, and more.
The federal government has done a good job of helping citizens gain access to the information they need to choose between the various options out there, learn what the various plans cover, and how they will affect your health care.
How Do Medicare Prescription Drug Plans Work?
It’s important to note that each plan is different. And, because there are dozens of plans, it’s impossible to give a breakdown of how each one operates. Thankfully, there are several key similarities shared between all of these plans. Here’s what you need to know:
- These plans are supplemental–they will not cover all of your prescription drug costs.
- These plans are offered through private insurers.
- Your Medicare prescription drug plan requires low out-of-pocket costs each month. The amount depends on the plan you choose.
- It’s possible that you might pay a different amount for the same medication in different plans, because the prices are set by private insurers.
- There is a coverage gap with all Medical prescription drug plans. Once you reach a specific amount per year in covered drugs, a temporary limit is imposed.
- While the amount changes per year, Medicare currently only pays 35% of the cost of brand-name medications and 56% of the cost of generics while you’re in the coverage gap.
Who Qualifies for Medicare Prescription Drug Plans?
Like Medicare Part A, B, and C, you must meet specific qualifications in order to enroll in Part D. The most important consideration is that you need to meet the qualifications for enrollment in Medicare Parts A and B in the first place:
- You must be age 65 or older OR you are receiving SSI and have been for at least two years, OR you are receiving a disability pension from the Railroad Retirement Board, OR you have Lou Gehrig’s disease, OR you have permanent kidney failure.
- If you are enrolling at age 65 and up, you must also be a U.S. citizen and have worked enough to be eligible for Social Security. You’ll need to have earned at least 40 credits from working a minimum of 10 years. You and/or your spouse may also be a government employee who paid Medicare payroll taxes while working, even if you did not pay into Social Security. However, note that you don’t need any credits to qualify for Part B or Part D–only Part A.
- If you don’t have enough credits and cannot enroll in Part A in other ways, you can pay for the plan. The cost varies by the number of credits you have earned. You can also get coverage by paying for Part B.
Additional Steps for Qualifying for Medicare Prescription Drug Plans
In addition to the requirements above, you must also follow one of two possible paths to Part D coverage. First, you can simply add Part D to your existing Part A and B. Second, you can add Part D coverage through a Medicare Advantage plan (Part C), or another Medicare health plan that offers coverage for prescription medication.
How Much Do Medicare Prescription Drug Plans Cost?
The cost you’ll pay for Part D coverage varies depending on several factors. If you purchase Part D in another way, your costs will be higher. You also need to consider the deductible that you’ll have to pay. This varies greatly but generally will be several hundred dollars. Note that not all plans have deductibles, so choose carefully when selecting your coverage.
Of course, there are other considerations that will affect the price you pay for your medication coverage. These include:
- The cost of copays.
- The cost of coinsurance.
- Whether you’re within the coverage gap or not.
Which Medicare Drug Plan Should You Choose?
Ultimately, choosing the right coverage for your health care and quality of life is not something you should rush into. Yes, you can choose a low-cost plan that offers excellent affordability, but that could result in higher copayments and additional costs. The best idea is to speak with a healthcare professional to make an informed comparison.
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