What is Part D?
Part D is Medicare drug coverage. An easy way to remember is “D for drug”. Part D is a component of the Medicare program that provides prescription drug coverage to beneficiaries. It is offered by private insurance companies that are approved by Medicare, and beneficiaries can choose from a variety of plans that offer different levels of coverage.
Part D covers both brand-name and generic prescription drugs, and the medications that are covered are determined by each individual plan’s formulary. Beneficiaries pay a monthly premium for their Part D plan, as well as any applicable deductibles, copayments, and coinsurance.
Do I Need Part D?
The answer to this questions depends on your situation. It is important to note that if a beneficiary does not enroll in a Part D plan when they are first eligible, they may face a penalty if they decide to enroll later. This penalty is calculated based on how long the beneficiary went without drug coverage, and it is added to the monthly premium for as long as the beneficiary has a Part D plan.
What is the donut hole?
The Phases of Medicare Drug Coverage Explained.
Medicare drug coverage works in phases, and this information applies to most Medicare drug coverage, including Medicare Advantage Plans. Here is an outline of how these phases work.
Deductible Phase: If your Medicare drug coverage includes a deductible, then many of your Medications could cost more until that deductible is met.
Initial Phase: Many plans do not have a deductible, and Medications often begin in this phase. Each plan has a different formulary of drugs, so if you have questions about your coverage then don’t hesitate to talk to one of our agents!
Coverage Gap (Donut Hole): Medicare Part D includes a coverage gap, commonly referred to as the “donut hole.” This coverage gap begins once the total cost of a beneficiary’s medications reaches a certain amount each year. This amount is subject to change. Unfortunately, many of the medications that our clients need become quite expensive in this phase. For example, Eliquis is a high quality medication that many of our clients take. It is a blood thinner, and often contributes to putting our clients in the donut hole.
Catastropic Coverage: Medicare Part D catastrophic coverage is the phase of coverage that beneficiaries enter once they have spent a certain amount of money out-of-pocket on their prescription drugs in a given year. This amount is subject to change.
Once the beneficiary reaches the catastrophic coverage phase, they will only be responsible for paying a small coinsurance amount or copayment for their medications for the rest of the year. This means that the insurance company will cover the majority of the cost of the medications.
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