Since 2006, everyone with Medicare has had access to
outpatient prescription drug coverage. As there are a lot of options and
choices to be made, the path to that coverage can be complicated. In an effort
to lessen some of those complications, here are answers to some of the most
commonly asked questions about Medicare prescription drug coverage.
What are the different ways that Medicare offers
prescription drug coverage?
Most people with Medicare get coverage through Medicare
Part D. If you have Original Medicare (Parts A and B), you can add a Medicare
Part D prescription drug plan for an additional premium. If you have a Medicare
Advantage plan (sometimes called Medicare Part C), it probably includes Part D
drug coverage, but you should check the plan to be sure. Some people have
prescription drug coverage through a former employer. If this coverage is as
good as or better than Part D coverage, you can keep it and you don’t need to
sign up for Part D.
When can I join or change drug plans?
When you first become eligible for Medicare (usually
around your 65th birthday), you can sign up for a Part D plan or a Medicare
Advantage plan when you enroll in the rest of Medicare. Be sure to sign up
within three months of your 65th birthday to avoid a penalty. Then, each year
between Oct. 15 and Dec. 7, Medicare has an open enrollment period during which
you can change Part D plans or switch in to or out of a Medicare Advantage
What is a formulary?
A formulary is a list of medicines that your
prescription drug plan covers. This list determines how much you will have to
pay out of pocket for a prescription (your copayment). The amount varies
depending on the category of drug: Generics are usually the cheapest, preferred
brand-name drugs are more expensive, and non-preferred brand-name drugs are the
most expensive. Some plans have four or more levels of copayments. Drugs that
are not listed on the formulary are not covered at all. If drugs that you currently
take aren’t on a plan’s formulary, or if they are very expensive, you should
check out other plans.
What will I pay in premiums, deductibles, and
Premiums for prescription drug plans vary widely. In
2013, the national average is $30 per month, but there is a big range across
geographic areas and for different Medicare Advantage and Part D plans.
Deductibles, which refer to how much you must pay out of pocket every year
before your plan will kick in, range from $0 to $325 in 2013. Copayments vary
from plan to plan.
So what is the “doughnut hole?”
The doughnut hole – a feature of Medicare Part D since
2006 – is a big gap in drug coverage. Before the Affordable Care Act became
law, when you reached an initial limit of total drug expenses ($2,970 in 2013),
your drug coverage stopped – meaning you had to cover 100 percent of your drug
costs – until you spent $3,764 out of your own pocket.
But there’s good news: Thanks to the Affordable Care
Act, the doughnut hole is shrinking. In 2013, you will save 52.5 percent on
brand-name drugs and 21 percent on generics at the pharmacy while you are in
the doughnut hole. By 2020, the doughnut hole will be completely eliminated.
What if I can’t afford a Part D plan?
You might qualify for the Extra Help program that’s run
through Social Security. You can find out more at the Social Security website, www.socialsecurity.gov/prescriptionhelp, or by calling 1.800.MEDICARE
(633.4227). Some states also have their own programs to help people with high
Where can I get help choosing a plan?
Selecting the right plan can be difficult. Try the Plan
Finder at Medicare.gov, or call 1.800.MEDICARE (633.4227). For personalized
assistance, ask for a referral to a counselor at your state’s SHIP program.
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