The Ins & Outs Of Medicare Prescription Drug Coverage

Sunday, 3 Mar 2013, 9:09:00 AM

Ron Pollack

Ron Pollack, Families USA Executive Director
Mirror Archives
Ron Pollack, Families USA Executive Director

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,, or by calling 1.800.MEDICARE

(633.4227). Some states also have their own programs to help people with high

drug costs.

Where can I get help choosing a plan?

Selecting the right plan can be difficult. Try the Plan

Finder at, 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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