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Medicare is a federal health insurance program primarily for seniors that provides prescription drug coverage. But how do seniors ensure they're getting the prescription drug coverage they need?
There are two parts of Medicare, the federal health insurance program primarily for seniors that provides them coverage for the prescription drugs they need. You can buy a Medicare Advantage plan (aka Medicare Part C), which is a private alternative to Medicare Part A and Medicare Part B (aka Original Medicare). Alternately, you could keep Original Medicare and buy a separate Medicare Part D prescription drug plan (PDP).
Original Medicare — Medicare Part A and Medicare Part B — is mainly limited to hospital and doctor coverage, respectively. It doesn’t cover prescription drugs under most circumstances (more on this below).
To get prescription drug coverage, you need to buy a Medicare prescription drug plan. You have two major options.
Also known as Prescription Drug Plans (PDPs), Medicare Part D provides standalone prescription drug coverage through program-approved private health insurers. Part D plans can be added to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans and Medicare Medical Savings Account (MSA) plans.
Learn more about Medicare Part D.
Medicare Part C plans are also sold through program-approved private health insurers. However, they must cover everything Original Medicare does and usually cover many health care services it doesn’t, including prescription drugs. You must have Original Medicare to join a Medicare Advantage Plan.
If you enroll in a Medicare Part C prescription drug plan — better known as Medicare Advantage Prescription Drug plans (MAPD), — you probably don’t need a Medicare Part D plan. In fact, you usually can’t purchase one.
Learn more about Medicare Part C.
The drugs that are covered by any Medicare prescription drug plan depends on your specific plan and insurer. They will provide tier-based formularies listing covered medications. The higher the tier, the higher the copay, and vice-versa. Medicare Part D also covers commercially available vaccines such as Tdap vaccine, shingles vaccine and meningococcal vaccines.
You should start by comparing Part D plans and Medicare Advantage plans where you live and whether they cover the drugs you need. Is the Medicare Advantage plan worth the added cost, or are you comfortable adding a standalone Part D plan to Original Medicare? Do you qualify for Extra Help, a program that helps low-income beneficiaries pay for Medicare Part D, but does not work in tandem with Medicare Part C?
The priority should be finding the highest quality plan at the lowest possible rate, whether its a Medicare Part C or Part D plan. (Our partner Via Benefits can help you compare and buy Medicare plans in your area.)
Once you choose your plan, here are the ways you can sign up, per Medicare:
Enroll on the Plan Finder
Complete paper enrollment
Call the plan
Remember, there are only certain times when you can sign up for Medicare prescription drug coverage.
New Medicare recipients have seven months to buy coverage, starting three months before the month they turn 65.
If you go 63 days or more without prescription drug coverage after that initial enrollment period, you could pay the Medicare Part D late enrollment penalty. This fee is waived if you have one of the following:
You can also apply or make changes to your Medicare Part D or Medicare Advantage plans during certain times of the year with:
Open enrollment runs from Oct. 15 to Dec. 7 each year. It’s also called the annual election period.
Special enrollment which is granted due to extenuating circumstances, like moving, or a loss of coverage. It’s also known as a special election period.
Medicare Advantage Disenrollment period the month and a half period (January 1 to February 14) each year where you can drop your Medicare Part C plan, revert back to Original Medicare and add a Medicare Part D plan.
How much you pay depends largely on which prescription drug plan you choose, where you live and whether or not you qualify for a cost-assistance program, like Medicare Extra Help.
However, the average basic monthly premium for a 2019 Medicare Part D plan is $32.50, per the Centers for Medicare and Medicaid Services (CMS). As of 2018, the highest deductible a Part D plan could charge is $405.
In addition, Part D enrollees must also pay copays and/or coinsurance. Copays are the fixed amount you pay for prescriptions, and coinsurance is a percentage of the price of your prescription. Typically, Part D plans require coinsurance for higher-tiered drugs like tiers 3 and 4.
There’s also a Part D “coverage gap”, or the maximum amount an insurer pays out for prescription drug expenses on behalf of the Medicare beneficiary over the course of a year. In 2018, the coverage gap amount was $3,750. Beneficiaries exit the coverage gap once they’ve spent over $5,000 out-of-pocket on prescription drug expenses, including prior copays/coinsurance and their yearly deductible.
All Medicare Part C beneficiaries must enroll in Original Medicare, so they have to pay the Medicare Part B premium, which is around $134 per month. The total cost of a Medicare Advantage plan is capped at $6,700 a year.
Learn more about the total cost of Medicare.
Medicare Part B generally doesn’t cover prescription drugs. However, it will provide coverage for certain drugs related to outpatient care under limited circumstances. To give you a better understanding of what drugs Part B would cover, think of the (legal) kind of drugs you wouldn’t feel comfortable taking by yourself, or at the very least, without the proper guidance of a medical professional.
Here’s some common prescription drugs and limited instances covered by Part B:
Drugs infused with durable medical equipment
Infusion pumps and some medicines used in infusion pumps, and other equipment like nebulizers are all covered as durable medical equipment that your doctor prescribes for use in the home.
Antigens prepared by a doctor
Medicare helps pay for antigens if they’re prepared by a doctor and they’re given by a properly trained individual (or the patient if properly instructed) under supervision.
Injection and infusible drugs
Part B covers most injectable and infused medication given by a licensed medical provider.
Medicare helps pay for nutrients for people who can’t properly take in nutrition through their intestinal tract or they’re not able to take food by mouth.
Flu shots, Hepatitis B shots, pneumonia shots and other vaccines when they’re directly related to an illness or injury. Learn more about Medicare vaccine coverage.
If you’re on federal retirement benefits, you are automatically enrolled in Original Medicare on the first day of the month you turn 65. You can then buy a Medicare Part D plan and/or Medicare Plan C plan. If you aren’t eligible for automatic enrollment, you must apply for Medicare through the Social Security Administration. The easiest way to do so is online.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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