What is a Medicare Prescription Drug plan?

Original Medicare (Parts A and B) does not include prescription drugs that you take regularly. You will need a Medicare Part D prescription drug plan. If you do not have a drug plan, you will pay for all drug costs at retail prices.

How to Get a Medicare Part D Prescription Plan

If you plan to use Medicare Part A and Part B or add a Medicare Supplement, you must buy a separate Medicare Part D plan. Medicare does not permit supplement plans to include prescription drugs either.

However, Medicare Advantage (also known as Medicare Part C) plans often include prescription medications. If not, you can purchase a separate Prescription Drug Plan

Facts About Medicare Part D

  • Private insurance companies administer Medicare Part D plans
  • Covers both generic and brand name drugs
  • Uses a formulary (list of medications) with tiers to determine how much, if any, the plan covers a medication
  • Medications cost less if you use a pharmacy in your plan’s network
  • Covered medications and drug plans can change annually

Choosing a Prescription Plan

It can be overwhelming to choose the right prescription plan for your needs. Remember, the program needs to be right for you, not your spouse.

  • Make sure it covers all of your prescriptions.
  • Compare premiums to other plans with the same or better coverage.
  • Check if you can use your plan at your preferred pharmacy or order through the mail.

Medicare Prescription Drug Plan Cost

Most prescription plans charge a monthly premium. The amount varies between programs and where you live. If your income is above a specific amount, you pay an additional adjustment.

In 2020, the Medicare Prescription Drug plan charged a $435 deductible. However, depending on the policy, you may pay all or only part of that amount. Fortunately, you receive a discounted network price.

Once you meet the deductible, you pay the policy covers medications based on the drug formulary. Next, once you and the insurance company have each spent a total of $4,020, you pay 25% of brand name medications and generics. This rate continues until your total out-of-pocket cost reaches $6,350.

How To Enroll in Medicare Prescription Drug Plans

Medicare does not require you to enroll in Medicare Part D. However, you could pay penalties if you do not register during your Initial Enrollment Period. You would also pay for all prescription costs out-of-pocket without a drug plan.

To avoid penalties and make sure you have coverage when you need it, enroll when you first become eligible.

How to Change Your Drug Plan

Medicare permits changes to your plan during the Annual Enrollment Period each year, from October 15 to December 7.

AARDY recommends checking on the new drug plans each year during Annual Enrollment. Drug plans can change coverage and costs each year. You might find a better policy that can save you money. Or, do nothing and let your plan automatically renew at the end of the year.

Where Can I Get Help with Medicare Prescription Drug Plans?

AARDY is here to help you understand Medicare.

AARDY is the nation's fastest Medicare insurance marketplace. You can compare Medicare supplements, Medicare Advantage plans, and Medicare Prescription Drug plans to find the one that best fits your needs.

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