D is for Drug! Medicare Part D is prescription drug coverage offered by private insurance companies but approved and regulated by Medicare. This will allow you to receive big discounts on your monthly prescription costs. Picking the right Part D plan really depends on what drugs you are currently takings. First review the frequently asked questions below then click on the link below to learn which plans cover your drugs.

Part D Questions

How Much Does Part D Cost?

Each plan can vary in cost and drugs covered. While there is a wide price range, the average monthly Part D premium for 2014 is expected to be $39.90 dollars. Your monthly premium could be higher based on the plan you select, your age or your income.

How Much More Should I Pay if My Income is High?

People with higher-income will pay higher premiums for both Part B and prescription drug coverage. The good news, however, this increased payment will apply to less than 5% of those on Medicare.  The way they determine who pays more is based on the modified adjusted gross income on your tax return. If is above a certain amount, you will pay a higher monthly premium.  The part D increase will mainly affect those under 65 or disabled who will have to reach 25% of their income before they write of any medical expenses.  For more information, visit the Social Security’s website.

 

 

What does Part D cover?

The specific drugs that are covered varies with your Part D provider but it will be very difficult to find a plan that covers all your prescription drug costs. You will want to look at Part D more like a discount drug program that caps your cost should your Rx needs be very expensive. Each year the federal government sets the minimum requirements for deductibles and coinsurance levels for Part D providers but many insurance providers chose to offer coverage with no deductibles.

How do I sign up for Part D prescription coverage?

Before you can sign up for Part D, you must first select a Part D compliant plan offered by an independent company.  There are many different Part D plans to chose from with a wide range of coverage and prices offered. Fortunately, the Federal Part D Plan Finder does a good job organizing your choices. The site allows you to share your drug needs and automatically compares plans offered. The site even estimates the total cost of each plan. We think it is a pretty high-tech solution for a government regulated program.

Most importantly, you can sign up online for the plan you select directly from the website link below.

 

What if I don’t want to sign up on the Medicare.gov Part D Plan Finder Website?

We believe the easiest way to sign up is from the Medicare.gov site using the link above.  You may also be able to join a Part D compliant plan by calling the independent Part D provider you select.  They may assist you over the phone or direct you to enroll on their web site. Additionally you can enroll for a Part D plan by calling 1-800-MEDICARE (1-800-633-4227).

Part D Plan Finder Website

When do I sign up for Part D prescription coverage?

You should sign up for Part D when you are eligible for Medicare. If you don’t have other credible prescription drug coverage through work or spouse, you will pay a 1 percent penalty for late enrollment for every month that you could have enrolled but chose not to. You may consider postponing signing up for Part D if you currently do not have a high prescription cost, but you must weigh any savings against the penalties you would incur should you sign up later.

Can I switch Medicare Part D plans?

Yes, you can switch Medicare Part D plans.  Each year there is an open enrollment where you can switch Medicare Part D Prescription plans (October 15 to December 7 in 2014). You will want to look at your Part D provider’s drug formulary list. This is the list of all approved drugs and tier levels. If they raise their monthly premium or remove a drug that you are currently taking, you will want to consider switching.

What is the Part D “Donut Hole”

To understand the Part D “Donut Hole,” you must first realize that Part D doesn’t cover all your prescription costs. There are still deductibles and coinsurance (where you pay a % of total costs) under Part D. Medicare Prescription coverage could save you a lot of money but this coverage was never designed to cover all of your Rx costs.

What is the Donut Hole?
The part D Donut Hole is a somewhat misguided (and misspelled) attempt to explain what is known as the Part D Coverage Gap. If your total prescription bills ever reach roughly $2800 in one year, you will then have arrived at the Part D Coverage Gap and will have to pay 100% of your additional prescription costs but with a discount (see below for discounts). Fortunately, if your total Rx bills eventually reach about $6500, your Part D plan will then pay all but 5% of additional cost for the rest of the year. The Part D Coverage Gap is called the Donut Hole because like the sweet treat there is good stuff on both sides but nothing in a middle.

When does the Donut Hole kick in?
In 2014, your Medicare Part D cost share responsibility is broken into four different phases.

Part 1) Deductible: = You pay 100% of the first $310
Part 2) Initial Coverage: You pay 25% of all costs from $310 to $2850
Part 3) Coverage Gap: = You pay 47.5% for brand name, 72% for generic of $2850 to $6455 (the donut hole!)
Part 4) Catastrophic Coverage: = You pay 5% for any cost over $6455 for the remainder of the year

Those are percentages. How much will I really pay if I have large Rx costs?
Here are the 2014 Maximum payment amounts you will pay:

  • Deductible:  $310
  • Initial Coverage: $635
  • Coverage Gap (aka Donut Hole): $3605
  • Catastrophic Coverage: 5% on top of that.

 

 

Click here to learn about the Donut Hole under “ObamaCare”?

Many people ask “Won’t the Donut Hole go away under ObamaCare.” After careful analysis by the team at Senior65.com, the answer is “not exactly.”  There is still a Part D Coverage Gap under the “Affordable Care Act” where you still pay 100% of all Rx cost. What the health care reform act has done is to offer a 50% discount on all the brand name drugs you have to pay during the Coverage Gap. This means if you have a $200 brand name prescription, you will get it for $100.