Prescription drug coverage can be a little confusing because most people are used to having their prescriptions covered under their traditional PPO or HMO prior to turning 65, but that isn’t always the case for seniors. We have broken down how prescription plans work to better help you understand your choices.
This article was updated on June 27, 2019 to reflect new information.
Ways to Enroll in Prescription Drug Coverage
The following are the two ways to enroll::
1) Medicare Part D
- Theses plans are available through Original Medicare. These drug plans are also known as Prescription Drug Plans (PDPs) and have an additional monthly premium on top of Original Medicare’s monthly premium. Most people purchase these plans separately if they opt out of the second way to enroll, see below.
2) Medicare Advantage Plan
- These private plans many times offer prescription coverage bundled into their plans. The benefit of this bundle is that you don’t pay an additional monthly premium for Rx coverage.
Go to our Prescription Drug Overview Page to learn more about how to enroll in these plans.
Not All Medicare Advantage Plans Offer Rx
Most Medicare Advantage plans offer prescription drug coverage, but since Medicare Advantage plans are not standardized you have to read the fine print to make sure what you need is covered. Another important reason to check you plan is if your current Medicare Advantage Plan (Part C) includes Rx coverage and you enroll in a PDP (Part D) you will be automatically released from your Medicare Advantage Plan and returned to Original Medicare.
Why would this matter? Because generally Medicare Advantage Plans have lower premiums, if any at all, and must cover all the same benefits of Medicare, but usually offer more benefits than Original Medicare like dental and vision, as well as limit your out of pocket costs.
Prescription Drug Coverage Facts
Here are a few 2019 prescription drug plan facts:
- For 2019 the national base monthly premium is $33.19
- Drug deductible maxes out at $415 per year
- Some plans don’t have a deductible
- After deductible is met you either plan a set copay or a percentage
- Donut Hole coverage gap between $3,820 and $5,100 of drug costs**
**In 2019, during this “donut hole” period approximately 25% of costs of brand-name drugs is covered by the senior, and 37% of the cost of covered generic drugs.
Drug Plan Late Penalty
If you want to enroll in a Medicare prescription drug plan you’ll want to do when you’re first eligible (7 month period which starts three months before your 65th birthday or when you lose creditable coverage), you’ll owe a 1% Medicare Part D late penalty for each MONTH that you haven’t enrolled.
5-Star Medicare Prescription Drug Plan
Medicare rates plans to help seniors pick out the best PDP or Medicare Advantage Plan for them. There are two things that work in seniors favor from this rating system 1) private insurers will work hard to hit the “excellent” 5-star rating, and 2) seniors can change their PDP or Medicare Advantage prior to open enrollment if they switch into a 5-star plan.
For any further questions about Prescription coverage call the number above or contact Senior65 for assistance.