When you become eligible for Medicare, you will likely wonder whether your plan will include coverage for prescription drugs. After all, prescription drugs are among the most common and frequent medical expenses faced by the average American.
Though Original Medicare will not cover most ordinary prescriptions, you can get the necessary, expanded benefits by enrolling in Medicare prescription drug coverage. Often known as Medicare Part D coverage, these private plans are offered by major insurers and designed to drastically reduce the costs of prescription medication for the policyholder—all for an affordable monthly premium.
However, Medicare Part D, like all health insurance plans does have conditions that apply to the costs and coverage you receive. Therefore, it’s important to know the common terms associated with your plan, and how they will have an impact on your benefits. Let’s take a closer look.
The Basics of Medicare Part D
Medicare is the United States’ taxpayer-supported health insurance system, designed primarily for the benefit of those over 65 years old, and for younger people with qualifying disabilities and end-stage renal disease. Original Medicare is the primary benefit, consisting of two types of coverage:
Medicare Part A: Covers hospital expenses and other costs related to inpatient care.
Medicare Part B: Covers medical expenses related to everyday costs like doctor’s visits and other outpatient medical services.
Where neither Part A nor Part B will offer coverage is for prescription drug costs. Though Medicare Part A will cover certain drugs received in inpatient care, your run-of-the-mill prescriptions will have no benefits attached. To get this coverage, you will have to invest in Medicare Part D.
Part D coverage is a private benefit, offered by major insurance carriers and approved by Medicare. It is also the primary source of prescription drug coverage for millions of Medicare recipients. These plans are generally affordable, and you can often apply for them when you enroll in Original Medicare itself.
Terms to Know About Part D Coverage
However, to get the perfect Part D plan for you, you will need to compare coverage options with the help of your agent. When scrutinizing details, it helps to know some of the common terms that are included within your plan in the first place.
Premiums: Your premium is the cost that you pay for your prescription drug plan itself.You will have to make this paymentregularly,andwill pay it in addition to your Original Medicare premium.
Co-Payments: Most prescription drugs on Part D plans come with copayments attached. Copayments are nominal costs that you pay for the cost of your prescriptions after your plan pays its share of your costs.Co-payments will vary from plan to plan and prescription toprescription.
Formularies: Your insurance plan’s formulary is the list of drugs covered bythe policy. You must take a prescription within your formulary in order to receive full coverage.Formularies usually offer numerous drugs to treat the same condition.
Drug Tiers: Within your formulary, you will often find that drugs are separated intotiers. Those in the lowest tiers are usually generic drugsand come at the lowest costs to the consumer. Those in higher tiers might be brand-name or specialty medications, and they usually come at a higher out-of-pocket cost. Keep in mind, just because a drug is in a lower tier, it isnotweaker or less effective.
Prior Authorization: In order to have Part D cover certain prescriptions, your physician must submit a prior authorization to your insurer. This prior authorizationexplains to Medicare that it is medically necessary for you to take thatdrug in particular. However, don’t forgetthat though one drug might not be covered, an alternative might still be available on your plan.
Deductibles: A deductible is a dollar value that you must payout-of-pocket for your drugs before your plan begins to pay any share of costs. Deductible rules vary from plan to plan. Some drugs are not subject to deductibles, and some plans have no deductible at all. Under Medicare rules, no drug plan deductible can cost more than $445 in 2021.
Donut Hole:Your Part D donut hole is a gap in coverage that will kick in after you and your plan have paid a combined $4,130 for drugs in 2021. At this time, the pricing structure for drugs will be different than they were when you were not in the coverage gap.However, you will still only pay a percentage of thefull cost of the drug in question.
When searching for an optimized Medicare Part D plan, contact your Medicare insurance agent at Seniors Health Plan Advisors. We’re happy to help you choose the plan that will offer you the best cost structure for the drugs that you must take.
