Prescription Drug Plans are the Part D of Medicare established to help cover the costs of prescription drugs. Part D is separate from Original Medicare Parts A and B, and can either be purchased by itself or bundled into a Medicare Advantage plan. Prescription Drug Plans are provided by private insurance carriers that are contracted by Medicare.
Do I Need a Prescription Drug Plan?
You are not required to have a Prescription Drug Plan, but if you have Original Medicare or a Medicare Supplement plan, you’ll likely want a Prescription Drug Plan to help cover your prescriptions. If you have a Medicare Advantage plan, your prescription coverage is typically already included. In the rare instance that a Medicare Advantage plan does not include prescription coverage, you can sign up for a separate Prescription Drug Plan to go along with your Medicare Advantage plan.
Who Provides Prescription Drug Plans?
Prescription Drug Plans are provided by private insurance carriers who are contracted by Medicare. The carriers available will vary between regions.
What do Prescription Drug Plans Cover?
Prescription Drug Plans cover prescription drugs other than those given to you during an inpatient hospital stay or adminstered to you in a doctor’s office. (Those are covered under Original Medicare Parts A & B.) Individual carriers determine which specific medications to cover and at what cost, but are required to cover all drugs in certain categories, like cancer medications and immunosuppressants. All Prescription Drug Plans will cover the first $2,960 of covered medications each year. Once you reach that limit in most plans, you enter the coverage gap, also called the “donut hole.” While you’re in the coverage gap, you’ll pay more for your medications, though you won’t have to pay full retail. In 2015, you’ll pay 45% of the retail cost of brand name drugs and 65% of the retail cost of generics. The Affordable Care Act is working to close the coverage gap by a bit each year until 2020, so the percentage you’ll be responsible for while you’re in the gap will decrease each year until then. Once you’ve spent $4,700 out of pocket for the year, you enter what’s called “catastrophic coverage”, and will pay only a small co-payment or co-insurance for your prescriptions for the remainder of the year.
I take a Specialty Medication/a medication that’s Brand New for a Particular Condition. Will a Prescription Drug Plan Cover my Prescription?
Whether it’s covered and at what cost will vary between carriers, so be sure to find out the specifics of whether your medication will be covered when considering which plan to choose. If a plan does not cover your medication, you may be able to appeal their coverage decision if your doctor agrees that it’s medically necessary for you to have that medication and not any normally covered alternatives.