Understanding Medicare Part D

​In 1999 President Bill Clinton proposed that prescription drug benefits be added to Medicare and this was accepted and added President Bush with the Medicare Modernization Act of 2003. Initially this was supposed to be optional coverage, however, if you do not get a Part D (drug) plan when you are initially eligible but decide to later, you may be subject to a Part D Late Enrollment Penalty.  This LEP is based on a percentage of the national average for drug plans and imposed for the rest of your life. Exceptions may apply if you’ve had creditable drug coverage through an employer/group plan.

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Many people who don’t take prescription drugs at the time they sign up for Medicare A and/or B, will decline to get a Part D plan feeling it is money wasted. However, when their health changes and they are prescribed any type of maintenance drugs (blood pressure, cholesterol, etc.) they are surprised to find they are subject to this penalty. This is why it is important to speak to a local, licensed Health Insurance agent to help you navigate your options.

There are two ways to get a Part D drug plan:
Purchase an individual / stand-alone plan in conjunction with your traditional Medicare coverage, Medicare Supplement OR join a Medicare Advantage plan that includes prescription coverage (MAPD).

There are four stages to Medicare Part D:
Deductible Stage where the insured is responsible for up to $445 depending on the individual plan. Many companies impose this deductible on Tier 3-5 drugs in lieu of Tiers 1 & 2 which are normally the cheapest prescriptions one would take.

Initial Coverage Stage comes into play once the deductible is met. The insured and insurance company (combined) pay the full cost for prescriptions up to $4130 after which the insured falls into the coverage gap otherwise knows and the “donut hole.”

In the Coverage Gap Stage or donut hole, the insured pays 25% of the cost of the drugs until his/her MOOP (maximum out of pocket) reaches $6550 after which the insured falls into the Catastrophic Stage. While in the Gap Stage, only your out-of-pocket costs contribute toward the catastrophic stage.

During the Catastrophic Stage of your Part D Medicare coverage, you will pay $3.70 for generic and $9.50 for brand name drugs.

The Part D coverage is based on an annual/calendar year.

If you are new to Medicare, you may be wondering what the Tiers are. T1 are Preferred Generic Drugs, T2 Generic drugs, T3 are Preferred Brand name drugs, T4 are Non-Preferred Drugs and T5 are Specialty drugs. Again, this is where a licensed Health Insurance agent is your best friend!

For more information on Medicare in general, check out our FAQ and get up to date on Medicare changes for 2021 HERE.

If you’re in need of a licensed Health Insurance, give us a call: 337-439-7730
 
Until next time, we here at Curtis Insurance / Curtis & Associates wish you and yours a Merry Christmas, Happy Holidays and Blessed New Year.
 
Tommy Curtis and Staff
 
Disclaimers:
Medicare has neither endorsed nor reviewed this information.
Not connected or affiliated with any United States Government or State agency
 
*Guidelines vary by company/plan
 
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