What You Should Know About Medicare Part D

A guide to prescription drug plans

Medicare Part D does not pay for over-the-counter medications like cough syrup or antacids. It also doesn't cover some prescription drugs, such as Viagra when it is used for erectile dysfunction.

What is Medicare Part D?

•Part D is Medicare’s insurance program for prescription drugs. For most of its history, Medicare did not offer a prescription drug benefit. Congress added the coverage, which began in 2006.

How do I buy a Part D plan?

•You can sign up for a standalone Part D plan sold by insurance companies. These plans are used in conjunction with Original Medicare. You can search for a plan at medicare.gov.

Is this the only way I can get Medicare prescription drug coverage?

•No. Most Medicare Advantage plans cover prescription drugs in addition to hospital care and doctor visits. You can see which Medicare Advantage plans include drug coverage at medicare.gov.

What does Part D cover?

•Part D pays for outpatient prescription drugs. But if you go to a doctor’s office or other outpatient facility to receive, for example, chemotherapy, dialysis or other medicines that are injected or given intravenously, Medicare Part B — not Part D — kicks in to pay for those treatments. Part D does cover some self-injected medicines, such as insulin for diabetes.

What doesn’t Part D cover?

•Part D does not pay for over-the-counter medications like cough syrup or antacids.

•It also doesn’t cover some prescription drugs, such as Viagra, when it is used for erectile dysfunction; medicines used to help you grow hair; medicines that help you gain or lose weight; or most prescription vitamins.

Does Part D cover brand-name and generic drugs?

•Yes. But most plans charge more for brand-name drugs. Each plan covers different drugs, and copays vary for those drugs.

What does Part D cost?

How much you pay for prescriptions under Part D depends on the plan you select and how many medicines you take during the course of a year. Here’s a breakdown:

•There may be a monthly premium. The Centers for Medicare & Medicaid Services (CMS) estimates that the average monthly Part D basic premium for 2018 will be $33.50. But premiums vary widely, depending on the drugs covered and the copays. Some plans have no premiums. If you are enrolled in a Medicare Advantage plan, part of your premium may include prescription drugs.

•Plans have the option of charging an annual deductible. That means you have to pay full price for your medicines until you meet that deductible. The federal government sets a limit on deductibles every year. For 2018, a plan can’t impose a deductible higher than $405. But deductible amounts vary widely by plan, and many plans don’t impose a deductible.

•Most plans have either a copay, which is a flat fee for each prescription, or coinsurance, which is a percentage of the cost of the drugs.

•Once the total cost of your prescriptions reaches a certain threshold — set each year by the federal government — you’ll have to pay more for your prescriptions. That’s because of a quirky aspect of Part D called the coverage gap, also known as the “donut hole.” For 2018, once you have incurred $3,750 worth of drug costs, you’ll be in the coverage gap. You’ll pay 35 percent of the cost of brand-name drugs and 44 percent of generics.

•You’ll continue to pay these prices until the total cost of your drugs reaches $5,000. Once you’ve hit that limit, you’ll no longer be in the donut hole and you’ll pay no more than 5 percent of your drug costs for the rest of the year.

How do I decide which Part D plan is best for me?

•You’ll want to go to medicare.gov’s Medicare Plan Finder, an online tool that allows you to compare Part D plans available in your ZIP code.

•On the plan finder page, you’ll be asked to enter the prescriptions you take. This allows you to find out what the various plans charge for them and to see the plan’s monthly premiums and deductibles. You’ll also be able to learn which pharmacies in your area participate in the various plans.

•You can also find out how many “stars” the federal government has given to the plans available in your area. The government’s Star Rating System assesses plans based on factors such as customer service, member complaints and prices.

What if I can’t afford a Part D plan?

•Medicare has an Extra Help program for low-income individuals that will pay some or all prescription costs.

•If you don’t qualify for Extra Help, you might qualify for an assistance program in your state. You can contact your State Health Insurance Assistance Program (SHIP) or state Medicaid office for more information.

•In addition, some drug manufacturers also offer discounts on their medications.

How do I get help?

•Medicare has a call center that’s open seven days a week, 24 hours a day. The toll-free number is 800-MEDICARE (800-633-4227).

•You may also contact SHIP. You can find contact information for SHIP in your state at Medicare.gov.

When do I need to make a decision?

•This year's open enrollment began on Oct. 15 and concludes Dec. 7.

•If you are satisfied with your current plan, you will be automatically enrolled, and you don’t have to do anything. If your plan is no longer available, you will receive a letter from the insurer about the termination. You will then need to pick another plan.

•However, Medicare officials and experts strongly suggest that you review other available Part D plans — even if you are satisfied with your current plan. Why? Because plans routinely change premiums, deductibles and copays, and you might find a better deal with a different insurer. Plans also modify how much they will pay for particular prescriptions. So, it’s a good idea to review your coverage each year.

What if I miss my enrollment deadline?

•You may incur a penalty. If you are approaching 65, you should plan to enroll in a Part D plan when you sign up for Medicare Part A (hospital services) and Part B (doctor visits and other outpatient care). You need to sign up during your Medicare Parts A and B Initial Enrollment Period (IEP) to avoid any late penalties. Your IEP begins three months before the month you turn 65 and lasts until three months after. For example, if you will turn 65 on June 15, your IEP is from March 1 to Sept. 30. If you don’t sign up during this period, you are liable for penalties that will increase your premiums for years to come.