Prescription Drug Plans

Manage the cost of your medications

A Medicare prescription drug plan (Part D) provides coverage for the prescription drugs you need. A Part D prescription drug plan does not pay for 100% of your prescription costs, but it reduces the amount you will have to pay. A prescription drug must be on the prescription drug plan’s formulary for it to be covered. Coverage and copays are generally based on a drug’s tier–usually Tiers 1-5–with the lower tier drug will generally cost less than a higher tier drug. 

Even if you don’t currently take any prescription drugs, it is recommended to sign up for Part D. If you don’t enroll in a Part D plan, and you don’t have other creditable prescription drug coverage (such as drug coverage through an employer), and you don’t qualify for Extra Help, you’ll likely pay a late enrollment lifetime penalty when you do join.

There are two ways to get Medicare drug coverage:

  1.  A stand-alone prescription drug plan: These plans add drug coverage to Original Medicare. You must have Medicare Part A and/or Medicare Part B to join a prescription drug plan.
  2. A Medicare Advantage plan: You get all of your Part A, Part B, and drug coverage through these plans, along with additional benefits (i.e. dental, vision and hearing). You must have Part A and Part B to join a Medicare Advantage plan. *Not all Medicare Advantage plans offer drug coverage. 

There are four payment stages for Medicare Prescription Drug Plans: 

  • Annual Deductible: Starts with your first prescription of in the year under your plan. *Not all plans have a deductible. 
  • Initial Coverage: Starts once you reach your deductible. Or if your plan has no deductible, this stage starts immediately.
  • The Coverage Gap: Starts when you and your plan collectively spend $4,660 in a plan year.
  • Catastrophic Coverage: Starts when you reach your out-of-pocket limit of $7,400 in a plan year on your prescriptions.

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