Medicare Drug Plans (Part D) Known as the Medicare Prescription Drug Plan
Medicare Drug Plans - Part D ("Medicare & You" pages 81-87)
Medicare introduced Part D in January 2006. Part D is the designation given to the new Medicare Prescription Drug Plan (PDP) benefit offered through private insurance companies approved by Medicare and contracted annually.
There are two ways to get Medicare prescription drug coverage:
There are three or four stages to every drug plan.
The first stage is the Deductible phase, not all plans have a deductible, so you may not go through this phase. While in the deductible, you will pay full cost for your covered prescriptions until you reach the specific deductible amount. The maximum amount for the deductible in 2013 is $325.
During the Initial Coverage phase, you will pay a specific co-payment for your covered drugs; the co-pays are based on tiers. The number of tiers ranges from four to six, depending on the carrier. When your actual drug cost reaches $2,970 (2013) you will go into the next phase.
- For example, your prescription’s full cost is $100 per month, but your co-pay is $10; the full $100 is being applied to the $2,970 threshold.
The Coverage Gap also known as “The Donut Hole”: You will still receive a discount on your prescriptions, but your cost will be slightly higher than it was during your initial coverage phase.
- You will pay 47.5% for your plan’s covered name brand drugs and 79% for your plan’s covered generics while in the coverage gap.
- Once you have reached $4,750 (2013) in out-of-pocket cost, you will enter the final stage of the drug plan
Catastrophic Coverage begins when the combined total cost for you and the manufacturer has reached $4,750. At this point you will pay $2.65 for covered generics or $6.60 for covered name brands or a 5% co-insurance, whichever is greater.
Because we represent a number of the carriers who offer Part D coverage, we can assist you in understanding Part D coverage and enrolling in a plan should you choose to do so.
Extra Help, through Social Security is available for those with limited income and assets and will pay for all, or most of the monthly premiums, annual deductibles and prescription co-pays related to their plan. Many qualify for these big savings and don't even know it.
For additional information contact Rita Boarman at Senior Connection.
--More information is available in the "Medicare and You" booklet