Medicare Part D is an optional, standalone prescription drug plan offered by private insurers. It’s available to anyone who is entitled to Part A or enrolled in Part B. Premiums and out-of-pocket expenses for this plan can vary depending on the insurer you choose. You must also live within the plan’s service area to qualify.
Here are some costs you can expect with Medicare Part D Plans:
- Deductible – If your plan has a deductible, you pay 100% of your prescription drug costs until it is met.
- Cost-sharing – After you meet your deductible, you pay a flat rate (called a copayment or copay) or a percentage (called coinsurance) of the total amount, usually when you pick up a prescription.
- Catastrophic coverage – After you pay your plan’s annual maximum out-of-pocket amount, catastrophic coverage kicks in. You only pay a small copayment or coinsurance amount for prescription drugs for the rest of that year.
Some insurers, like Medical Mutual, include Part D coverage in their Medicare Advantage plans. Learn more about Medical Mutual’s Medicare Advantage with prescription drug plans.
The Medicare Coverage Gap (The Donut Hole)
A Medicare Coverage Gap exists. After your Medicare Part D coverage pays a certain amount for prescription drugs, you may be required to pay any remaining costs, up to a yearly limit.
Recent federal healthcare reform legislation will make prescription drug coverage more affordable and reduce this coverage gap. You can expect additional savings each year until 2020, when the coverage gap disappears completely.
To learn more about the coverage gap, contact the Centers for Medicare & Medicaid Services at 1.800.633.4227 (TTY users 1.877.486.2048) or read its publication Closing the Coverage Gap.
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Page last updated on 6/11/2018
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H4497_H6723_WS_2016_Jun15 CMS Approved