Medicare Part D
You can sign up for Medicare Part D, which helps cover prescription drug costs, along with other components of Medicare starting three months before your 65th birthday.
It's important to do this on timbe because there's a permanent premium surcharge for enrolling more than three months after your 65th birthday if you don't have equivalent drug coverage from another source, such as a retiree plan.
Let us help you with when to enroll.
If you are already enrolled in a Part D "standalone" plan or a Medicare Advantage plan that incorporates drug coverage, you can switch plans during the open-enrollment period, which runs from Oct. 15 to Dec. 7 every year.
Making Part D work
In 2014 the maximum allowable deductible for a Part D plan is $310. Some plans have lower or even no deductibles.
Most Medicare Prescription Drug Plans have a coverage gap also called a donut hole. This means there's a temporary limit on what the drug plan will cover for drugs.
The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. For 2015, you're in the coverage gap once you and your plan have spent $2,960 on covered drugs. People with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
Once you reach the coverage gap in 2015, you'll pay 45% of the plan's cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your planshas set with the pharmacy for that specific drug.
Although you'll only pay 45% of the price for the brand-name drug in 2015, 97.5% of the price will count as out-of-pocket costs which will help you get out of the coverage gap.
In 2014, Medicare are paying 28% of the price for generic drugs during the coverage gap. You'll pay the remaining 72% of the price. What you pay for generic drugs during the coverage gap will decrease each year until it reaches 25% in 2020—in 2015, you'll pay 65% of the price for generic drugs during the coverage gap. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.
Once you've spent $4,550 out-of-pocket in 2014 ($4,700 for 2015), you're out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.
Choosing a good plan
It pays to review your Part D coverage every year, especially if you have started taking new drugs.
- Start at Medicare.gov. You can find the basics about the benefit and Part D plans at Medicare's website. There's a link to the Medicare Part D Plan Finder, which allows you to compare offerings and coverage options in your area and includes a helpful formulary finder that allows you to compare plans based on their coverage of your personalized list of drugs. It will even show you your monthly out-of-pocket drug cost for the year.
- Learn more. We recommend consulting the website of the nonprofit Medicare Rights Center. There you can find in-depth information on Medicare Part D.
Getting financial help
Individuals with annual incomes of less than $17,235 and financial resources of less than $13,300, or married couples with incomes of less than $23,265 and resources of less than $26,580, might qualify for Extra Help from Medicare to pay their Part D premiums and out-of-pocket drug costs.
Additionally, read about the six ways to lower your drug costs on Medicare.gov.