By Dana Barrett
\nIf you are currently a recipient of Original Medicare and need prescription drug coverage, we can answer your questions about what Medicare Part D covers.
\nDoes Medicare Cover My Prescriptions?
\nMedicare Part D Plans\u00a0are provided by private insurance companies. These plans cover all or a portion of the cost of prescription drugs for beneficiaries. If you\u2019re enrolled in Original Medicare and have Medicare Part A (hospitalization) and Part B (physicians and services), you also have the option to enroll in a Part D prescription drug plan. Some Medicare Part D plans have deductibles, while others are free.
\nThe private insurance companies that offer Medicare Part D are the ones who decide which drugs are covered under each of their plans. However, there are 6 classes of therapeutic medications that are mandatory for approval by Medicare as a Medicare Part D Plan. These are known as protected classes. Most Part D Plans cover commonly prescribed generic and brand-name medications as well.
\nMedicare Part D \u2013 6 Protected Therapeutic Classes
\nMedications that are not covered under Medicare Part D include:
\nPart D Drug Plan Formularies
\nEach Medicare Part D Plan has a specific list of medications covered by their plan called a formulary. Formularies can differ between plans, and plan providers are required to publish their list of formularies on each plan\u2019s website. The formulary for any plan can sometimes change mid-year, but the plan provider has to notify you when a change is made. They must also provide you with alternate medication options and how the cost will affect you.\u00a0
\nCoverage Tiers\u00a0
\nMany Medicare Part D Prescription drug plans manage drug costs by assigning coverage tiers to different medications. These coverage tiers show the percentage of cost covered for each drug and are listed on the plan\u2019s formulary list. Drugs listed in lower tiers usually cost more than those in higher tiers. Tier one drugs have the lowest co-payment and usually include generic brands. There is also a specialty tier for expensive medications that have the highest copayment level.
\nAnother way that Medicare Part D Prescription Plans control costs is with medication management strategies. These strategies are implemented by:
\nStep therapy is a process where you\u2019re required to try an alternate medication that is usually less expensive prior to receiving the brand-name drug that was initially prescribed.
\nWhat If my Part D Plan doesn\u2019t Cover the Medication I Need?
\nIf you have been prescribed medication for a new condition and that drug is not on your Plan D formulary list, you or your doctor can request a formulary exception.\u00a0To file the request you\u2019ll need a written statement from the prescribing physician. A Medicare representative should respond to your request within 72 hours.
\nDoes Medicare Cover my Covid-19 Vaccine?
\nYou pay nothing for a Covid-19 vaccination with Medicare. There is no copayment or deductible. Additionally, the provider who gives you your shot is not allowed to charge you an administration fee. Medicare Part D covers
\nall vaccinations.\u00a0
\nCoverage Periods
\nYour out-of-pocket drug costs will change throughout the 4 phases of Medicare Part D. Those phases are:
\nDeductible Period
\nWhen you first enroll in Part D, you will have to pay the full negotiated cost of your medications until you reach your deductible. Deductibles vary among plans but must stay below $445 for 2021. There are Part D plans that have no deductible. The negotiated costs are the price that the private Plan D insurance providers agree upon with drug manufacturers.
\nInitial Coverage Period
\nOnce you\u2019ve met your deductible, Medicare helps to pay a portion of your drug costs. You\u2019ll be responsible for the copayment or coinsurance amount specified in your plan. Medicare beneficiaries who take few medications stay in this period for most or all of their coverage year.\u00a0
\nThe Medicare Donut Hole
\nAfter the total cost of your prescription drugs reaches a specific amount ($4,130 for 2021) you enter a coverage gap phase referred to as \u201cThe Donut Hole\u201d. The $4,130 amount represents total costs \u2013 the combination of your copayments and the amount Medicare paid for your prescriptions. While you are in the donut hole, you are responsible for paying 25% of the cost of your medications.\u00a0
\nAs an example, if you are in the donut hole and fill a prescription with a cost of $80, you are responsible for paying $20 out-of-pocket. When the total cost of your medications for the year reaches $6550, you leave the donut hole and enter the Part D Plan phase called \u201cCatastrophic Coverage\u201d.
\nCatastrophic Coverage
\nWhen you reach $6,550 in out-of-pocket prescription drug expenses in 2021 you’re out of the coverage gap. This represents your maximum out-of-pocket expense for prescriptions during the coverage year. As soon as you clear the coverage gap (the donut hole), you are automatically bumped into the “catastrophic coverage.” phase. With catastrophic coverage, you are only responsible for paying\u00a0coinsurance\u00a0of about 5% until the end of the coverage year.\u00a0
\nThe Take-Away
\nIf you\u2019re currently on Medicare or will be eligible soon, Medicare Part D can help with your out-of-pocket cost for drugs. Plans differ by benefit level, formularies, and deductible amounts. It\u2019s wise to research plans to find the best fit for your budget and the specific medications that you need. You can also choose a Medicare Advantage (Part C) Plan that includes prescription drugs.\u00a0
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