Part D - Prescription Drug Plans

Part D Prescription Drug Plans, or PDPs, were introduced in 2006 as part of the Medicare Prescription Drug, Improvement, and Modernization Act. Before this, there was not a consistent way for seniors to get help with their prescription drugs. For some, prescription drug costs are their largest medical expense each year.

Prescription Drug Plans are offered by private insurance companies with approval from Medicare. The plan benefits will vary from company to company. Some plans have deductibles, while others do not. Plan premiums vary from company to company and each plan has a formulary specific to their plan. The formulary is a list of medications covered by the plan.

You must purchase a prescription drug plan when you are first eligible or you may have to pay a penalty when you decide to get one later. Some Medicare Advantage plans include prescription drug coverage known as MAPD plans. If you choose a Medicare Advantage plan that does not include prescription drug coverage, then you can purchase a stand-alone PDP. You can also purchase a stand-alone PDP plan with a Medicare Supplement plan.

Things to consider when deciding on a PDP are the formulary and whether your prescriptions are covered, the monthly premium, deductibles, copays and coinsurance. All PDP have three coverage levels known as the initial coverage, coverage gap or donut hole, and catastrophic coverage. The coverage levels are determined by your out-of-pocket cost, which include the deductibles, copays, and coinsurance. You are in your initial coverage when your out-pocket costs are less than $3700. During your initial coverage you pay the plan copays for your medications. When you reach $3700 in out-of-pocket costs in a year you enter the coerage gap or donut hole. While in the donut hole, your plan typically pays 5% of a prescription cost and you are left paying the other 95%. Once you reach $4,950 in out-of-pocket costs you enter catastrophic coverage and will only have to pay about 5% of prescription costs. The amounts that determine the coverage gap and catastrophic coverage may change from year to year. These numbers are for 2017.

I can help you review your current prescriptions and then help you decide which PDP is best for you. I always help my clients find the best value plan. My advice is always free so don't hesitate to call or email today!