Understanding Medicare Part D: What Is It and What Does It Cover?

The Original Medicare (Part A and Part B) covers a wide range of benefits for patients. However, one important aspect that isn’t included is standalone prescription drug coverage. This means that unless the drugs are part of your inpatient hospital care or are administered by your healthcare provider, you aren’t entitled to them under the Medicare Part A and B plans.

It’s for this reason that Medicare Part D exists, as it helps you to cover those costs of your standalone medication. Generally, prescribed drugs aren’t the most expensive elements of medical care, but considering that new drugs are being introduced every day, it’s important to consider a Medicare Part D plan to help you save money and give you a level of assurance. If you’re considering Medicare Part D, here are some important details you should understand.

What is the Medicare Prescription Drug Plan (Part D)?

The Medicare prescription drug plan is a discretionary program provided by the government to assist recipients of Medicare plans to cover the costs of prescription drugs that aren’t included in their inpatient hospital care. The plans are sold by private insurance companies that are affiliated with Medicare. The Medicare Part D plan covers prescription drugs that have the following prerequisites;

• Not an over-the-counter drug, but only as a prescribed one,
• FDA-approval,
• Sold and available in the USA,
• Medically acceptable by the SSA standard usage,
• Not covered by Original Medicare Part A or Part B,
• Has its own formulary.

How does the Medicare Part D plan work?

When it comes to prescription plans, there are two options. Beneficiaries can either join a standalone Medicare Part D Plan that works together with their Original Medicare insurance, or they can just opt for the Medicare Advantage plan that covers a level of drug prescription.

If you have Original Medicare insurance, you are qualified to join the Medicare Part D Plan. You will have to pay a monthly premium that’s not dependent on your existing Part B monthly premium. However, if you choose a Medicare Advantage plan that covers prescription drugs, you only have to pay the premium for the entire plan.

How much does Medicare Part D cost?

The Part D monthly premium varies by plan. There’s a different plan rate for single, divorced, and married. It also differs according to your income rate as shown in Medicare Income-Related Monthly Adjustment Amount (IRMAA) chart.

The deductibles also vary between drug plans. Some Medicare drug plans have a $0 deductible. However, in 2022, no plan may have an annual deductible of more than $480. Depending on your provider’s policy, you may be entitled to the full deductible, or partial deductible, or the provider may waive the entire amount.

The coverage begins from the deductible phase where you pay 100% of the cost of prescriptions until you reach the point when you satisfy your deductible.

The next phase of your coverage is called your initial coverage limit. Here, you set a copay or a percentage of the costs (coinsurance), and the amount you pay depends on the formulary of your plan and the tier categorization of your drug.

The coverage gap and Catastrophic coverage come next, respectively, up until the point where you pay 95 percent of the cost of your prescription drugs until the end of the year.

What are the benefits of the Medicare Part D plan?

Medicare Part D plans are relatively budget-friendly when compared to the high cost of prescription drugs, it can be of great benefit to you to enroll in this policy. However, you should compare the plan formularies, tier categorizations, cost of premiums, and deductibles, and see if they charge a coinsurance or copayment before you finally decide.