One of the more common medical expenses that we incur later in life is for prescription drugs, and when you’re about to reach age 65, you may be thinking about how Medicare will factor into your current prescription costs. Enrollees have several different options if they want to obtain this kind of coverage, and it depends on which type of Medicare plan they are choosing.
Those who select Original Medicare, which includes hospital coverage through Part A and medical coverage through Part B, can opt for prescription drug coverage through Part D. This plan is often referred to as a Medicare Prescription Drug Plan, and is designed to enhance Parts A and B. Individuals who select Medicare Advantage instead, typically includes Part D prescription drug coverage within the plan benefits.
When To Enroll In Part D
Eligibility for a Medicare Prescription Drug Plan is much the same as it is for all other Medicare plans, as individuals must be age 65 and an American citizen or a legal resident for the last five years. You must have coverage through Part A and/or Part B, or select an Advantage plan that includes Part D benefits.
There is an initial enrollment period for Part D plans as well as all other Medicare coverage, and delaying your enrollment may put you at risk of having to pay late penalties down the line. While many individuals are automatically enrolled in Original Medicare, Part D benefits require a proactive enrollment.
You may also change your Part D coverage during Medicare’s Annual Election Period from October 15 to December 7.
Some private health insurance plans also offer prescription drug coverage if they are contracted by Medicare, so make sure to look into your current benefits, if you have them, before selecting Part D benefits.
What Prescriptions Are Covered?
If you currently take prescription drugs, it’s essential that you review the various schedules of costs, called formularies, to see if your specific medications are covered under the Part D plan you are selecting. Not all plans will cover all drugs, and in order to reduce your out of pocket costs as much as possible, select the plan that most closely matches what you are currently taking.
Sometimes our prescription drug needs can change, and this might necessitate a change to your Part D coverage. Each year during the Annual Election Period, take the time to consider if the plan you are on is the most cost-effective. Formulary costs may change at any time but you will receive notice from your Medicare plan if that occurs.
Prescription Drug Plan Part D
Individuals who are eligible for Medicare have a wealth of options when it comes to their health coverage, and all plans should be taken into consideration once they reach the age of 65. While many opt for Original Medicare, which includes Part A hospital coverage and Part B medical care, it still might not include as many benefits as one would like.
Another option, called Medicare Advantage, is available that combines these tweo plans and often includes a Part D prescription drug plan as well as additional resources for vision and dental care. Whether you enroll in Original Medicare or an Advantage plan, it’s worth considering adding Medicare Part D to your benefits package as it helps with prescription drugs.
What Part D Pays For
Pharmaceutical pricing can often reach unreasonable costs and it can be difficult for individuals on a fixed income to afford the medication they need. Depending on the prescriptions you currently take, you may be able to save money through the use of Part D benefits. Various plans will cover different prescriptions, so it’s imperative that you review the formularies of each before enrolling. This will ensure that the bulk of your medications are covered to their fullest extent.
Remember, as with all Medicare plans, Part D does not pay 100% toward your prescription costs. Instead, it is designed to offset the charges and allow individuals to receive their medications at a reduced cost. Prices for various drugs can change at any given time, but your plan’s formulary will reflect that.
Prescription Coverage Stipulations
If you receive coverage through Medicare Part A and/or Part B, you can opt to enroll in Part D coverage as well. Keep in mind that many people are automatically enrolled in Original Medicare upon their 65th birthday but prescription benefits would require additional steps. Medicare Advantage recipients can also opt for medication benefits, however, it would all be administered under one plan rather than three separate parts.
Some individuals have health insurance through a spouse or employer, and in some cases, these plans already include benefits for prescription medication. Check with your current plan administrator to find out what benefits you already receive before opting for Part D coverage.
As you approach age 65, keep in mind that you only have a specific period of time to enroll in Part D benefits. If you choose to forego enrollment but decide to opt for benefits later on, a late enrollment penalty may apply. Medicare offers an Annual Election Period that allows you to make changes to your coverage, so your initial Part D selection is not necessarily the set of benefits you will have for the remainder of your retirement.
Take some time to consider whether Part D benefits would meet your needs – for some, their medication use is limited and therefore paying an extra monthly premium doesn’t make sense. Others have a wide range of prescriptions that are expensive, and having the additional coverage helps to relieve them of that financial burden.