As we age, we need to ensure that we have proper insurance to help in the case of a medical emergency. Accidents and injuries can sneak up on us, and insurance helps offset these unexpected costs. This is why Medicare is so essential. Medicare is health insurance sponsored by the federal government and primarily used by those over the age of 65. It is divided up into four primary categories; one such category is Medicare Part D.
Don’t be worried if Medicare seems confusing – that’s where we can help you and you should remember to check out medicare supplement insurance. Finding an insurance agent is also a good way to guarantee finding the coverage you need and if you would like to reach out to us, we’re always happy to help. Keep reading to find out more essential information about Medicare, including the answer to the question: what is Medicare Part D?
Medicare Part D
As we’ve described, Medicare is a program from a federal government that provides insurance for the eldery. Medicare covers a range of services, from emergency care to outpatient treatment. This range is why Medicare is divided into four parts: Part A, Part B, Part C, and Part D. Each part is different and has its own approach, which is why we’ll first cover exactly what Medicare Part D is.
To start with a simple definition, Medicare Part D is a plan for prescription drug coverage. Unlike Medicare Part A and Part B, Medicare Part D is administered through private insurance companies that have been approved by the federal government. These companies must follow Medicare guidelines.
Prior to Medicare Part D, many people had little assistance with the cost of their pharmaceutical drugs and retail needs. If you had a chronic condition that required consistent use of retail drugs, the cost could quickly become more than you could handle. With Part D on your Medicare plan, that cost can be lowered to a monthly payment for the insurance carrier and copays on medication. A copay is a fixed cost you pay for a covered health insurance service, and is only a fraction of the cost of the overall, uncovered service.
- Who is Medicare Part D For?
Now that you know more about what Medicare Part D actually is, let’s break down who can benefit from it. Medicare in general is meant to be used by anybody over the age of 65 years old. Young people with certain disabilities or those struggling with permanent kidney failure and in need of a transplant or dialysis can also qualify. As long as you meet at least one of these categories, Medicare (and Part D by extension) is for you.
In terms of Medicare Part D specifically, it is meant for those who require prescription drugs. You may not find Part D beneficial if you don’t require many trips to the pharmacy, but if you struggle with a chronic or frequently recurring condition you will quickly find that Medicare Part D is a huge benefit, typically.
- General Advantages and Disadvantages
Since Medicare Part D partners with private insurance companies, there will be some differences in how it applies to each person. Despite this, there are some general advantages and disadvantages to Medicare Part D that will hold true. Let’s review them, beginning with the advantages.
- Certain plans for Medicare Part D can provide you with customizable coverage options So you might be able to increase or decrease your coverage needs (and therefore cost), as your situation changes.
- High-cost prescription drugs will be more affordable thanks to the coverage that Medicare Part D offers.
- You can have Medicare Part D either included in Medicare Original or in Medicare Advantage, making it more easily accessible.
Now, let’s cover some potential disadvantages.
- The differences in plans and coverage mean you need to do more research to find what is right for you so it’s important to know that not every plan offers the same benefits.
- You will need to anticipate your prescription needs, since coverage for certain drugs can differ. This is fine for those with chronic conditions, but any surprise accidents may not be covered.
- If you are late to enroll, there could be a late enrollment penalty or an LEP (late enrollment penalty). We will cover this in more depth later in the article!
Now that we’ve reviewed Medicare Part D and some of its pros and cons, it is time to go into the finer points of gaining coverage.
How Medicare Part D Works
Let’s cover exactly how Medicare Part D works, and how to obtain coverage. This may seem confusing, but it is actually simpler than it appears! Remember that if you have any concerns or questions, one of our agents will be able to help you so don’t hesitate to reach out. He will also show you the difference between medicare vs medicaid.
Medicare Part D is provided by private insurance companies. Once you find a company that works for you, the next step is paying a monthly premium. A premium is a monthly fee that you pay to your insurance company in order to use their services. Once your premium is established, you can use the pharmacies and drugstores in your insurance company’s network for all your prescription drug needs.
- Understanding Medicare Part D
One important thing to understand about Medicare Part D is that it is technically optional, meaning that simply enrolling in Original Medicare (Parts A and B) does not grant you access to Part D. You can either add Part D to Original Medicare, or get a Medicare Advantage Plan (otherwise known as Part C) which includes prescription drug coverage. So don’t just assume that enrolling in Original Medicare will mean that your prescription drugs will be covered. They will not!
If you miss the Initial Enrollment Period (IEP) for Medicare Part D, you will need to wait until the Open Enrollment Period to apply for coverage. This means there may be a period of a few months where you have no coverage, so it is best to apply as soon as possible once the IEP is open. In addition, missing your IEP will begin a late enrollment penalty that lasts throughout your coverage.
- What does Medicare Part D cover?
Medicare Part D is meant to offer some coverage for your prescription drug costs, but not cover everything. Instead, you’ll pay a smaller percentage of the total cost of most drugs while your insurance company handles the rest. The covered retail drugs and pharmacies that will accept your insurance also depends on your insurance company’s network.
Despite the differences, most Medicare Part D plans cover at least the generic versions of name brand drugs. In order for an insurance company to be approved by Medicare, they must allow coverage of at least most of the following categories of drugs:
- Anticancer drugs
- Vaccines and shingles shots
As you can see, that is quite an array of coverage and most of it is essential for daily life. As always, your own unique company coverage may change slightly. Speak to a qualified agent about the drugs or services that absolutely must be covered to find the right plan for you.
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How Much Does Medicare Part D Cost?
It can be tough to figure out how much Medicare Part D costs on average since plans vary so much. However, there are still several categories that will guide how much you are paying. The first, as we’ve already discussed, is the monthly premium owed to your insurance company.
Monthly premiums can sometimes depend on income, and a single person making over $88,000 a year or a couple making more than $176,000 a year can expect to pay a higher premium. The amount you pay will depend on Modified Adjusted Gross Income (MAGI). MAGI is the figure used to determine eligibility for premium tax credits and other savings for Marketplace health insurance plans and for Medicaid and the Children’s Health Insurance Program (CHIP). For many people, MAGI is identical or very close to adjusted gross income.
In addition to the premium, you will also be paying a deductible. A deductible is how much money you must pay before your insurance plan coverage kicks in. Depending on your coverage, you may also need to pay copays as we have discussed in the article.
Finally, the late enrollment penalty that comes from missing your Initial Enrollment Period can add slightly to your overall costs as the years pass. To summarize, for Medicare Part D you will be paying the cost of your monthly premium, deductible, and copays with the possible addition of an LEP.
How Does Part D Work With Other Insurance?
Since Medicare Part D is offered by private insurers, you may be wondering how it functions with other insurance you have. Some separate, non-Medicare insurance may already offer you drug coverage, so it is important to know how Medicare Part D works with this and if any other plans you might have can be used in conjunction with Part D or can be used to keep you fully covered.
Medicare Part D is able to coordinate benefits with your separate insurance provider. Your “primary insurance”, whether that be Medicare or another company, will typically offer first coverage for prescription drugs. The second insurance company (again, it can be Medicare or another insurer) will then step in and provide additional coverage up to the limit of that plan.
Whether or not Medicare is your primary or secondary insurance depends on your plan. An insurance agent will be able to help you sort out these specifics; until then, you can rest easy knowing that Part D does work with other insurance.
What Are the Main Benefits of Medicare Part D?
By now, you have an accurate sense of what exactly Medicare Part D contains and how it can be used by you. Before we conclude, let’s review and summarize the primary benefits of Medicare Part D so that you can begin to determine whether or not it is right for you.
- Coverage for long-term costs. This is a primary benefit, especially for people who struggle with chronic conditions. Heart disease, asthma, or high cholesterol and blood pressure are all examples of costly, repeat medicines that can have a reduced cost thanks to coverage from Medicare Part D.
- You do not need to re-enroll each year. Once you have Medicare Part D, you generally do not need to enroll again each year. This makes the process easier! While benefits and coverage for specific plans may change, you don’t need to worry about enrolling again.
- Flexibility. One of the main benefits of Medicare Part D that should be stressed is the flexibility that the plans typically offer. A Part D plan can typically work with your other forms of insurance, including Original Medicare and Medicare Advantage, and be changed each year according to your needs. This flexibility is why many people prefer Medicare Part D.
Is Medicare Part D Worth It?
Finally, you are probably asking yourself if Medicare Part D is worth it. Insurance can be complicated, and if you do not have a chronic condition it can be easy to assume you will not need the coverage that Medicare Part D provides. However, this is a risky mindset. As we age, we become more prone to such chronic conditions, as well as the potential for general accidents that will require prescription drugs. And again, when you’re enrolled in Original Medicare, if you don’t already have a private drug insurance coverage, then you will need Part D or else your prescription drugs will not be covered. Sometimes it’s better taking a different option, like long term care insurance, if this one doesn’t suits you.
Because the costs for prescription drugs without insurance can be so high, Medicare Part D is worth it for many people. You will be offered coverage that can combine with your current plans, making it easy to obtain. In addition, you do not have to stick with Medicare Part D if you decide it is not for you. For these reasons, Medicare Part D is certainly worth it.
Where Can I Find Out More and Get Advice on Medicare Part D?
Today, you can find multiple Medicare insurance consultants on the internet. However, choosing the right advisor is important.
At Policy solver we have knowledgeable, licensed agents, and are here to help you navigate through your Medicare and of course, Medicare Part D insurance journey. We are a team of professional insurance policy brokers and we can save you time and money, while finding the right policy for your specific needs.
Our experienced advisors will ask you a few questions to understand your unique situation and will come up with a comprehensive analysis of different insurance plans so they will be able to recommend the best policy at the best price for you.
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“Drug Coverage (Part D).” Medicare, https://www.medicare.gov/drug-coverage-part-d.
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“How to Get Prescription Drug Coverage.” Medicare, https://www.medicare.gov/drug-coverage-part-d/how-to-get-prescription-drug-coverage.
Sandroff, Ronni. “What Is Medicare Part D? What It Costs and Covers.” MedicareGuide.com, 5 Nov. 2021, https://medicareguide.com/medicare-part-d-124231.
How Does Medicare Part D Work with Other Insurance? https://www.ehealthmedicare.com/medicare-part-d-articles/how-does-medicare-part-d-work-with-other-insurance/.