PART D - Prescription Drug Plan (PDP)
You can sign up for Part D Prescription Drug Plans, which helps cover prescription drug costs, along with other components of Medicare starting three months before your 65th birthday.
It's important to do this on time because there's a permanent premium surcharge for enrolling more than three months after your 65th birthday if you don't have equivalent drug coverage from another source, such as a retiree plan.
Let us help you with when to enroll.
If you are already enrolled in a Part D "standalone" plan or a Medicare Advantage plan that incorporates drug coverage, you can switch plans during the open-enrollment period, which runs from Oct. 15 to Dec. 7 every year.
Making Part D work
Part D plans have a $435 annual deductible. Some plans pay the deductible for you other plans do not.
Most Prescription Drug Plans have a coverage gap called a donut hole or coverage gap. This means there's a temporary limit on what the drug plan will cover for drugs. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. True out of pocket (TrOOP). For 2020, you're in the coverage gap once you and your plan have spent $4,020 on covered drugs. People with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
Once you reach the coverage gap in 2020, you'll pay no more than 25% of the plan's cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your plan has set with the pharmacy for that specific drug.
Although you'll only pay 25% of the price for the brand-name drug in 2020, 97.5% of the price will count as out-of-pocket costs which will help you get out of the coverage gap.
In 2020, you'll pay 25% of the price for generic drugs during the coverage gap. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.
Once your TrOOP spend reaches $6,350 in 2020, you're out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year. The cost will be $3.60 for generic drugs and $8.90 for brand drugs or 5% of the cost, which ever is greater.
Choosing a plan
It pays to review your Part D coverage every year, especially if you have started taking new drugs.
- Start at Medicare.gov. You can find the basics about the benefit and Part D plans at Medicare's website. There's a link to the Medicare Part D Plan Finder, which allows you to compare offerings and coverage options in your area and includes a helpful formulary finder that allows you to compare plans based on their coverage of your personalized list of drugs. It will even show you your monthly out-of-pocket drug cost for the year.
- Learn more. We recommend consulting the website of the nonprofit Medicare Rights Center. There you can find in-depth information on Medicare Part D.
Getting financial help
Individuals with annual incomes of less than $18,735 and financial resources of less than $14,390, or married couples with incomes of less than $25,365 and resources of less than $28,720, might qualify for Extra Help from Medicare to pay their Part D premiums and out-of-pocket drug costs.
Additionally, read about the six ways to lower your drug costs on Medicare.gov.