Medicare Part D
Prescription Drug Coverage
Medicare beneficiaries access prescription drug coverage through Part D. Medicare Advantage policyholders usually receive this benefit within their plan, while Original Medicare participants with or without a Medicare Supplement (Medigap) policy will need to add their coverage through a Stand-Alone Part D plan.
Because Original Medicare doesn’t include prescription drug coverage, Part D plans are always offered by Medicare-approved private insurance companies. They offer various drug formularies (covered drug list), monthly premiums, and pharmacy networks. While drug costs vary from plan to plan, they must cover (at a minimum) standard Medicare cost-sharing.
- To qualify for a Part D plan, you must be enrolled in Medicare Part A and/or Part B.
- Medicare Beneficiaries who do not enroll into a Part D Plan and do not have other Creditable Coverage will incur a 1% Late Enrollment Penalty (LEP) of the current National Drug Premium average for every month they do not have coverage.
How to Find Out Your Medication Costs
With so many companies to choose from, how can you determine the most cost effective plan for your needs?
Medicare Advantage plans that include Part D coverage will vary by service area. For example, the prescription drug coverage in Los Angeles County may differ significantly from a plan in Santa Barbara County. This can even apply to plans offered by the same insurance carrier. Medicare Advantage plans are assigned a specific formulary (covered drug list) and cost-sharing according to their Summary of Benefits.
Stand-Alone Part D plans are specific to 34 geographic regions established by CMS (Centers for Medicare and Medicaid Services). California is one of these regions. There are numerous options available in California and some companies will offer 2 or 3 plans with different formularies and medication cost-sharing.
Formulary and cost-sharing information will be available on Medicare’s website and the plan website. If we are working with you on your coverage options, we will review your medications and do the research for you. This is why it’s important to use a licensed insurance agent that is contracted with multiple plans instead of just one.
Each year you will receive an Annual Notice of Change (ANOC) and this may affect your Part D coverage for the following year. We work for you, not the insurance company, so when you need to make a change, we’ll assist with your application and ensure you meet Medicare’s enrollment deadlines.