What You Need to Know About Part D Drug Plans
Drug Coverage
What are Medicare Part D Drug Plans?
Medicare began offering Part D Prescription drug plans in January 2006. Part D prescription plans are a resource for senior citizens without any other form of prescription drug coverage. Part D can help people with high drug costs, offer protection if drug costs rise or provide assistance if you unexpectedly need a prescription. The Medicare Part D Coverage periods begin January 1st each year.
The Annual Enrollment period for Medicare Part D runs from October 15th to December 7th each year. During this time, you may enroll in a new plan, or make changes to your existing plan, to become effective January 1st of the following year.
Different Part D Prescription plans cover different lists of medications at different prices (this is called the plan’s formulary). You can change your Part D Prescription plan every year during open enrollment to make sure your plan’s formulary matches your specific list of medications.
If you are enrolling in Medicare for the first time, you can join a Medicare drug plan from three months before you enroll in Medicare Part B to three months after your enroll in Medicare Part B (called your Initial Enrollment Period). If you miss this window, you may be charged a penalty.
A general overview of Medicare Part D for 2023 (exact costs will differ depending on the Medicare Part D plan you choose):
- You pay a maximum annual deductible of $505.
- After your deductible is met, you pay a copayment for each prescription, and your plan pays its share for each covered drug until what you both pay reaches $4,660 combined (including what you paid for the deductible).
- When you and your plan have spent $4,660 for covered drugs, you are in the coverage gap (sometimes called the donut hole). For brand name prescriptions, you must now pay 25% and the drug manufacturers cover 75%, and both contributions count toward your total out-of-pocket costs for the year. For generic prescriptions, you will pay 25% and only the amount you pay will count toward your total out-of-pocket costs for the year.
- When you have spent $7,400 out‑of‑pocket for the year, your coverage gap ends and you transition to “catastrophic coverage.” Now you only pay a small copayment for each covered drug until the end of the year.
- On January 1st, your out-of-pocket costs reset, and you start over with a new deductible.
Starting in 2011, Medicare began adjusting the coverage gap percentages to reduce your total out-of-pocket expense for your medications. By 2020, your portion of drug costs in the gap reduced to only 25%, with the drug manufacturers paying 50% and Medicare Part D paying the remaining 25%.
Assistance for Low-Income Medicare Beneficiaries
People on Medicare who fall below certain income limits are eligible for help with paying for their Medicare Part D drug plan’s monthly premium, yearly deductible, and prescription co-payments. In most cases, if you get extra help, you will not pay a premium and will not have a coverage gap.
Qualifying for the Extra Help program from Medicare, also called the Low‑Income Subsidy (LIS), is based on income and available resources. Available resources are considered money you have in stocks, bonds, and bank accounts.
You may qualify for Extra Help if your yearly income and available resources are below the following limits in 2023:
- Single person: Annual income less than $20,385.
- Married person living with a spouse & no other dependents: Annual income less than $27,465.
If you do not qualify for Extra Help through Medicare, you may still be able to find assistance with prescription drugs by calling The Partnership for Prescription Assistance at (888) 4PPA-NOW (477-2669) or by visiting the program’s website at www.pparx.org.
Information for this article was obtained from the Medicare Website. For more detailed information visit www.Medicare.gov.
