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A Basic Buyer’s Guide to Medicare Prescription Drug Coverage

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Medicare prescription drug coverageWith Medicare Open Enrollment now underway until December 7, you may be starting to reconsider your coverage and decide whether you want to switch to a different policy. Or maybe you’re a first-time enrollee and are looking for some more information on which plan you should sign up for and what benefits are worth considering. Either way, it’s important to know what your options are so that you can commit to the best Medicare prescription drug coverage for you. Thankfully, you still have plenty of time to do so before the enrollment period ends.

One of the main aspects you should consider is buying medical prescription insurance — also known as Medicare Part D. It’s the Medicare plan that covers drug prescriptions and is typically purchased in conjunction with other policies or as part of a supplement package. However, you may be unsure if you need this type of insurance, or how you should combine it with other health care policies if you do decide to get it.

This article aims to answer some of your questions and provide a clear-cut, essential buyer’s guide to Medicare prescription insurance in your market.

Where can I find prescription drug coverage?

If you want to get insurance coverage for prescription drugs, you have several options. Medicare’s drug coverage is offered through plans run by private insurance companies that are approved by Medicare. This coverage can come in two choices: Medicare Part D (the Medicare Prescription Drug Plan) or Medicare Part C (the Medicare Advantage Plan).

Part D adds on drug coverage to an existing Medicare plan like Original Medicare, a Medicare Medical Savings Account Plan, or some Medicare Private Fee-for-Service Plans. Part C, on the other hand, is a more comprehensive policy that includes Medicare Part A (Hospital Insurance) or Part B (Medical Insurance) coverage in addition to Part D.

However, before you buy Medicare drug coverage, make sure that it works with your other medical plan, or isn’t already covered by another form of insurance that you have. Employers or unions might automatically enroll you in a drug plan along with your regular coverage. This can also happen at the Department of Veterans Affairs, the Indian Health Service, or a Medigap policy (Medicare Supplement Insurance). If you already have a drug policy included, then you should talk to your insurer to understand whether getting Part D is necessary.

What do drug plans cover?

A Medicare drug plan covers a specific list of prescriptions, known as a formulary. This list is organized by different “tiers,” each with their own cost. For example, drugs on a lower tier will be cheaper than drugs on a higher level. In some cases, you can get exceptions for particularly necessary drugs that are more expensive and would require a high co-payment that you can’t afford.

Each Medicare drug plan has its own list of covered drugs (formulary). Many Medicare drug plans place medicines into different “tiers” on their formularies. Drugs in each tier have a separate cost.

A drug in a lower tier will generally cost you less than one in a higher level. Sometimes, if your prescriber thinks you need a medication that’s on a higher tier, you or your prescriber can ask your plan for an exception to get a lower copayment.

How much do they cost?

Medicare drug policies operate on the general principle that you will need certain prescription drugs if you fall ill and that you will be willing to pay for insurance because the actual cost of many drugs is so much higher. Medicare pays a predetermined part of the price for your prescriptions and leaves the rest up to you (a copayment). This includes charging a monthly premium and having a yearly deductible (the amount you have to pay out of pocket before your drug policy kicks in).

Along with covering the deductible, premium, and copayment, there may be other costs, like a coverage gap or a late enrollment penalty. Several other factors vary the price of your insurance. Most importantly, the drugs you use and specific plan that you choose. Your costs also depend on whether you go to a pharmacy in your plan’s network, as well as whether the drugs you need are approved by your policy (listed on the formulary). But, you can get Extra Help (a Medicare policy) to help pay for your drug policy if you are low-income or meet other criteria set forth by Medicare.

How do I join?

Once you choose which plan you’d like to enroll in, you can do so during the Medicare Open Enrollment period (October 15 to December 7). Contact us to find out more about enrolling in a plan before the deadline.

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Category: Medicare Part D