Questions and Answers about Medicare Part D

What is Medicare Part D?

Medicare Part D is the prescription insurance coverage program of Medicare. Brand name and generic medications are covered at pharmacies who participate in the program.

Who is eligible?

Anyone who has Medicare, regardless of prescription costs, health status, income, or resources, can get coverage. Seniors age 65 and older are eligible. Eligibility starts the third month before the month of the person’s 65th birthday. 

If a person is eligible for the Medicare Part D benefit, and decides, for one reason or the other, not to enroll, there may be a penalty, for enrolling on a delayed/late basis.  There are a few exceptions to this "rule", however, and it is best for the person to check with the federal goverments website (medicare.gov) in order to explore these exceptions and/or explore their options. 

In order for a person to recieve the benefit from the governement under this plan, they must enroll with company that is "medicare approved."

How does it work?

It is similar to other insurances.

Members pay a monthly premium and have yearly deductibles.

The monthly premium is the cost you pay to join the drug plan.

The yearly deductible is the total you pay for your medications before the Part D plan begins sharing the costs.

Also, members will likely pay copayments or coinsurance on each prescription.

This is the cost of the medication that members are responsible for.

Coinsurance is a percentage of the prescription costs. Depending on which plan the member decides on, the costs will vary.

Those with limited resources and income may not have to pay a deductible or a premium for their Part D insurance.

A potential enrollee may have other insurance coverage before becoming eligible to have this prescription benefit from the goverment. 

Other coverage could be from the VA (Dept of Veterans Affairs), a private insurance plan from the person's employer, a Medigap policy (Medicare coverage as a supplement), coverage from military service (TRICARE), or coverage from another source.

What is the “Donut Hole”?

The “Donut Hole” is a gap in coverage in a members Part D plan.

This is what happens once the members costs accrue to an initial coverage limit.

At this point, the member is responsible for paying 100% of the cost for their prescriptions.

Some coverage in the donut hole is covered by certain plans.

Despite the existence of this coverage gap, members still pay less for their medications than they would without the Part D insurance coverage.

What other factors are involved in the costs for "D" Coverage?

  • A person's current and future prescription drugs.
  • The persons choice of coverage (from a "basic" type plan, to a "cadillac" policy. 
  • A person's choice of pharmacy is a factor.  Their pharmacy must be an "in-network pharmacy", "pre-approved" by their plan.
  • The plan's Formulary is a factor.  A drug formulary is basically a list of approved drugs, both brand name and generics, which the plan covers.  The intended goal of a formulary is to save the covered person and the insurance company money, however, formularies oftentimes cause covered individuals problems.  You can see my related page on Prior Authorizations to find our more, if you like.

In Conclusion

To wrap up this page, and to summarize, we have found answers to questions about the Part D Plan from Medicare.  We've learned what it is, how it works, what a "Donut Hole" is (and we now know it is not something you order at the drive thru at Dunkin Donuts;) and we have also come to understand what other factors may be in play when trying to consider the costs for someone's coverage.

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