Does your parent or grandparent rely on prescription medications to manage their health? As they age, the cost of these medications can add up quickly, creating an unexpected financial burden.
In this guide, we’ll break down everything you need to know about Medicare Part D, from how it works to choosing the right plan for your family’s needs. We’ll also cover costs, enrollment periods, and resources to help you navigate the often-complex world of prescription drug coverage.
What is Medicare Part D?
Medicare Part D is an optional prescription drug coverage program. Unlike Parts A and B, which are included in Original Medicare, Part D is offered through private insurance companies contracted with Medicare. It’s designed to help you and your family afford the medications your parent or grandparent needs.
Part D coverage isn’t automatic; you’ll need to actively enroll in a plan. These plans vary in terms of cost, covered medications, and pharmacies you can use. To find the most robust plan, compare plans and choose one that best fits your loved one’s medication needs and budget.
Who is Eligible for Medicare Part D?
Eligibility for Medicare Part D is straightforward. If your parent or grandparent is entitled to Medicare Part A (hospital insurance) or enrolled in Part B (medical insurance), they can join a Medicare drug plan. This applies even if they have other prescription drug coverage, such as through an employer or retiree plan. It’s worth exploring Part D as an option to compare costs and coverage with their existing plan.
Enrollment Periods in Medicare Part D
There are specific times when you can enroll in a Part D plan:
- Initial Enrollment Period (IEP): This seven-month period begins three months before the month they turn 65 and ends three months after. It’s crucial to enroll during this period to avoid late enrollment penalties, which can increase the monthly premium.
- Annual Enrollment Period (AEP): If they miss their IEP or want to switch plans, the Annual Enrollment Period runs from October 15th to December 7th each year. Changes made during this period take effect on January 1st of the following year.
- Special Enrollment Period (SEP): Certain situations, such as losing other drug coverage, moving, or entering a nursing home, may qualify your parent or grandparent for a Special Enrollment Period. This allows them to enroll in Part D outside the regular enrollment periods.
If your parent or grandparent doesn’t enroll in Part D when first eligible and doesn’t have other creditable drug coverage, they may have to pay a late enrollment penalty. This penalty is a percentage added to their premium each month for as long as they have Part D.
How Does Medicare Part D Work?
There are two main ways to get Medicare prescription drug coverage:
- Medicare Advantage Plans with Part D (MA-PDs): These plans bundle Medicare Parts A, B, and D together, offering a convenient all-in-one option. Many Medicare Advantage plans include prescription drug coverage, simplifying the enrollment process.
- Standalone Part D Plans (PDPs): If your family member has Original Medicare (Parts A and B), they can choose a standalone Part D plan from a private insurance company. This option allows them to keep their existing doctors and hospitals while adding prescription drug coverage to their plan.
Understanding Formularies (List of Covered Drugs)
Each Part D plan has its own formulary, which is a list of covered prescription drugs. While plans are required to cover a wide range of commonly used medications, the specific drugs included in each formulary can differ. Before enrolling in a plan, carefully review the formulary to ensure it includes the medications your parent or grandparent regularly takes. You can usually find the formulary on the plan’s website or by contacting the plan directly.
It’s also a good idea to check if your parent or grandparent’s preferred pharmacy is in the plan’s network, as this can affect their out-of-pocket costs.
If a senior has limited income and resources, they may qualify for Extra Help, a program that helps pay Part D costs like premiums, deductibles, and coinsurance.
What Does Medicare Part D Cover?
Part D plans must cover a wide range of prescription drugs that people with Medicare commonly use. This includes most drugs in certain “protected classes,” such as medications to treat cancer or HIV/AIDS.
Part D typically covers:
- Most Prescription Drugs: Part D covers most medically necessary medications, including both brand-name and generic drugs used to treat various conditions like high blood pressure, diabetes, and heart disease. Part D plans typically allow for prescription refills, but the specific rules may vary from plan to plan.
- Insulin: All forms of insulin, even those used with insulin pumps, are covered by Part D. Thanks to the Inflation Reduction Act, the cost of insulin is capped at $35 for a one-month supply.
- Vaccines: Some Part D plans may also cover certain vaccines, such as the shingles vaccine. But coverage for vaccines can vary, so check with your specific plan to see what is included.
- Medication Therapy Management: Part D plans offer Medication Therapy Management (MTM) services to eligible beneficiaries. This program provides personalized support from pharmacists or other healthcare professionals to help seniors understand their medications, manage potential side effects, and ensure they’re taking them safely and effectively.
- Opioid Use Disorder Treatment: Part D covers medications like buprenorphine and methadone used to treat opioid use disorder. For certain medications — opioids included — Part D plans may have drug management programs to ensure safe use. These programs might require prescriptions from a specific doctor or pharmacy, or involve safety reviews.
Formularies and Tiers
Each Part D plan has its own list of covered drugs, called a formulary. Formularies are often organized into tiers, with each tier having a different cost. Lower tiers usually have lower copays or coinsurance, while higher tiers may cost more. If a medication mom or dad needs is in a higher tier, their doctor can request an exception from the plan to lower the cost.
Keep in mind that formularies can change throughout the year, and your plan should notify you of any changes affecting medications your family member takes.
What Medicare Part D Doesn’t Cover
Generally, Part D focuses on drugs deemed medically necessary for treating specific conditions, not those typically used for everyday ailments or enhancements.
Here are some common exclusions under Medicare Part D:
- Over-the-Counter Drugs: Most over-the-counter medications, such as cold and cough medicines, pain relievers, and allergy medications, are not covered by Part D. This is because they are readily available without a prescription. However, there are exceptions for certain over-the-counter drugs that may be prescribed for specific medical conditions.
- Weight Loss or Weight Gain Drugs: Medications specifically intended for weight loss or weight gain are generally not covered by Part D, unless they are prescribed to treat a specific medical condition.
- Cosmetic Drugs and Hair Growth Products: Drugs used primarily for cosmetic purposes, such as those for hair growth or wrinkles, are not covered. However, medications used to treat specific skin conditions like psoriasis or eczema may be covered.
This isn’t an exhaustive list, and coverage can vary depending on the specific Part D plan you and your family choose. Always review the plan’s formulary and consult with a healthcare professional or pharmacist for guidance on coverage and potential alternatives for medications that may not be covered.
Medicare Part D Costs
Just like any other insurance, Medicare Part D comes with certain costs. Understanding these can help you plan your budget and choose a plan that best fits your family’s needs.
Premiums
The amount you pay each month for your Medicare Part D plan is called the premium. Premiums vary depending on the specific plan you choose and your income. You’ll pay this premium each month, even if you don’t need any medications that month.
Deductibles
Most Part D plans have an annual deductible, which is the amount you pay for covered drugs before your plan starts to pay. The deductible can vary depending on your plan, and some plans may have no deductible at all.
Copayments or Coinsurance
After you’ve met your deductible, you’ll usually pay either a copayment (a fixed dollar amount) or coinsurance (a percentage of the cost) for each prescription. The amount you pay depends on the plan’s formulary and the specific drug you’re taking.
Coverage Gap (“Donut Hole”)
Some Part D plans have a coverage gap, also known as the “donut hole.” This occurs after you and your plan have spent a certain amount on covered drugs ($5,030 in 2024). While in the coverage gap, you’ll pay a higher percentage of the cost of your drugs. But you’ll still get some discounts from the drug manufacturers.
Catastrophic Coverage
After you’ve spent a certain amount out-of-pocket for covered drugs ($8,000 in 2024), you’ll be entitled to catastrophic coverage. Once you have catastrophic coverage, you’ll only pay a small coinsurance or copayment for the rest of the year.
Income-Related Monthly Adjustment Amount (IRMAA)
If your income is above $103,000 when filed individually or $206,000 jointly, you may have to pay an extra amount in addition to your plan premium. This is called an Income-Related Monthly Adjustment Amount (IRMAA). Social Security will contact you if you have to pay an IRMAA.
How to Choose a Medicare Part D Plan
Nothing’s more important than mom and pop’s health at this stage in their lives. Here’s how to find the best medicare plan for them:
1. Consider Your Family’s Needs
Think about the following factors:
- Medications: Make a complete list of all prescription medications your parent or grandparent takes, including the dosage and frequency. This will help you identify plans that cover their specific drugs.
- Pharmacy Preference: If they have a preferred pharmacy, check which plans include it in their network.
- Costs: Compare monthly premiums, deductibles, and copayments or coinsurance across different plans. Consider your family’s budget and how much they can afford to spend on prescription drugs.
- Additional Benefits: Some plans offer extra benefits beyond basic drug coverage. These may include coverage for over-the-counter medications or additional gap coverage. Assess whether these benefits are important to your family.
2. Compare Plans with the Medicare Plan Finder:
The Medicare Plan Finder tool on Medicare.gov is a valuable resource for comparing different Part D plans in your area. It allows you to enter a senior’s medications and pharmacy preferences to see which plans best suit their needs.
3. Seek Guidance from Experts
Don’t hesitate to seek help if you need it. Licensed insurance agents who specialize in Medicare can provide personalized guidance and answer your questions. You can also contact your State Health Insurance Assistance Program (SHIP) for free, unbiased counseling.
By considering your family’s needs, comparing plans, and seeking guidance when needed, you can find a plan that offers comprehensive and affordable coverage for your loved one’s medications.
12 Oaks: Your Partner in Senior Care
At 12 Oaks, we understand that nothing is more precious than the health and well-being of your aging parents or grandparents. As they transition into their well-deserved retirement years, their health needs evolve, and it’s natural to seek reassurance that they have the right support in place.
We believe that a healthy and fulfilling retirement goes beyond just medical care. It’s about fostering an environment where seniors can thrive physically, mentally, and emotionally. Our compassionate team is dedicated to creating a vibrant community that encourages social interaction, promotes physical activity, and provides access to nutritious meals and a range of engaging activities.
Contact us today to learn more about how 12 Oaks can provide a haven of health and happiness for your parent or grandparent as they embrace their golden years.
