Common Questions

What is Medicare prescription drug coverage (Part D)?

Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. You have two options to get Medicare prescription drug coverage: join a Medicare Prescription Drug Plan (Part D plan) or a Medicare Advantage Plan (like an HMO or PPO) that includes Medicare drug coverage.

Who can get Medicare prescription drug coverage?

Everyone with Medicare is eligible for this coverage, regardless of income and resources, health status, or current prescription expenses.

When can you sign up for coverage?

You may sign up when you first become eligible for Medicare (three months before the month you turn age 65 until three months after you turn age 65.) If you get Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments. If you didn’t sign up when you were first eligible, your next opportunity to join will be in 2010 open enrollment period from November 15, 2009 to December 31, 2009.

What coverage will you receive from Medicare prescription drug coverage?

Each plan’s coverage is different and can vary by cost, coverage and convenience. Some of these factors might be more important to you than others, depending on your situation and your prescription drug needs, so it is important that you compare coverage before choosing a plan that is right for you.

What are the costs associated with Medicare prescription drug coverage?

Like other insurance, if you join, generally you will pay a monthly premium, which varies by plan, and a yearly deductible. You will also pay a part of the cost of your prescriptions, including a co-payment or coinsurance. Costs will vary depending on which drug plan you choose and some plans may offer more coverage and additional drugs for a higher monthly premium. Here are the costs for a “standard benefit plan” (the minimum allowable plan to be offered) in 2010:

• Premium – this is the amount you pay each month to a health or drug plan to be a member. Premiums vary from one plan to another.
• Deductible – the amount you must pay each year for your prescriptions before you Medicare drug plan starts to pay any of the costs. Deductibles vary by Medicare drug plan and some plans do not have a deductible. No Medicare drug plan may have a deductible higher than $310.
• Copayment/coinsurance – this is the amount you pay for each of your prescriptions after you have paid the deductible.
• Coverage gap – some Medicare drug plans have a “coverage gap”, also referred to as the “doughnut hole”. This means that when you and your Medicare drug plan have spent a certain amount of money for your covered drugs, you start to pay all of your drug costs to a certain threshold. In 2010, the initial coverage limit (where the coverage gap begins and where the beneficiary pays 100% of their prescription costs up to the out-of-pocket threshold) is $2,830. You must also continue paying the plan’s monthly premium even while you are in the coverage gap.
• “Catastrophic Coverage” – if your costs in the coverage gap reach a certain amount, referred to as the catastrophic limit, Medicare starts to pay again, and your coinsurance or copayments will likely be much lower than they were before. For plans with a coverage gap, the most you will ever have to pay out-of-pocket in 2010 before you are out of the coverage gap is $4,550. Each state offers at least one Medicare drug plan that helps with coverage during the gap (generally for an extra premium).

How do you change your Medicare prescription drug coverage?

It is important to note that costs and coverage change yearly, so all people with Medicare should check to make sure that their plan still meets their needs and budget every year. There may be a Medicare health or drug plan available in 2010 with better coverage or a lower deductible than your current plan.

If you join either type of Medicare prescription drug plan, each year in the fall you will receive information about plan changes. If you decide to keep your current plan, you don’t need to do anything for your enrollment to continue. However, if you are going to make a change, compare plans and sign up as soon as possible during the open enrollment period to help avoid any inconvenience at the pharmacy when you start using your new plan in January 2010.