Choosing Your Prescription Drug Plan

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Medicare offers many choices when choosing prescription drug coverage. Medicare beneficiaries can choose a new Medicare Part D prescription drug plan each year during an annual enrollment period from October 15 to December 7.

It’s a good idea to shop around for a new plan even if you’re happy with your current coverage because premiums, covered medications, and out-of-pocket costs for many plans can change each year. While you’re always automatically renewed in the same plan from one year to the next, simply comparing new plans can often save you money and out-of pocket costs.

To get Medicare drug coverage, you must join a plan offered by an insurance company or other private company approved by Medicare. Each plan varies in cost and drugs covered.

Experimental drugs generally are not covered.

Late-enrollment Penalty

Many Medicare recipients are unaware they must enroll in a Part D plan once they become eligible for Medicare, even if they currently do not take medication or need prescriptions.

If you don’t enroll in a Medicare prescription drug plan when you’re first eligible or if you go without prescription drug coverage for a period of 63 or more days in a row after you qualify, you may have to pay a late-enrollment penalty.

This IS NOT a one-time penalty, the penalty is annual and may increase each year. Also, you may have to pay this penalty for as long as you have a Medicare prescription drug plan. Remember to ask a agent which Part D plan is right for you.

Your Costs and Medicare Limits; the Donut Hole

The Majority of Medicare Prescription Drug Plans have a coverage limit on what the plan will cover for drugs, known as the donut hole. The donut hole is reached when the combined cost of your prescription deductibles, plus the difference of what the insurance company pays, reaches $2,960.

Each Medicare Prescription Drug plan sets the price for specific drugs with the pharmacy whether you buy through the mail or at a pharmacy. It is a good idea to research different Medicare Part D plans to determine what their discounted prices will be. This will help you know when you can expect to reach the coverage gap (donut hole).

Once you reach the coverage gap (donut hole) expect to pay 65% for the price of generic drugs and 45% for name-brand drugs.

Additionally, expect to pay 45% of pharmacy fees, also known as dispensing fees, when you fill your generic drug prescriptions. These dispensing fees are not included in your discount for name-brand drugs but are included when calculating the discount for generic drugs.

Every month that you fill a prescription, your Medicare Part D drug plan mails you an explanation of benefits (EOB) telling how much you’ve spent on Medicare Part D covered prescription drugs.

Avoiding the Medicare Drug Coverage Gap—the Donut Hole

Some people automatically qualify for Extra Help if they meet certain income and resource limits. Call your agent at (866) 395-4789 to be certain you are paying the correct amount. You may also request a call to speak with a licensed professional.