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Prescription Drug Coverage

Medicare Part D is prescription drug coverage, and it helps cover the cost of prescription drugs. Part D is available to any individual with Medicare Parts A and/or B, and each Part D plan covers its own list of covered drugs that is subject to change at any time. We recommend Part D beneficiaries to review their plan annually to ensure that they are on the best plan.

First off, do you NEED a Medicare Part D drug plan?

Technically, the Medicare Part D drug plan is an elective form of Medicare coverage so you don’t have to enroll in one. Healthy Medicare recipients often question the need to purchase drug coverage if they do not take medications yet.

However, while the plan is optional, there are penalties for not enrolling when you are first eligible.  These penalties are only realized if you decide to take the Part D drug plan at some point in the future. In addition, you may end up paying a higher premium if you enroll later.

Even if you don’t tend to take medications now, it may be wise to at least pick up the lowest cost Medicare Part D drug plan in your area to have coverage just in case and to also avoid the Part D penalty.  In many states, the most inexpensive Medicare Part D drug plans are less $20/month.

Cost of Medicare Part D in 2018

Medicare Part D drug plans have 4 phases of coverage.

  • Phase 1 – Deductible Phase: The Annual Deductible is the amount you have to pay before your Medicare Part D plan begins to pay its share in drug costs. During this phase, you must pay the full cost of your drugs. Deductible amounts vary from plan to plan. Some Part D plans do not have a deductible. In 2018, Medicare Part D plans will not have a deductible more than $405.
  • Phase 2 – Initial Coverage Phase: After you’ve met the deductible, you will enter the Initial Coverage Phase, in which you and Medicare start sharing the cost of your prescription drugs. As a Part D beneficiary, you will pay 25% of your drug costs in the form of copayments or coinsurance until you reach your initial coverage limit of $3,750 in 2018. (Your drug plan will pay 75% of your drug costs.) After you reach your Initial Coverage Limit of $3,750, you will enter the next phase, known as the infamous “donut hole.”
  • Phase 3 – Secondary Coverage Phase or Coverage Gap (AKA “the Donut Hole”): The Donut Hole is the phase in which your drug plan stops paying, and you are responsible for the cost of your medications until you have reached $5,000 in your total true out-of-pocket (TrOOP) within the calendar year. While in the Donut Hole, you will pay 44% of the cost of generic medications and 35% on brand name medications. Once you have reached $5,000, you enter the next phase, which is called Catastrophic Coverage.
  • Phase 4 – Catastrophic Coverage: In the Catastrophic Coverage Phase, you will pay a low-fixed price for your medications in copayments and coinsurance. You will not pay more than 5% of the retail cost for medications covered by the plan.

Refer to the chart below to look at Medicare Part D costs in 2018.

Medicare Part D Costs in 2018

How to Enroll in a Medicare Part D Plan

Please note that GoMedigap does not sell Medicare Part D plans, but we would be happy to explain how Part D works and how to shop for drug coverage. Just call us at (866) 894-3258 and a GoMedigap agent can help you!

To learn which drug plans are your best options, you must first visit the Medicare’s Prescription Drug Plan Finder tool. Simply enter the medications (including information such as name, dosage, and frequency) you currently take into the tool. The results page will then show a list of drug plans that are the most affordable based on the medications you take. This list allows you to look at the details of each plan to help you determine which one you are most comfortable with.

Most people will choose one of the top three plans listed on the results page based on factors such as savings, insurance company, and various features. For example, some plans have a deductible while others do not. In addition, keep an eye out for inconveniences such as step therapy and quantity limits.

When You Should Enroll in a Part D Plan

If you are enrolled in Original Medicare (Parts A and/or B), you can enroll for prescription drug coverage during your Initial Enrollment Period (IEP), which is the 7 month period encompassing the 3 months before, during, and 3 months after your 65th birthday.

You can also enroll in Part D during the Annual Election Period (AEP), which runs yearly from October 15 to December 7.

For more information on key enrollment periods to be aware of, please check out our handy Medicare Enrollment Period Chart.

Review Your Medicare Part D Drug Plan Options Annually

Part D plans can change their formulary and benefits each year so it is a good idea to review your drug coverage annually. Even if your medications don’t change, it is possible to save more money on a different plan.


GoMedigap does not sell Medicare Part D plans, but we would love to help you determine which plan makes the most sense for you. Simply call us at (866) 894-3258, and one of our agents can help you enter your prescriptions (name, dosage, and frequency) into the government Prescription Drug Plan Finder tool, free of charge as always. This will most likely save you money and your sanity!

Please note that the only way you can enroll in Part D is through Medicare. You can call 1-800-MEDICARE (1-800-633-4227) or enroll online. You can also call the plan you are interested in for more information.

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