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Medicare Part D (prescription drug coverage)

When comparing plans, it’s important to understand how Medicare Part D works.



What is Medicare Part D? Who is eligible for Part D?

Medicare Part D covers prescription drugs. It’s available to everyone who has Part A and/or Part B, but it’s only offered through private health insurance plans. You have to enroll in Part D separately.

You don’t have to sign up for Part D, but it’s a good idea to do so when you’re first eligible for Medicare. If you go too long without Part D coverage – or other drug coverage that’s as good as what’s required by Medicare – you could face a Part D late enrollment penalty when you do choose to enroll in Medicare Part D.

HealthPartners UnityPoint Health (PPO) Medicare Advantage plans, available in parts of Iowa and Illinois, include Part D coverage. With our Medicare Advantage plans, you’ll get medical and prescription drug coverage all together in one plan. That means you won’t need to add a separate Part D plan.

The four stages of Medicare Part D

Knowing how much coverage you’re getting under Medicare Part D can be confusing. To make things easier to understand, imagine it’s kind of like a board game. There are four Part D stages – as you spend money on covered drugs during the year, you’ll move through each stage just like you would move through the squares on a game board. On January 1, you’ll start over no matter where you were on the board.

1. Deductible stage

To begin, it’s important to understand that your plan has a Part D formulary (drug list) that organizes medicines into different tiers. What Part D drugs are covered depends on each plan, which is then approved by Medicare.

In general, medicine in lower tiers will cost less than medicine in higher tiers:

  • Tier 1: Preferred generic drugs
  • Tier 2: Generic drugs
  • Tier 3: Preferred brand drugs and select insulin drugs
  • Tier 4: Non-preferred drugs
  • Tier 5: Specialty drugs

Most Medicare Part D plans have a deductible. That means there’s a certain amount of money you have to pay before the plan kicks in. While in the deductible stage, you’ll pay 100% of your prescription costs until you meet your deductible.

The good news? HealthPartners UnityPoint Health plans don’t have a deductible. That means your plan shares the cost of your drugs right away.

2. Initial coverage stage

After you’ve met your deductible – or if, like HealthPartners UnityPoint Health, your plan shares the cost of your drugs immediately – you’ll move into the initial coverage stage.

In this stage, your plan helps cover your prescription costs. You’ll typically pay a copay (a set amount of money) or coinsurance (a certain percentage of the cost) each time you fill a prescription.

How do you know what you’ll pay? Just refer to your plan’s formulary (drug list).

If you have a limited income, you may qualify for extra help to pay your prescription drug costs. Medicare’s Extra Help program assists with the cost of prescription drug coverage – like monthly premiums and annual deductibles.

3. Coverage gap stage (“donut hole”)

If you and your plan have spent a certain amount on covered medicine, you’ll move on to the coverage gap stage, also known as the “donut hole.”

The amount of spending required to enter the coverage gap stage may change from year to year and can be found in your plan’s documents. It’s important to keep track of your prescription spending. That way, you’re not surprised when you hit the coverage gap.

During this stage, you’ll pay no more than 25% coinsurance for your prescriptions. Some plans offer additional coverage during the coverage gap stage – be sure to check whether your plan offers this kind of coverage.

4. Catastrophic coverage stage

You’ll leave the coverage gap and enter the catastrophic stage if you’ve spent a certain amount of money for covered medicine. This amount is called your “year-to-date out-of-pocket costs.” Like before, the amount of spending required to enter the catastrophic coverage stage may change from year to year and can be found in your plan’s documents.

People who use high-priced medicine, like injectable drugs or drugs for complex conditions, are more likely to reach this stage. Here, you’ll either pay a copay or coinsurance.

How to learn more about Medicare Part D

We have a lot more information about Medicare Part D available, including:

You can also call Member Services at 888-360-0544 (TTY 711) any time you need help. We can answer your Medicare Part D questions, as well as any other questions about your plan.

  • Oct. 1 – March 31: 8 a.m. to 8 p.m. CT, 7 days a week.
  • April 1 – Sept. 30: 8 a.m. to 8 p.m. CT, Monday through Friday. On weekends and federal holidays, leave a message and we’ll get back to you within one business day.

Legal information

Last updated October 2020

H3416_000403 Accepted

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