Medicare Part D
For many seniors, managing the cost of prescription drugs is near the top of the list when it comes to their health care needs. Original Medicare doesn’t cover medications outside of those given while you’re at the doctor’s office or during a hospital stay. Because of this, many Medicare recipients opt for additional prescription drug coverage.
Medicare Part D is the
- Medicare Advantage plans – Most
Medicare Advantage plansinclude Part D, grouping all your coverage in one plan.
- Stand-alone Part D plans – These plans let you add prescription drug coverage to Original Medicare and several other plan types.
Besides your IEP, your other opportunities to enroll in or switch Part D coverage are during your:
During this period, you can also drop your current plan and go back to Original Medicare. If you go back to Original Medicare or switch to a plan without Part D, you can enroll in a stand-alone Part D plan. Coverage from any new plan starts on January 1 of the next year.
If you’re enrolled in a Medicare Advantage plan with or without Part D coverage, you have an opportunity to change plans during this period each year.
Just like during the AEP, you can switch to a different Medicare Advantage plan or go back to Original Medicare. If you go back to Original Medicare or switch to a plan without Part D, you can enroll in a stand-alone Part D plan.
After certain events, such as moving outside your current plan’s service area or losing your current Medicare plan, you may have a two-month SEP to enroll in a Medicare Advantage or Part D plan.
You’re not required to have Part D coverage. But keep in mind that if you enroll in Part D after the first time you’re eligible (your IEP), you may have a late-enrollment penalty. This penalty is added to your Part D premium and usually lasts for as long as you have Medicare drug coverage.
However, you won’t be charged a late-enrollment penalty if:
- You have other creditable prescription drug coverage (such as from an employer or union) before you enroll in Part D, OR
- You get support from the
Medicare Extra Help program (PDF)
Part D coverage varies for different types of prescription drugs, which are grouped into tiers. In general, drugs in lower tiers have lower costs, and drugs in higher tiers have higher costs.
- 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
Part D has four stages of coverage, and you pay a different amount for your prescriptions in each stage. The coverage cycle begins on January 1 of each year.
The cost of the prescription drugs you use will determine the number of stages you’ll reach throughout the year. It’s important to understand how the coverage stages work so you’re prepared for any changing costs.
In this stage, you pay 100% of your prescription drug costs until you meet your plan’s annual prescription deductible. Some plans call this the pharmacy deductible or prescription drug deductible.
The good news? HealthPartners UnityPoint Health plans don’t have a prescription deductible. That means your plan shares the cost of all your covered drugs right away.
After you meet your prescription deductible, the initial coverage stage begins. If you don’t have a prescription deductible – like with a HealthPartners UnityPoint Health plan – you start in this stage right away.
In the initial coverage stage:
- The plan covers some costs for covered prescription drugs in all tiers
- You usually pay a copay or coinsurance amount for each covered prescription you fill
The initial coverage stage ends when the total amount spent by you and your plan on your covered drugs (including any deductible but not including monthly premiums) equals the initial coverage limit set by Medicare. In 2022, that limit is $4,430.
If your total drug costs go over the initial coverage limit, you’ll enter the coverage gap, sometimes called
Many people never enter the coverage gap, but if you do, you’ll pay:
- 25% of the plan’s cost for all covered generic drugs
- Up to 25% of the plan’s cost for all covered brand drugs
Some plans offer additional coverage during the coverage gap, so check your plan’s benefit documents to see the exact coverage.
If you take any covered brand-name drugs, the manufacturer discounts the price during the gap. The amount of this discount (70%) also counts toward your out-of-pocket costs, helping you leave the coverage gap sooner. You leave the coverage gap when your total out-of-pocket costs for covered drugs (including any deductible but not including premiums) reach $7,050.
If you get support through the
When you exit the coverage gap, you’ll be in the catastrophic coverage stage, which will last through the rest of the calendar year. During this stage, you pay a small copay or coinsurance amount that’s set by Medicare.
On January 1, the coverage stages start over with the annual deductible or, if you don’t have a prescription deductible, at the initial coverage stage.
Our Medicare Advantage plans include Part D coverage with no deductible, providing the added convenience of having all your coverage in one plan. Members can expect benefits like:
- Fewer phone calls: You’ll have one number for all your questions. With two separate plans, you’d have to call one number with your medical questions and another number about your medications.
- One member ID card:Along with one member ID number, one card helps keep things simple.
- Knowing your medications: A combined plan can help you manage your medications and make sure you get the most benefit from them through the
medication therapy management (MTM)program.
We have a lot more information about Medicare Part D available, including:
Last updated August 2022