Are you looking to gift yourself with the best healthcare plan that can ensure healthy, secure, and stress-free golden years of your life? You are at the right place. As you approach the age of 65, health problems become common and as the cost of medical expenses is skyrocketing, investing in the right healthcare plans that can provide maximum coverage at low costs is crucial. If you are a US citizen, Medicare plans are the best option for you as these plans provide coverage for Hospital expenses, medical expenses, prescription drug coverage, as well as some additional benefits. Among them, prescription drug coverage may come at the top of your healthcare needs. So, in this blog, we will shed light on Prescription drug coverage or Medicare Part D, which can help you make informed decisions about taking your medicines.
What are Medicare Plans?
Medicare plans are basically the healthcare plans that are available to US citizens approaching the age of 65. Medicare offers two types of plans: Original Medicare and Medicare Advantage. In original Medicare, Medicare you will get coverage just for Part A and Part B, i.e., Hospital and Medical Coverage. You will have to purchase supplemental Medigap plans for additional benefits, including prescription drug coverage. In contrast, Medicare Advantage plan is an “all in one” solution for your healthcare needs as it provides coverage not only for Part A and B but also for prescription drugs and additional benefits like hearing, dental, vision, gym memberships, mental health, etc., under one roof. If you want to get complete information on Medicare Advantage plans, visit https://www.Medicareadvantageplans2025.org/.
What is Prescription Drug Coverage or Part D?
Part D, or prescription drug coverage, covers the cost of outpatient prescription drugs for people 65 or older with a Medicare Plan. In 2023, more than 50 million of the 65 million Medicare beneficiaries are enrolled in Part D programs. These plans are not provided by the federal government but by private institutions. The federal government contacts private institutions that are contracted with Medicare and deals in prescription drug coverage. This plan simply reduces the cost of prescription drugs that are advised by the doctors or healthcare experts provided under your Medicare plan and helps you get the best medicines. Eligible people can take Part D coverage in two ways:
As a stand-alone plan, if they are enrolled in the original Medicare
As a combined benefit in the Medicare Advantage plan or Part C.
Which Drugs are covered under Part D of Medicare?
Prescription drug coverage, or Part D, includes a wide spectrum of prescription drugs that Medicare beneficiaries require. Basically, each Part D plan includes a formulary, which is a list of covered prescription drugs. Medicare drug coverage Formularies classify drugs into tiers, with each tier having a distinct cost. Drugs placed in the high tier (brand name drugs) have a higher cost than those placed in the lower tier (generic drugs). This Part includes both brand-name drugs and generic drug coverage. However, generic drug makers have to prove that their generic drugs work the same as the brand-name prescription drug to the FDA or Food and Drug Administration.
Some of the drugs covered in Part D are:
- Drugs require to treat cancer or HIV aids
- Anticonvulsive treatments for seizure disorders
- Self-injected medicines like insulin
- Antidepressants
- Drugs for chronic conditions like asthma, heart disease, etc.
- Immunosuppressant drugs
- Antipsychotic medications
- Antibiotics
- Anticancer drugs (unless covered by Part B)
- Vaccines (except for ones covered by part B)
What is not covered under Part D?
Medicare Part D covers a vast variety of prescription drugs, but there are some drugs or medicines that it does not cover. Some of the drugs it does not cover include:
- Drugs for Cough and Cold
- Antacids
- Drugs used to gain or lose weight
- Prescription vitamins
- Drugs for hair growth
- Over-the-counter drugs
- Barbiturates and Benzodiazepines
- Drugs for cosmetic purposes
- Certain pain relievers
- Drugs Covered by Part A or Part
- Non-FDA Approved Drugs
How does Medicare Part D work?
A typical Part D plan includes four phases/periods and works as follows:
Deductible Period
The deductible period is the first phase in which, until you reach your Part D deductible or a fixed cost, you will have to pay the full negotiated price for your approved prescription medications. Basically, some Medicare Part D plans require the beneficiary to spend a certain amount of money or deductible before the actual plan starts. When the deductible is paid off, the plan will start covering all the costs of your prescription drugs. Deductibles depend on the plans; they can be as low as $0 and even be higher than $540.
Initial Coverage Period
You will get initial coverage for your covered prescription drugs once you pay the cost equal to your deductible amount. In the initial coverage period, you will pay only copay or coinsurance, and your plan will pay some of the cost until you reach the Initial Coverage Limit. The copay and coinsurance depend on plans and drug tier. Although the duration of the initial coverage phase varies with drug cost, for most plans in 2024, initial drug coverage ends once the beneficiary has accumulated $5,030 in total drug costs.
Coverage Gap
When the initial coverage term ends, there is a coverage gap phase also called the Medicare Donut Hole that starts. In this phase, you have to pay a discounted amount (25% of the cost of drugs) for prescription drugs, and the remaining 75% is paid by your Medicare plan. However, the donut hole was closed in 2020 for all the drugs. You will not fall into the coverage gap if you are eligible for the Medicare Extra Help program (low-income subsidy) and have a low income. When your combined drug costs (out-of-pocket costs and manufacturer’s discount payments for brand name drugs) reach an upper-level limit of the coverage gap, you will enter the next phase.
Catastrophic Coverage
Once you enter this phase, you no longer have to pay any amount for your prescription drugs. Your Medicare plan will pay your share of the cost of your prescription drugs for the rest of the year. Earlier, people had to pay a small coinsurance or copayment, but in 2024, this cost was eliminated.
How much does Medicare Part D cost?
Your costs when enrolled in a Part D plan include:
- Monthly premium, if applicable.
- An annual deductible
- Any out-of-pocket costs, such as copays and coinsurance for specific drugs
- Coverage gap phase (75% of prescription drug cost)
- A late enrollment penalty
- Catastrophic coverage once you enter this phase
Conclusion
In conclusion, we can say that, with the increasing medical costs, Medicare Advantage plans are the best investment in your healthy and stress-free future. Your Medicare Advantage plan covers the complete cost of your prescription drugs that are included in Part D coverage. With this, you get relief from the high expenditure of prescription drugs in the later years of life and save yourself from the financial drain.