What you need to know about Medicare Part D
Medicare Part D is prescription drug coverage that helps pay for the cost of medications. You can get Medicare Part D through a stand-alone drug plan or as part of a Medicare Advantage plan that includes prescription drug coverage.
What does Medicare Part D cover?
Medicare Part D plans cover certain prescription drugs. Long and short-term drugs are both included. Each Part D plan has a list of drugs it covers called a “drug formulary.” It’s a tiered list of drugs and their costs. Drug tiers classify Part D drugs from lowest cost (starting at Tier 1) to highest cost.
Our Aetna® Medicare Part D drug tiers are:
- Tier 1 – Lower cost, preferred generic drugs
- Tier 2 – Slightly higher cost, includes generics
- Tier 3 – Higher cost, includes preferred brand prescription drugs
- Tier 4 – Even higher cost brand name, includes non-preferred prescription drugs
- Tier 5 – Highest cost prescription drugs, includes specialty drugs
How to choose a Medicare Part D plan
Think about your unique needs when it’s time to choose a Medicare coverage plan. Here are some things to think about:
- Check the prescription drugs you need against the drugs covered by the plan. You’ll want to pick a plan that covers your drugs.
- Understand the differences in what’s covered by each Medicare health plan. Not all plans offer the same benefits.
- Compare Medicare Part D costs. Consider what you can afford against what you need from your Medicare insurance plan.
How much does Medicare Part D cost?
Medicare Part D costs can vary. Generally, they include:
- Monthly plan premium — This is a set amount you pay each month.
- Part D deductible — This is the amount you pay out of pocket for covered drugs each year before your plan begins to pay. Your deductible resets at the beginning of each year.
- Copayments — These are fixed amounts you pay at the pharmacy for covered drugs.
- Coinsurance — This is a percentage of a drug’s cost that you pay at the pharmacy. If your coinsurance is 10% and a drug costs $100, you would pay $10.
Medicare Part D may help lower your prescription drug costs, but coverage and costs vary by plan. Compare Medicare plans to find one that fits your medication needs.
What is Medicare Extra Help?
Medicare Extra Help is a program that helps people with lower income. This program offers help to pay for Medicare Part D costs.
Need help to pay for your prescriptions? If you qualify, you’ll get help to pay your Part D plan’s:
- Monthly Part D premium
- Yearly deductible
- Coinsurance
- Copayments
You may qualify if you:
- Have Medicaid
- Cover your Part B premium costs through a state Medicaid program
- Get Supplemental Security Income (SSI) benefits
Coverage phases
There are three phases in your Medicare drug coverage each year:
Deductible phase
The deductible phase is when you pay the full drug cost until you reach your deductible (if you have one). Your plan has not begun to pay yet. This phase lasts until you pay your plan’s full deductible amount.
Initial coverage phase
After your deductible is paid, the initial coverage phase starts. This is when your plan pays for part of the covered drugs while you pay a copay or coinsurance.
Catastrophic phase
Last is the catastrophic phase. This starts once you reach your plan’s limit for out-of-pocket costs. Once you reach this phase, you’ll have zero out-of-pocket costs on covered drugs until the end of the calendar year.
When to sign up for Medicare Part D
You can enroll in Part D during these times:
Initial Enrollment Period (IEP)
The Initial Enrollment Period includes the three months before you turn 65, the month you turn 65, and the three months after. There is also an IEP for people under 65 with certain conditions or who get Social Security disability. In this case, you would also have a seven-month window to sign up for Medicare. Your IEP would start three months before your 25th month of disability payments. It would include that 25th month and end three months after.
Annual Enrollment Period (AEP)
The Annual Enrollment Period lasts from October 15 to December 7 every year. During this time, you can switch to a Medicare Advantage plan from Original Medicare. You can also switch from a Medicare Advantage plan with no drug coverage to one that has it — or vice versa.
Special Enrollment Period (SEP)
The Special Enrollment Period is for people who end or lose their employer plan. The SEP lasts for eight months. It starts the month after you lose your employer plan.
Medicare Advantage Open Enrollment Period
The Medicare Advantage Open Enrollment Period runs from January 1 to March 31 each year. If you have a Medicare Advantage plan, you can make a one-time switch to a different Medicare Advantage plan or to Original Medicare. You can also enroll in a Medicare prescription drug plan during this time.
If you don’t sign up during any of these times, you may have to pay a penalty. Learn how to avoid late enrollment penalties when you sign up for Medicare Part D.
Still have questions? Learn more about Medicare enrollment periods.
