If you need prescription drug coverage and are approaching retirement age, a prescription drug coverage policy paired with Original Medicare benefits would be perfect for you. Although Original Medicare itself does not include prescription drug coverage benefits, you can purchase said benefits through their Part D prescription drug coverage program.
This is everything you need to know about Medicare’s prescription drug coverage option.
Part D of Medicare is the component of the Medicare system that helps members pay for their prescription medications. The drugs that are covered under any given policy will vary, but typically you will have access to at least two drugs for each major category of illness. This coverage is not automatically initiated when you enroll in Medicare, therefore you will need to apply separately.
Your Part D coverage will provide you with affordable access to the drugs you need to treat diagnosed illnesses. Part D plans are offered by private insurance companies, therefore you may discover that there are a number of different benefits structured available to you. In most cases, you can find plans that have one generic drug and one brand name drug for each major category. Specialty drugs are also available under some plans, but not all of them. Speak with an insurance agent to determine which Part D policy is best for you.
Hi, I'm Jessica Mannion at My Healthcare Direct, and today I'm going to be going over how prescription drug plans work, whether you are on original Medicare and purchase a separate standalone prescription drug plan or you're on a Medicare Advantage plan. The prescription drug plan works very similar.
In many cases, prescription drug plans have an annual deductible, just like with major medical insurance, where you have to meet that deductible.
First, before your insurance starts to pay for covered services, in this case, prescriptions. It is
important to note that most prescription drug plans require you to meet a deductible, if your prescription is classified as a tier 3, 4, or 5.
To make this easy. let's start by actually imagining a doughnut. Say you're taking a prescription
that is classified as a tier 4 drug. Before your plan will start to cover the cost of that prescription,
you will first need to meet that annual deductible.
In 2021, the average cost of a standalone prescription drug plan deductible could go as high as 445 USD. Think of it as the cost to get the doughnut.
Initial Coverage Level / Initial Coverage Phase
Once you have purchased the doughnut, you get to start to eat one side of it. This is where you start to pay for your prescription at a set copay or percentage in what is called the “initial coverage level” or “initial coverage phase.”
For example, let's say I was taking a tier 4 prescription drug. Once I've met my annual deductible, then I could either pay a copay of, say, 47 USD a month or a percentage such as 40% of the original retail cost of the drug.
Initial Coverage Limit / Doughnut Hole
Once you have eaten through one side of the doughnut, you have reached what is called the “initial coverage limit,” and you have entered into the infamous “doughnut hole.” This means that once both you and the insurance company have paid up to 4,130 USD. including your annual deductible in 2021, you will then be responsible for paying 25% of the prescription drug cost.
Once you have reached 6,550 USD, that is when you have reached your “TROOP” or “true out-of-pocket cost.” This is when you reach the other side of the doughnut, also known as your “catastrophic coverage.” It is at this point that your prescription drug costs dropped to approximately 5% of the retail cost or approximately 3.70 USD for generic drugs and 9.20 USD for brand-name drugs for the rest of the calendar year.
All count towards your true-out-of-pocket cost.
If you have any more questions on how prescription drug plans work, feel free to give us a call
at 888-959-1028. You could also check out our website at www.myhealthcaredirect.com.
and you can also like us on Facebook.
Enrolling in Part D benefits is easy, as all you need to do is submit an application once you become eligible. Upon acceptance, you will be able to choose from a variety of different plans. The Initial Enrollment Period, which begins three months before you turn 65 and ends three months after, is the best time to enroll. During this period, insurers cannot enforce underwriting requirements and you are more likely to find better rates.
Furthermore, enrolling during the Initial Enrollment Period can also help you avoid lapses in coverage, as the only other time you can enroll is during the soonest Open Enrollment Period. These occur annually and in some states, multiple times a year. If you are unable to rely on either of these options, you can also check to see if you qualify for a Special Enrollment Period. These are only granted under certain circumstances, so check with an insurance agent to see if you can use one to enroll sooner than usual.
Medicare Part D works by providing coverage for specific prescriptions at varying price points. Deductibles, premiums, copayments, and coinsurance fees, as well as coverage and benefits, will vary between specific insurance companies. Part D can be added or removed to your Original or Medicare Advantage plan.
Like almost all health insurance plans, you have to make premium payments for continued Part D coverage. You will also have to make small coinsurance/copayments when you receive a prescription. While this is simple, it is very important that you have this knowledgeable foundation.
Because you are expected to pay certain out-of-pocket costs when you receive a prescription, it’s important that you have an idea of what these costs may look like:
Let’s start by explaining the different categories, or tiers. This drug-rating system allows for prescriptions to be sorted by price so that your insurance company knows both what you’re paying and how much they’re expected to cover as well.
As you may have noticed, the cost of the first two tiers are incredibly small—most types of drugs have options that fall within these tiers. For instance, a non-preferred drug in tier 4 may have a lower-cost alternative in tier 3, or even 1 or 2. But, if not, a good portion of the costs will still be covered by your plan.
As you can also see from the tier list, there is some variation in the out-of-pocket costs for these prescriptions. While much of this can be attributed to the costs of the drugs themselves, the provider themselves can also have an impact on those costs as well as your premium and benefits.
However, because these factors are still regulated by the government, you don’t have to worry as much about being “ripped off”—with the right help, however, you can find great deals on coverage.
In 2025, Medicare Part D became more affordable. Most importantly, there’s now a $2,000 yearly limit on what you pay out of pocket for your prescriptions, and the old “donut hole” gap is gone. Plans also started offering a new option that lets you spread your prescription costs out over monthly payments instead of paying large amounts at once.
In 2026, the program adjusts slightly. The out-of-pocket cap will rise a bit to $2,100, and the yearly deductible will increase modestly. You may also start to see lower prices for some high-cost drugs as Medicare’s new price-negotiation program kicks in.
Most people enroll in Part D during their Initial Enrollment Period (IEP) which takes place during the months surrounding your 65th birthday. It is important to know, then, that Part D works within a limited eligibility—only those eligible for and enrolled in Original Medicare (Parts A and B) can then enroll in Part D.
People often purchase Part D if they see a significant, medical need for frequent prescriptions, are covered by only Original Medicare, do not have Part D included in their Advantage plan, or don’t have a Medicare Supplement plan.
The first question in deciding whether or not you need Part D is to determine how often you need prescriptions. More often than not, even if they do not need frequent drugs, individuals find that the security of lower-priced access to the prescriptions they need is worth considering Part D. In fact, according to the Healthcare Leadership Council, 85% of U.S. Seniors are satisfied with their Part D prescription drug coverage.
With Original Medicare (Parts A and B), you will receive very little (if any) prescription drug coverage. Under Part A, “emergency” drugs needed for immediate, in-hospital care will be covered to a certain extent.
Similarly, with Part B, you can receive very limited benefits limited to in-patient care. Any drugs prescribed for outpatient use are not included. Potential drugs covered under Original Medicare include:
Original Medicare alone, however, does not cover a majority of typical drugs, and do not even fully cover all drugs within the above list. If you are worried that this coverage alone is not enough, you can purchase a Part D plan in addition to Original Medicare.
Say, however, that you choose an Advantage plan over Original Medicare. More often than not, Medicare Advantage includes Part D coverage. So, if that’s the case, you’re already taken care of, all you have to do is decide whether or not you actually want the coverage.
But, if your Advantage plan does not include Part D, you will need to purchase a separate, stand-alone plan.
You cannot have a Medicare supplement and Part D plan at the same time—you can only have one or the other. So, if you do not have the additional coverage of a supplement, you have the option to purchase Part D separately.
When looking for a Part D plan, whether to add onto Original Medicare or Medicare Advantage, you will have to search and compare what’s available in your area. Price points can vary from provider-to-provider, so it is up to you to find one that fits your needs and budget. However, having an agent from My Healthcare Direct can make a big difference, and make this process significantly easier.
Do you think that Part D may be right for you? Still unsure? We’ll answer your questions directly, and ensure that you are confident in your decisions. Ready to get started? Call My Healthcare Direct at (888) 959-1028 today.
You can enroll in Medicare Part D a few different ways. The easiest time to do so is during your Initial Enrollment Period (IEP), but you may also be eligible for a Special Enrollment Period (SEP), or enroll in a different Part D plan during the Annual Enrollment Period (AEP).
When you are eligible for Medicare at age 65, you can enroll during what is called your Initial Enrollment Period (IEP). This begins three months prior to your 65th birthday, the month of, and the 3 months following, for a total of seven months.
During these seven months, you have the opportunity to enroll in Original Medicare (Parts A and B), Medicare Advantage (Part C), Medicare supplements (Medigap), and/or Part D.
Before you can enroll in any other additional plans, you must first sign up for both Parts A and B—they are both required for eligibility to the other options. During the IEP, you will not be penalized for late enrollment, so long as you do so before the end of those seven months.
If you wait till after your IEP to enroll in Part D, you could be penalized. For every month you are eligible for Part D after your IEP, 1% of your monthly premium will permanently be added to your rate.
Medicare bases this increase on the national base beneficiary premium, which is $33.37 in 2022. So, say you waited to enroll in Part D till 12 months (one year) after your IEP has ended. For each month, you must calculate an additional percentage, for a total of a 12% increase.
To calculate this, you must multiply the decimal percentage (.12) by the established $33.37 base premium. The total dollar increase, then, would be roughly $4.00. When rounded to the nearest 10 cent, this would equal a $4 total addition to your premium a month.
Besides enrolling within your IEP, one of the most common (and easiest) ways to avoid this late penalty is to enroll in Part D with a Special Enrollment Period (SEP).
You must, however, meet certain requirements to be eligible for a SEP. If you are eligible for the Medicare Extra Help program, you automatically qualify to enroll using a SEP at any time. If you are unsure whether or not you qualify for Extra Help, you can review your tax return and contact the Social Security office.
You can also qualify for a Part D SEP if you have recently retired, or have received at least 24 months of Social Security Disability Benefits.
When it comes to Medicare enrollment, it can be easy to get lost or confused. With so many steps and hoops to jump through, you need someone who can carefully walk you through the process from start to finish. My Healthcare Direct can answer all of your questions, and get you on the right track towards a safe and insured future—give us a call today at (888) 959-1028.
The cost of Part D varies based on the provider, your area, and mostly by the prescriptions covered. You can also get help paying for Part D if you qualify.
Medicare Part D is offered through private insurance companies, but it is regulated by the federal government. This means that you do not have to worry about missing essential coverage—all Part D plans under the Affordable Care Act (ACA) meet the same basic standards.
However, because it is privately offered, prices can vary between companies. It is up to you to compare available options, or you can work with a talented insurance agent who will do the work for you.
The various price options, however, create healthy competition amongst providers. So, while this may appear more difficult on its surface, it will likely benefit you more in the long run.
When you sign up for a Part D plan, it will cover a majority of the cost of your prescription. Some of it, however, based on the type and cost of the prescription itself. You will pay either a specific dollar amount known as a coinsurance fee, or a percentage of the total cost known as a copayment. The cost of these tiers will fall within these price ranges no matter the provider:
You and/or your spouse’s income is another potential cost-determining factor. Specific plan premiums will still vary based on the provider, but, if you have a high enough income based on your tax return, you may have a small additional fee included with your premium. This, of course, will not apply to everyone, but it is important to consider if you believe you may fall under any of these income brackets:
Alternatively, you may have a lower income, and may be worried about how you can afford your Part D payments. If you receive Supplemental Security Income (SSI), you will more than likely qualify for the Medicare Extra Help program. Through this program most (if not all) of your Part D expenses will be covered.
My Healthcare Direct works tirelessly to find it’s customers the coverage they need. When you’re searching for affordable Part D coverage, then, you know who to call—our number is (888) 959-1028—just remember, we’re here for you.
To find the right Part D coverage, you should consider what prescriptions you need, how much you’re willing to pay, what’s available in your area, and find a good agent.
Like all health insurance, you want a plan that provides the benefits and coverage you need. With Part D specifically, you need to make sure the prescriptions you use on a regular basis, as well as potential prescriptions you may want in the future.
Different plans will include different coverage, something that likely does not come across as much of a surprise. Sometimes, plans can be customized to meet your specific needs, especially if you’re looking for specialty drugs.
Keep in mind that, if you have a chronic special needs plan (C-SNP) or a dual-eligible special needs plan (D-SNP) you should receive Part D coverage that meets your exact prescription needs.
If you do not qualify for a C-SNP or D-SNP, you’ll also want to make sure you can afford the coverage you’re purchasing. Pay close attention to the prescriptions you’ll need—once again, you want to make sure they’re included.
But, not only that, you will also want to make sure you’re not paying for more coverage than you actually need. Drugs are categorized by type in relation to price. These 5 categories, or tiers, start at the least expensive at $1-$3 coinsurance, to the most expensive at a 25% to 33% copayment. Try to find a plan that falls on the lower end of those coinsurance and copayment spectrums.
You are also limited to providers that are available in your area. Some states enforce certain restrictions or give certain parameters for insurance companies to follow, so be sure to know what your state allows.
This goes hand-in-hand with the drugs you need—if what you need is more expensive in your area, you will want to be certain that it will be included in any potential plans.
Agents are one of the best and easiest ways to shop for Medicare Part D coverage. When looking for a plan, it is up to you to compare available options and negotiate coverage with available companies. Not only do you have to choose between providers, but you also have to navigate the enrollment process itself, which can be tricky for many, especially those who are new to Medicare.
An agent—a good agent—will walk you through this entire process, and take care of almost all of this legwork for you. All you have to do is tell them the coverage you want and you budget, and they will find a plan that fits your budget and is available in your area.
In your search for Part D Medicare coverage, you need My Healthcare Direct. From plans that meet your prescription needs, affordable options in your area, and especially for talented and dedicated agents, we have all that you need. Call us today at (888) 959-1028.
