Medicare Part D – Prescription Drug Plans

From 1965 until 2006 Medicare did not offer coverage for prescription medications. Prescription discount cards were offered by various groups, and some Medicare Supplements offered some prescription benefits, but no benefit was offered directly from Medicare. The passing of the Medicare Modernization Act in 2003 changed all of that. This law created a new part to Medicare in addition to Parts A and B – Part D. While Parts A and B offer hospital and medical coverage, Part D offers Prescription Drug coverage. Part D went into effect in January of 2006. However, unlike Parts A and B which are administered directly from the government, Part D is currently administered entirely through private insurance companies. These companies are authorized and subsidized by the government to offer this drug coverage. Thus, Part D is purchased directly from an insurance company and is not automatically a part of your Medicare benefit. There are a few things you should know about Prescription Drug Plans (PDPs).

  1. Enrollment is not mandatory. This is an optional benefit. There are, however, two things to keep in mind should you choose not to enroll.
    • First, generally speaking, you can only enroll during a 53 day window at the end of the year between October 15th and December 7th. If you miss this window you will not be able to enroll until the next year. (There are exceptions for this general rule – please contact us if you would like to see if you can enroll or change plans.)
    • Secondly, if you choose not to enroll, but then later change your mind and enroll into a plan, Medicare will assess a 1% penalty for each month that you could have been enrolled but chose not to.
  2. Plans differ. In 2019 there are 9 different companies offering a total of 26 plans in the Idaho region. Each plan may differ in the following areas:
    • Monthly premium – the monthly premium for the plan coverage.
    • Annual deductible – the amount you must spend out of pocket before the plan begins to pay.
    • Copays and coinsurance – the amount you pay for your prescriptions.
    • Drug formulary – the list of prescriptions the plan covers.
    • Pharmacy network – the pharmacies the plan works with.
    • (We can help compare these differences for you and help you decide which plan will be best for your needs.)
  3. Plans change. Every PDP is a one year contract between an insurance company and Medicare. These companies can choose on a year-by-year basis whether or not they want to change or discontinue a plan.

So, all in all pretty simple, right? We know that this is a very overwhelming subject, not only in design, but also because of all the options involved. We would love to help you navigate this complicated subject – just contact us and we’ll get to work making sense of all this.

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