Prescription Coverage with Medicare Part D

Prior to the introduction of Medicare Part D Coverage, over 15% of seniors were unable to afford the prescription drugs that they needed for health maintenance. Medicare Part D Coverage which provides prescription drug benefits for senior citizens enrolled in Medicare has increased the overall number of seniors who can afford their prescription medication by subsidizing the cost of generic and formulary drugs. With a wide variety of plans offered by private insurers, numerous options are available to meet the premium, co-pay and coverage needs of American seniors.

Like Medicare Advantage and Medigap plans, Medicare Part D is a voluntary extension of Medicare coverage provided by private insurance companies, but subsidized and regulated by the Centers for Medicare and Medicaid Services. Medicare Part D Coverage provides prescription drug coverage to all Americans eligible for Medicare — dependent on reaching the age of 65 — at a much lower rate than standalone plans offered without Medicare subsidy. While the level of coverage varies, plans are usually superior to the coverage provided by some Medigap and Medicare Advantage programs. Enhancements to Medicare Part D coverage are also available for an even lower price for low-income individuals, particularly those who dual-qualify for Medicare and Medicaid.

With multiple options available to senior citizens in each state, and little standardization between plans, it can be challenging for participants to discern between plan types, prices, levels of coverage and appropriateness for varying types of medication. While some Part D plans provide higher levels of coverage for formulary medications, others are appropriate only for occasional prescriptions or those that can be obtained in generic forms.

To support seniors in choosing the right plan, Medicare offers an online plan finder tool. This tool enables seniors to identify the plan that offers the appropriate level of Medicare Part D coverage for their individual circumstances. This tool can be paired with the Formulary Finder tool, which searches out plans based on the expensive formulary medications that particular individuals need to purchase on a regular basis. Choosing the wrong plan can cost a tremendous amount of money in co-pays and premiums that might otherwise be saved by selecting the correct plan for Medicare Part D coverage.

Seniors who need large amounts of regular health or life-maintenance prescription medications can benefit from Medicare Part D since it is paired with a catastrophic coverage that limits the out of pocket charges that the patient is responsible for beyond a certain limit. While some individuals fall into the Medicare Part D “donut hole”

(The spending level prior to catastrophic coverage that is not covered by Medicare funds in any way), once the patient escapes from this coverage gap, nearly all of the costs for generic and formulary medications are covered under the plan. Unfortunately, the spending level resets with each new fiscal program year, returning seniors with daily medication needs to the donut hole each year. However for an additional premium, seniors have the option of purchasing additional coverage to bridge the gap and to preserve their budget without sacrificing their health care needs.