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Medicare Part D

Medicare Part D

Medicare Part D, also called a prescription drug coverage, helps pay for the cost of your medications. It is offered by offered by private insurance companies.

Everyone who is entitled to Medicare Part A and/or enrolled in Part B is eligible for prescription drug coverage.

For many people, Medicare Advantage provides their prescription drug coverage. If you have a PFFS Medicare advantage plan without drug coverage or a MSA plan you can enroll in a stand alone PDP. If you are enrolled in ANY other type of Medicare Advantage plan, enrolling into a stand-alone PDP will automatically disenroll you from your Medicare Advantage plan.

When you are eligible for Medicare benefits, you may have other insurance such as group or retiree insurance. If your plan doesn’t provide at least as much coverage as Medicare Part D, you may pay a penalty if you decide to enroll in Medicare Part D after you are first eligible.

Coverage stages

There are 4 stages to all Medicare Part D plan whether that coverage is provided by a stand alone plan or your Medicare Advantage plan.

  • Deductible- What you pay before the plan contributes This changes yearly and many Part D plans waive the deductible.
  • Initial Coverage Limit- What you and the plan combined pay for your coverage. The standard Part D cost sharing is 25%/75% where you pay 25% and the plan pays 75%. This amount changes every year. Some plans cover these costs in Tiers based upon the cost of the medication.
  • Coverage Gap- The coverage gap begins after you and your drug plan have met the initial coverage limit. You pay a percentage of the cost of either brand name or generic drugs until you reach the TROOP
  • Catastrophic Coverage- Once you get out of the coverage gap, you automatically get “catastrophic coverage.” It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

Medicare Part D does not cover the cost of these medications:

  • All medications paid for by Medicare Part A and Medicare Part B.
  • Over-the-counter medications or other medications that do not require a prescription.
  • Drugs that Medicare specifically excludes from the program.


Each Medicare Part D plan has a network of pharmacies that you must use. If you use a pharmacy outside of their network, you will generally pay a higher price. Exceptions can be made in case of emergency situations outside of your service area. Contact your Medicare Part D provider if you have questions.

Most plans are contracted with a national network of pharmacies for coverage when you travel. Many have a mail-order pharmacy option for reduced costs on maintenance medications.


Each insurance company creates its own list of covered drugs called a formulary. If your doctor prescribes a medication that is not on your plan formulary, you can ask to get it covered using an “exception” to the plans formulary. If the plan does not grant you an exception, you must pay for it out of pocket or ask you provider to prescribe something that is on the formulary list.

Insurance plans can and do change their formulary every year. You should check to see if your plan will cover your prescriptions at the same cost when you receive your “ANNUAL NOTICE OF CHANGE” or ANOC letter. The Annual Enrollment Period (AEP) from October 15th to December 7th each year is the only time you can change your drug coverage unless you qualify for a Special Enrollment Period or SEP.


Everyone enrolled in Medicare Part A and Part B (original Medicare) is eligible for Medicare Part D. You can only enroll in one Medicare drug plan at a time and that can be either a Medicare Advantage plan with prescription drugs (MAPD) or a stand alone Part D plan (PDP) but not both at the same time.

You can change your drug plan during the Annual Enrollment Period (AEP).


Your costs for Medicare Part D include:

  • Premium. Most plans charge a fixed monthly fee for Medicare Part D. The company that provides your Medicare Part D plan sets the premium for each calendar year. You may also pay a late enrollment penalty with each month’s premium.
  • Deductible. Some Medicare Part D plans require you to pay for your prescription drugs out of your pocket until you reach your deductible each calendar year. Medicare sets a maximum deductible amount each year, However, some plans only charge a deductible on certain “Tiers” of drugs or charge a reduced deductible. remember, your plan cannot ask you to pay more than the Medicare deductible amount each year.
  • Copay. Your copay is the fixed amount that you must pay each time you purchase prescription drugs after you have paid your deductible. Your plan may organize its formulary into tiers and charge a different copay for each tier. Your plan may use a lower copay for generic drugs than brand-name drugs. Your plan may charge Coinsurance instead. That would be a percentage of the contracted amount for each prescription you receive.

Extra Help

Based on your circumstances, you may qualify for financial assistance or “Extra Help” with the cost of your prescription drugs. Beneficiaries that make up to 150% of the Federal Poverty Level (FPL) are eligible for assistance. There are both income and asset limits for those applying for “Extra Help” that change every year. Just because you haven’t qualified in the past doesn’t mean you shouldn’t at least check to see if you may be eligible now. Contact us and we can put you in touch with a local agent that can help you with this application process. Click here to apply.