With the wide range of Medicare plans available, it's all too easy to feel overwhelmed with the selection. And, while the Original Medicare Part A (hospital insurance) and Part B (medical insurance) cover about 80% of medical needs, you may be looking for more—such as additional Part D coverage for prescriptions or even a Medicare Advantage Plan.
Medicare prescription drug plans can help strengthen your coverage. Here's what you need to know to choose the right drug coverage under Medicare.
What Are Medicare Prescription Drug Plans?
Medicare prescription plans help members cover the costs of their prescription medication. The cost that you pay as a member for a covered healthcare service after you've paid the plan's deductible is known as the co-payment. Members of Medicare plans get access to various types of coverage depending on what's available in each state as well as the individual plan itself.
Medicare drug plans come with a list of drugs covered by the plan known as a formulary. A plan's coverage typically includes at least two different drugs in the most common categories, giving members the opportunity to choose.
If your preferred brand-name drug isn't included, the plan may still offer a similar drug or a generic brand. However, if you decide to stick with your brand-name option, you might be responsible for a higher portion of the total cost — potentially even the whole amount.
Medicare prescription plans usually cover most common conditions. As of January 2021, your Medicare plan could even cover some insulin costs for diabetics to the tune of up to $35 for a 30 day supply.
How To Get A Medicare Drug Plan
When people mention prescription plans, they're often referring to a Medicare prescription plan option such as coverage under a Part D plan. Alternatively, they might mean a plan included as part of their Medicare Advantage Plan, which offers coverage similar to Original Medicare—parts A, B and usually drug coverage under Part D as well.
You can get a Medicare Prescription Drug Plan by applying for Medicare Part D or as part of your Medicare Advantage Plan application. The conditions for joining a Medicare Advantage Plan vary by state.
To apply for a Medicare Part D plan, you must first apply (and be approved) for Original Medicare — that is, Part A and Part B. If you wait to select Medicare Part D until after you first apply to Medicare, you could end up paying a late enrollment penalty down the road when you go to add it. In order to get any of these Medicare prescription plans, you need to be a US citizen or lawfully present in the United States.
How Medicare Drug Coverage Works
How do you know that your medication is covered by Medicare? Further, how do you know how much of the prescription payment is covered by the plan — or even just how much you will need to pay?
First, all Medicare plans must cover the drugs that people with Medicare commonly take. This includes drugs to treat conditions such as cancer and HIV/AIDs. However, your coverage may include a different brand name or a generic drug instead of the one you've been prescribed.
Second, Medicare plans typically include prescription drugs organized into tiers or levels according to their cost.
- Tier 1 has the lowest co-payment and typically covers generic drug brands.
- Tiers 2 and 3 have higher co-payments and typically cover brand-name drugs.
- Tier 4 has the highest co-payment and typically covers the most expensive drugs.
To ensure your drugs are covered through a plan, log in or create an account through Medicare.gov. Sometimes, doctors may decide a higher-tier drug will be more effective for your condition. In these cases, you may apply for an exemption to reduce your co-pay.
Then, learn about the different Medicare plans available. Or, you might look at options for Medicare Advantage Plans, which can cover prescription drugs. With an online Medicare account, you can find and compare the various Medicare and Medicare Advantage plans and the drugs they cover. That way, you'll be equipped to choose the prescription plan best suited to your situation.
How Medicare Part D Coverage Works With Other Prescription Drug Plans
If you have other prescription drug insurance coverage, it's important to understand how your Part D plan will work with your existing coverage to help pay for your medication costs.
Other plans that could offer you coverage in combination with your Medicare Part D plan include:
- Employer or union health coverage
- Medicare Supplement Insurance (Medigap) plan that includes prescription drug coverage
- Supplemental Security Income Benefits
- State Pharmaceutical Assistance Program
- Long-term care facility
- HUD Housing Assistance
- Food Stamps
- Health insurance marketplace
According to the Medicare site, if you participate in the Federal Employee Health Benefits Program, the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), Indian Health Services or receive Veterans Benefits or TRICARE (military health benefits), it will most likely be to your advantage to keep your current coverage.
How To Find and Compare Appropriate Plans
As of October 2021, at least 10 different Medicare Plans, plus more Medicare Advantage plans, are currently available to Americans. Although it can be a challenge to figure out which option will best meet your budget and medical needs, one of the easiest ways to learn about each of the Medicare Plans. Then, compare Medicare plans using this handy Medicare Plan Finder.