How does Medicare Part D work? 

Paying for prescription drugs can be costly, especially if you take multiple medications on a regular basis. Even if you only get prescribed medications every now and then, the out-of-pocket cost of some drugs with no insurance can be hundreds or even thousands of dollars per month. 

Many seniors find this out the hard way as they encounter chronic health problems with age.
Thankfully, Medicare offers a cost-saving option in the form of Medicare Part D. Part D is the prescription drug benefit of Medicare. It was not initially included in Medicare benefits, but it was added in 2003 under the Medicare Modernization Act. In 2006, Part D officially went into effect, and since then, it has helped millions of seniors gain access to life-saving medications that may have otherwise been out of financial reach.

When to enroll in Medicare Part D 
Part D is optional coverage that Medicare recipients can choose to add to their coverage. You can enroll in Part D during the Initial Enrollment Period, which begins the three months before your 65th birthday, the month of your 65th birthday and the three months following your 65th birthday. Some people qualify for Medicare before they turn 65 due to certain disabilities, and would be eligible for Part D coverage at that time. 

If you do not enroll in Part D coverage when you are first eligible and do not have other creditable coverage, such as through an employer or union, you may have to pay  alate enrollment penalty when you sign up later. 

If you choose to add Part D to your Medicare benefits, you will need to consider your current medical needs as they pertain to prescription medications. If you already take specific medications, make sure that the plan you enroll in includes the prescriptions on their drug formulary, or list of covered drugs. You will also want to work closely with your doctor to discuss the potential for needing medications in the future. This conversation can help you choose the right Part D coverage for your needs, both now and in the future.

Your Medicare Part D formulary
Each Part D plan includes a formulary. This is a list of medications that your plan covers, and it may provide additional information about each drug related to coverage limitations and restrictions. For example, your plan may only cover a certain quantity of a particular drug per benefit period.

If a medication is prescribed to you and is not listed in your plan’s formulary, you may be able to file an exception waiver. To do this, you will need to enlist the help of the prescribing doctor. In general, you and your doctor will need to demonstrate that the prescribed medication is the best choice and that no suitable alternative exists. At the heart of any exception waiver is the ability to show that a particular medication is medically necessary to preserve life and/or improve health.

The costs of Medicare Part D
The costs associated with Medicare Part D can vary. Your coverage provider will charge you a monthly premium, and Medicare may require an additional amount on top of this. Premiums may be as low as $7 per month, but some premiums could be $99 per month or higher depending on your coverage and your provider.

You may pay a higher premium based on your income according to your income tax filing information. For example, if you are filing a single return or married filing separately, you are allowed to make up to $91,000 per year before Medicare charges extra. If you make above this amount, you will pay your plan premium as well as an additional $12.40 each month. This premium amount goes up as your reported income rises. The top bracket of $409,000 per year in income will be required to pay $77.90 in addition to the plan premium each month.

Medicare Part D and prescriptions while hospitalized
If you are admitted to a hospital or skilled nursing facility, you may be prescribed medications to take during your stay. These medications are covered by Medicare in most cases, but they may not be covered by Part D. Instead, they may be covered as part of your inpatient care, so Part A would supply Medicare coverage. If you are prescribed medications while in the hospital for use at home upon being released, the prescriptions you purchase from a retail pharmacy for self-administration may be covered under Medicare Part D.

Medicare Advantage and Part D coverage

Medicare Advantage plans provide all of the same benefits as Original Medicare, but they may offer additional coverage. Many Medicare Advantage plans will provide access to Part D coverage for prescription medications. 

Because Medicare Advantage plans often provide additional benefits, some plans may include an allowance or discount for  over-the-counter medications. If this is the case, coverage is typically supplied in the form of discount coupons or reimbursement programs instead of outright coverage at the register.

Talk to an independent Medicare Benefits Advisor

If you’re still unsure of which plan is right for you, you may want to consider working with an independent Medicare benefits advisor or broker who can impartially shop plans from a range of providers. A licensed agent may be able to help you narrow down your Medicare options and find the plan that’s right for you.