Medicare Prescription Drug Coverage

2014 Medicare and Medigap Updates

Medicare Prescription Drug Coverage

Medicare prescription drug coverage, also known as Medicare Part D, is insurance coverage aimed to help Medicare enrollees meet some of the costs of their prescription drug or to protect them from unexpected prescription drug costs. People enrolled under Medicare are eligible for this drug coverage if they qualify for Medicare Part A (Hospital Insurance) or Medicare Part B (Medical Insurance).

The Medicare prescription drug coverage is offered by private insurance companies. These companies have to be approved by Medicare to offer these plans. Because these plans are offered by different private insurance companies, the cost (insurance premiums, co-payments and deductibles) or coverage offered under the plan will differ. However, the insurance companies are bound to offer a minimum level of coverage which is predetermined by Medicare.

The difference between the plans will also be seen in the kind of prescription drugs covered, the pharmacies that drugs can be bought from or how much a beneficiary has to pay. However, all plans must cover almost all if not all the prescription drugs in 6 drug categories. These 6 categories are antiretrovirals, anti-cancer medication, antidepressants, immunosuppresants, anticonvulsants and antipsychotics.

Some Medicare prescription drug coverage plans may offer coverage for generic drugs while others may offer coverage for brand name drugs. Generally speaking, the premium payable will be a good determinant of the kind of benefits on offer. Even though cost is an important consideration, a person should choose a plan that best suits their needs. You should therefore compare the different plans and see if they offer drugs that you use. Convenience is also something you may need to consider when making a choice.

There are other limitations as to which Medicare prescription drug coverage plan you can join. For instance, you can only join a plan offered in your service area. You can get help with making the choice with regards to the right plan from the State Health Insurance Assistance program or from the Medicare website.

It is important to realize that all Medicare prescription drug coverage plans have what is informally referred to as the ‘donut hole’. This is simply the coverage gap which is reached when the plan has spent a specified amount of money on your prescription drugs. When this coverage gap is reached, the beneficiary is expected to meet all the costs of the drugs up to a certain limit when you come out of the donut hole and go into what is called catastrophic coverage.

There are 2 ways of getting Medicare prescription drug coverage; through Medicare Prescription Drug Plans (PDPs) or through Medicare Advantage Plans (Part C). The majority of beneficiaries are however enrolled under PDPs. It is crucial to join one of the drug plans as soon as you become eligible for Medicare. If you do not enroll during the 6 month enrollment period, you will have to pay a late enrollment penalty which will increase the premium you will have to pay.