Medicare Part D Prescription Coverage

In 2006 the federal Medicare Part D prescription coverage program began.

Part D prescription plans are sold by private insurance companies. Depending upon where you live there are typically 20-40 different plans to choose from. Like HSA accounts, each year the federal government determines the maximum deductible allowed. In 2022 it is $480. Depending on plan chosen, many generic medications are not subject to the annual deductible. Many plans have no co-pay or co-insurance requirement when it comes to common generics such as blood pressure and cholesterol medications.
How It Works:
After meeting the annual deductible the policyholder is in the Initial Coverage Phase, paying about 25% of the cost of prescribed medications. When the total spend of the policyholder and the insurance company reaches $4430 on medications in 2022, the policyholder enters the Coverage Gap Phase.

Once you have spent $7,050 on medications in 2022 you have reached the Catastrophic Coverage Phase. Coinsurance will be 5% for the rest of the year.

Open enrollment for Part D plans is October 15th through December 7th. It is highly recommended that you shop your Part D coverage EVERY year. It is very common to enroll in a Part D plan at a reasonable price one year, only to have the renewal premium double or triple. It is very easy to shop all available plans in your area. Simply go to www.medicare.gov and click on the Part D link. Or give me a call and I will walk you through it. In most cases you don’t have to shop your Medicare supplement plan each year, but shopping Part D coverage each year is a must.

Please remember that if you choose not to enroll in Part D coverage when first available to you, the federal government will apply a penalty of 1% for each month you went without coverage. The penalty is 1% of the national average premium of around $39 per month. 1% doesn’t sound like much, but one short year without coverage means a 12% penalty.