Medicare Part D:  Prescription Drug Plans

Part D Prescription Drug plans are CMS approved plans offered through private health insurance companies. These plans are found as either a Stand-Alone Prescription Drug Plan or a Medicare Advantage Prescription Drug Plan (MAPD).

Part D Prescription Drug plans cover a pharmacy’s brand name and generic medications. Coverage varies by plan, and each plan has a formulary, a list of the drugs covered by that plan.

(CMS = Centers for Medicare & Medicaid Services)

The Costs Associated With Part D.

• The Part D Monthly Plan Premium
• Out-of-Pocket Costs Like Deductibles & Copays Outlined In The Plan, Along With The CMS Part D Coverage Stages
• Any Late Penalty’s Incurred From Not Obtaining Part D Coverage When First Eligible

Understanding CMS Medicare Part D Coverage Stages

• Annual Deductible: At this stage, drugs are paid by the beneficiary until the deductible is met. Not all Part D Plans have a deductible. The coverage starts with the first filled prescription if the plan does not have a deductible.
• Initial Coverage: At this stage, the beneficiary pays a copay, and the plan pays the rest. This stage continues until the *Total Drug Costs reach the amount set by CMS for that calendar year.
• Coverage Gap (Donut Hole): In this stage, after the *Total Drug Costs reach the amount set by CMS for that calendar year, the copay becomes 25% of the costs for brand-name and generic drugs. This stage continues until the *Total Out-of-Pocket Costs reach the amount set by CMS for that calendar year.
• Catastrophic Coverage: In this stage, after the *Total Out-of-Pocket Costs reach the amount set by CMS, only a small copay or coinsurance is owed. This stage continues for the rest of the calendar year.

*Total Drug Costs: Equals the amount a beneficiary pays and what the plan pays for prescription drugs each calendar year. It does not include the plan premiums.

*Total Out-of-Pocket Costs: Equals the amount the beneficiary pays, including the deductible for prescription drugs each calendar year. The total out-of-pocket costs also include the discount paid by the drug manufacturers during this stage. It does not include the plan premiums.

*The Part D deductible and coverage gap do not apply when a person qualifies for Extra Help.