Prescription Drug Plans

Medicare Part D – Prescription Drug Coverage

You can sign up for Medicare Part D, which helps cover prescription drug costs, starting three months before your 65th birthday. There are other enrollment periods that may apply to you as well. It’s important to enroll on time because there’s a penalty for late enrollment if you do not have equivalent drug coverage from another source, such as an employer plan or VA benefits.

If you are already enrolled in a Part D “standalone” plan or a Medicare Advantage plan that incorporates drug coverage, you can switch plans during AEP, which runs from Oct. 15 to Dec. 7 every year.

Medicare Part D – Coverage Gap or “Donut Hole” (medicare.gov)

Most Medicare Prescription Drug Plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2023, once you and your plan have spent $4,660 on covered drugs (the combined amount plus your deductible), you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.

Once you reach the coverage gap, you’ll pay 25% of the plan’s cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your plan has set with the pharmacy for that specific drug. What you pay plus the drug manufacturer discount payment will count toward your true out-of-pocket costs (TROOP).

Items that count towards the coverage gap

1. Your yearly deductible, coinsurance, and copayments
2. The discount you get on brand-name drugs in the coverage gap
3. What you pay in the coverage gap

Items that don’t count towards the coverage gap

1. The drug plan premium
2. Pharmacy dispensing fee
3. What you pay for drugs that aren’t covered

Once you’ve spent $7,400 out-of-pocket in 2023 you’re out of the coverage gap and you automatically get “catastrophic coverage.” Catastropic coverage assures you only pay a small coinsurance percentage or copayment for covered drugs for the rest of the year.

Choosing a good plan

It pays to review your Part D coverage every year. Our agents are available to assist in helping you choose the drug plan that’s right for you.

Getting financial help

To get the extra help in 2023, your total resources must be limited. Resources include the value of the things you own. Such as:

• Real estate (other than your primary residence);
• Bank accounts, including checking, savings and certificates of deposit;
• Stocks;
• Bonds, including U.S. Savings Bonds;
• Mutual funds;
• Individual Retirement Accounts (IRAs); or
• Cash at home or anywhere else.

To apply online or to see if you qualify for Extra Help visit: http://www.ssa.gov/medicare/prescriptionhelp

For more information, contact one of our agents who will help you find a plan that works for you.