Understanding Medicare Prescription Drug Coverage (Part D)

Many people are surprised to learn that Original Medicare (Parts A and B) does not include coverage for most prescription medications. If you take medications regularly or anticipate needing them in the future, it’s important to understand how to get this coverage and what your options are. 

Prescription Drugs Are Not Covered by Original Medicare 

One of the biggest misunderstandings about Medicare is that it covers prescription drugs picked up at the pharmacy. In reality, Original Medicare only helps with hospital and outpatient care—it does not include standard prescription medications. 

To avoid high out-of-pocket costs, you may want to consider additional coverage specifically designed for prescriptions. This can be obtained through a standalone Medicare Part D plan or a Medicare Advantage plan that includes drug benefits. 

What Is Medicare Part D? 

Medicare Part D offers prescription drug coverage through private insurance companies. These standalone plans are meant to work alongside your Original Medicare benefits. 

With Part D, you pay a monthly premium, and the plan helps cover the cost of medications included in its list of approved drugs (called a formulary). When you fill a prescription, you'll typically pay either a flat copay or a percentage of the drug’s cost—depending on the plan and the tier the medication falls under. 

Because plans are offered by private companies, details such as monthly premiums, deductibles, and copay amounts can vary. What’s available to you also depends on your location and the insurance providers in your area. 

Common Part D Costs 

Here are some expenses you may encounter with a Part D prescription plan: 

• Monthly Premium: A recurring monthly fee to maintain your coverage. 

• Annual Deductible: Some plans require you to pay a certain amount out-of-pocket each year before your coverage begins. 

• Copayment/Coinsurance: The amount you pay for each prescription, which can vary based on the drug tier. 

Things to Know When Comparing Plans 

How much you pay for prescription drug coverage will depend on the medications you need and how your plan structures its coverage. Each Part D plan has its own formulary, and drugs are grouped into different tiers with varying costs. 

Plans may also update their drug lists and pricing each year, so it’s essential to review your plan annually to make sure it still fits your needs. 

If you have questions or need assistance, call one of our Licensed Agents at
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