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The Basics of Medicare Prescription Drug Coverage

 

Have you heard about Medicare prescription drug coverage, but you're not quite sure how it works? Also called "Part D," this type of insurance helps you pay for prescription drugs at participating pharmacies like ours. No matter your health or income, you are eligible for it if you have Medicare.

      To avoid a penalty, you need to sign up for it as soon as you become eligible for Medicare. (This is the period three months before and three months after your 65th birthday.) Even if you don't need a lot of medications now, you might later. That's why it makes sense to consider joining, so you'll pay a lower price in the future.

      Whether or not you choose Part D coverage depends in part on how good your current coverage is. If you're currently covered through your employer or union, they will provide information that tells you how much your current plan covers compared with Medicare.

      You can get Part D coverage in one of two ways: You can join a Medicare Prescription Drug Plan (PDP). Or, or you can join a Medicare Advantage Plan (MA-PD) or another Medicare Health Plan that offers drug coverage. You get all your Medicare coverage, including Part D, through a Medicare Advantage Plan. Both brand-name and generic medications are covered under either plan.

      Available to you through private companies approved by Medicare, these plans vary in cost and the drugs covered. So choose a plan that works best for you. If you need more coverage, for example, you might choose a plan with a higher premium. And, you'll want to make sure the plan you choose covers the drugs you need. The list of drugs covered through the plan is called a formulary. If you want to, you can change your plan each year between November 15 and December 31. Then the new plan begins on January 1.

       Although Medicare doesn't cover all your drug costs, it can protect you if you have high or unexpected prescription drug bills. Monthly premiums range from $8 to $121 with a deductible and small copay for each drug. Premiums are the monthly cost you pay to join a drug plan. The deductible is the amount you pay for prescriptions before the plan kicks in. Copayments are the amount you pay after you've paid the full deductible. If you qualify for extra help due to limited resources, you may not have to pay a premium or deductible. To learn more about this, call Social Security at 1-800-772-1213.

      If you don't qualify for extra help, your drug plan may have what's called the "donut hole."  This coverage gap is a period when you will have to pay for all your prescription drug costs yourself, unless you have a plan that offers some coverage during this gap. It begins once you and your plan have spent $2,830 on prescription drugs. After that, you continue to pay your monthly premium and pay for the next $4,550 of your drug costs. (These figures are for 2010.) In 2010, if you entered the ‘donut hole’ you will receive a one-time $250 rebate check if you are not already receiving Medicare Extra Help.  These checks mailed mid-June.  Once you reach your coverage gap limit, you pay a small amount for each of your drugs for the rest of the year. In 2011, if you reach your coverage gap, you will receive a 50% discount when buying Part D-covered brand-name prescriptions drugs.   

      If you need more information to help you compare plans, go to www.medicare.gov/ or call 1-800-633-4226. I can also provide you with resources that might simplify things for you.