Updated: May 16, 2018
A typical part D plan’s coverage works like this...You'll have a deductible that you have to meet before the plan starts paying anything for your medications. Some plans only have deductibles for certain tiers of drugs, usually costly medications. Other plans have no deductible at all. Once you’ve reached your deductible, you’ll pay just a copay or coinsurance for the prescription medication expenses, leaving the amount remaining for your PDP to pay. This is how things will work until reach the donut hole or Part D gap limit (In 2018, that limit is $3,750). When this limit is reached, you will be in charge of paying 35 percent of your name brand prescription drug costs and 44 percent of generic drug cost. It will remain this way until you hit your yearly maximum out-of-pocket ($5,000 in 2018). If you make it out of the donut hole and to the other side you will begin receiving catastrophic coverage. At this point you may get your prescription medications completely covered or at a much smaller cost for the rest of the season, typically about 5% of the cost of your drugs.
Understanding part D costs might help you budget your expenses and work toward getting more coverage from your plan. Using Rx help discount cards and other programs in the coverage gap may actually hurt you financially if you come out of the coverage gap during the year. This is because when you use a Rx help card in the coverage gap none of those funds to pay for your medications are applied to your max out of pocket, keeping you in the donut hole longer.
Who's Eligible For Drug Cost Help Under Part D?
There are a few things to consider whenever enrolling in any part D plan. One is your Medicare eligibility and the other is the Enrollment Period. To become eligible for Medicare, you typically need to be 65 or older. There are some exceptions to this, like people who have been on Social Security disability for 2 years or more and those with certain critical illnesses, like renal failure.
You must also enroll during open enrollment, your intial election period (just getting on Medicare) or during a special election period or SEP. During open enrollment (Oct 15 - Dec 7th) anyone with Medicare part A or B can enroll in a Part D plan. Once enrolled the plan will become effective Januaray 1st of the next year. When first qualifying for Medicare you have the 3 months prior to your coverage start date and 3 months after your start date to enroll. Lastly, sometimes you may have special periods known as SEP's that you may enroll in part D coverage. Some common SEP's are losing group coverage, moving to another county and being dual eligible (having both Medicare and Medicaid).
Drug Cost Help in the Donut Hole
As mentioned earlier it's important to consider the use of discounts Rx help cards and other programs inside the coverage gap. Sometimes the cost of medications inside the donut hole make these prescriptions no longer affordable and financially out of reach for patients. When this happens it may be time to take a look at Manufactures Prescription Assistance programs or PAP's. For lower income customers PAP's can provide a patient with little to no cost medications sent directly to the patient or their doctor's office. MedCard offers a free PAP tool at no cost to members. You can determine if your medication is eligible, if you're eligible and receive assistance applying for your drugs PAP. To learn more about the Medicare Part D donut hole and Prescription Drug Plans in general you may want to speak with a local health insurance broker that can help you find the right program for your individual situation.