Medicare can be a confusing health care system to navigate. Original Medicare (Medicare Part A and Part B) helps cover many, but not all, hospital, skilled nursing, hospice, and outpatient costs. If in good health or on a budget, it might be easy to wonder why one would consider getting a more comprehensive insurance plan. There are plenty of benefits; however, that can make more comprehensive health care plans and policies beyond Parts A and B a good choice for certain individuals.
Medicare Part D (Medicare prescription drug benefit) is one way to extend health care benefits. This part of Medicare helps cover the costs of certain prescription drugs and is available to eligible individuals who are already enrolled in either Medicare Part A or Part B.
What Is Medicare Part D? What Does It Cover?
Before someone can determine if he or she needs the added protection of this plan, it is necessary to know a bit about it first. In a nutshell, Medicare Part D provides assistance in paying for certain branded and generic drugs. Private insurance companies that are authorized by Medicare provide Part D plans/policies. Note that while some Medicare Advantage Plans (Part C) might provide similar coverage to that of Part D, Medicare Parts C and D are two distinct parts of Medicare that should not be confused with each other.
According to the official government Medicare site, each Part D plan has a distinct premium paid on a monthly basis. Individual plans should list which drugs they help cover. Often, drugs are categorized into levels, with lower-level medications typically costing less than those ranked higher. Plans usually work by providing a lower payment for more expensive drugs.
Always check to see what kinds of prescription drugs and other types of costs a plan will cover. This step is especially important for those who have multiple plans and policies, as some policies will not cover the costs associated with other policies; in certain cases, it may not even be possible to combine some policies together.
Those who have limited financial resources may be eligible for assistance in paying for Part D plans/policies. Further information can be found on the official government site for Medicare.
Benefits of Medicare Prescription Drug Benefit (Part D)
An optional part of Medicare, Part D may not be the right choice for everyone looking to expand their Medicare coverage. Medicare Part C, state-specific supplemental plans and Medigap policies are all just some of the other options someone might look into in order to expand their Medicare Part A and/or B coverage. Some factors to keep in mind before adding Part D coverage include:
Potentially lower long-term costs
For some, Part D may lower long-term costs and/or provide greater financial resources to help cover prescription drug prices. Premiums that enrollees pay are not for present use, but rather are to protect them against future risk. In this case, the protection is against expensive drug costs that may arise in the future. Enrolling in a plan before it is actually needed can potentially save money in long-term costs.
Part D has a late enrollment penalty
Late enrollment into Part D may result in monthly penalty fees for as long as the enrollee continues to have Medicare Part D coverage, according to the official government site. In other words, going without prescription coverage—either through Part D or another type of creditable drug coverage—more than 63 days after the initial enrollment period ends may result in a monthly penalty fee in addition to monthly premiums for prescription drug coverages through Part D. Part D initial enrollment is 7 months long: from the 3 months before your 65th birthday, the month of your birthday, to the 3 months after your 65th birthday. There’s also a yearly open enrollment period from October 15 to December 7.
Specifics and further information can be found on the official Medicare government site.
Expansion of health care options
Part D provides additional options to those looking for help in covering the cost of prescription drugs.
Whether one decides to use a drug coverage plan provided by an employer, enroll in a Part D plan, or other creditable option, an important factor to consider is whether a current drug coverage plan is as good as or even better than a plan offered by Medicare Part D. The U.S. Office of Personnel Management encourages individuals to consider whether any existing coverage or coverage they may be eligible for is as good as, or even better than, plans provided through Medicare.
Make the Informed Choice
Just like with any health care-related choice, it is vital to make an informed decision. Medicare Part D coverage benefits and costs should be weighed carefully against other existing policies and plans.
Disclaimer: This article is neither reviewed nor endorsed by Medicare.