Key Takeaways
- 1Part D covers prescription drug costs
- 2Plans have formularies that list covered medications
- 3There are four coverage phases to understand
- 4Extra Help is available for low-income beneficiaries
Medicare Part D provides prescription drug coverage to help with the cost of your medications. Understanding how Part D works can help you choose the right plan and save money on your prescriptions.
How Part D Works
Part D plans are offered by private insurance companies approved by Medicare. Each plan has a list of covered drugs called a formulary, and drugs are organized into tiers with different cost-sharing amounts.
Coverage Phases
- Deductible Phase: You pay full price until meeting your deductible
- Initial Coverage Phase: You pay copays or coinsurance
- Coverage Gap (Donut Hole): Discounted drug costs
- Catastrophic Coverage: Minimal costs after reaching threshold
Choosing the Right Plan
When choosing a Part D plan, consider your current medications, the plan's formulary, your preferred pharmacies, and the total estimated annual cost including premiums, deductibles, and copays.
