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Understand Medicare

Medicare Part D: Prescription Drug Plans

Medicare Part D prescription drug plans are provided by private insurance plans under contract with Medicare. If you don't enroll in a Part D plan when you are initially eligible and enroll later, you might have to pay a monthly late enrollment penalty for as long as you have Part D. But if you had "creditable" coverage before your delayed enrollment in Part D, then you would not need to pay a late penalty. "Creditable" coverage is prescription coverage that is at least as good as standard Part D coverage.


Part D Options

There are two types of Part D plans: “Combined coverage“ and “Stand-alone coverage.“

“Combined coverage” means Medicare plans that offer Part D coverage in addition to hospital and medical coverage like Medicare Advantage and Cost plans.

“Stand-alone coverage” means Part D plans that provide only prescription drug coverage. These Part D plans can be paired with Original Medicare alone or also with some private health plans, like Medicare Cost plans or Medicare Supplement (Medigap) plans.

Stages and Cost Sharing

Annual Deductible: The amount you must pay each year for your prescriptions before your Medicare Part D plan begins to pay its share of your covered drugs.
You pay $415
Initial Coverage: Once you meet your annual deductible, your plan pays for most of your drug costs, and you pay a set amount (copay) or a percentage of the costs (coinsurance).
You pay 25%
Coverage Gap: Most Part D plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs. The gap begins once you and your plan have paid $3,820 for covered drugs for the year.
You pay 37% for generic drugs and no more than 25% for covered brand-name drugs**
Catastrophic Coverage: Once you’ve spent $5,100 out of pocket in 2019, you’re out of the coverage gap, and receive “catastrophic coverage.” This means you’ll only pay a small copay or coinsurance for covered drugs the rest of the year
You pay $3.40 or 5%** for generic drugs and $8.50 or 5%** for other drugs

Choosing the Right Plan
Learn about types of Medicare plans

* Part D plan benefits vary by carrier and product offerings
** Whichever is greater.

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Y0088_4949 CMS Approved
Last Updated: April 2019