Medicare Prescription Drug Plans

This is a great video to explain Medicare Part D, prescription drug plan, basics.

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Medicare Made Clear:Medicare Prescription Drug Coverage

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What is Medicare Part D?

Medicare Part D is the federal government's prescription drug program that covers both brand-name and generic prescription drugs in every treatment class at participating pharmacies in your area. However, there are no Medicare prescription drug plans that cover all drugs. It's important to check your medications before deciding on a plan.

Prescription medications can be covered under Part B or Part D but never both. If your medication is delivered in a clinical setting it will be covered by Medicare Part B. If you self-administer your medications then they are covered under Part D. If your medications are very expensive you are probably better off seeing if you can get them adiminstered in a clinic.

Medicare Part D is administered as part of the Medicare Advantage program and has the same marketing rules about when you can change, add or drop coverage. The coverage is available to all people eligible for Medicare, regardless of income and resources, health status, or current prescription expenses. Medicare prescription drug coverage is especially valuable protection for people who have very high drug costs. You might qualify for "Extra Help", also known as the "Low Income Subsidy" or LIS if your income and cash assets are below certain thresholds.

Congress decided to make Medicare Part D a voluntary coverage, theoretically to control government costs but it is doubtful that has any impact on how much money is borrowed every year because Congress never permanently funded the program. Although the coverage is voluntary, as is Medicare Party B, Congress created penalties for people who delay enrolling to encourage the risk pools to be as complete as possible, something that does lower individual cost for the vast majority of people.

If you have employer based coverage your health insurer is required to notify you on an annual basis whether or not your coverage is creditable or not. Typically these notices come with other information that is sent annually. You would be well advised to review every section of your annual notices to keep up to date with changes in your coverage. Creditable means that it is considered to be as comprehensive or "good as" as Medicare. If you don't have creditable coverage through an employer or Medicare Part D and you at least have Medicare Part A then you may be subject to a permanent penalty when you do enroll of 1% of the cost of the Medicare standard plan for every month you didn't have coverage after you became eligible which typically is when you turn 65 years old.

Part D late enrollment penalty

The late enrollment penalty (LEP) is an amount added to your Medicare Part D monthly premium.

You may owe a late enrollment penalty if you go without a Medicare Prescription Drug Plan (Part D), or without a Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage, or without creditable prescription drug coverage for any continuous period of 63 days or more after your Initial Enrollment Period is over.

Read what Medicare has to say about the LEP Part D late enrollment penalty

Medicare Part D Extra Help

Extra Help is related to an income standard managed by Social Security known as LIS or "Low Income Subsidy" People that qualify for Extra Healp don't pay the prescription drug plan deductible or gap payments and go straight to the "Catastrophic Coverage" part of the standard Medicare Prescription Drug Plan model.

Rx Co-Pays and Deductibles

Medicare prescription drug plans have four stages: a deductible, initial coverage limit, gap in coverage, and "catastrophic" coverage for people whose total spending reaches the numbers below. The coverage gap is scheduled to be completely phased out by 2020. The Medicare benchmark plan is revised annually to reflect the phasing out of the coverage gap passed by Congress and increased costs to keep the program stable.

IRMAA Surcharges for High Income Earners

You'll get an IRMAA notice if you have Medicare Part B and/or Part D and Social Security determines that any 'Income Related Monthly Adjustment Amounts' (IRMAA) apply to you. The notice includes information about Social Security's determination and appeal rights. This is a means tested additional premium depending on your income. If you are paying an additional amount for your Part B coverage then you can also expect to be assessed additional premiums for Part D coverage.

For more information follow these links:

Historic Pricing










Rx Deductible









Initial Coverage Gap









Coverage Gap Ends









Generic Gap Discount









Brand Name Gap Discount









Not sure if you want a broker to explain plan differences and help you enroll? Use this link to see which plans have the lowest cost for your medications. Call for help at your convenience.
Find and Compare Prescription Drug Plans in your area

Useful tips for Choosing A Prescription Drug Plan

Never enroll in a plan without getting an estimate for your total annual out of pocket expense for the year!!!
I have helped people that got talked into a plan that sounded like it had great features but when we did a comparison of all plans found that some of their drugs were not covered by the plan. In one case that was a $10,000 per year difference between the plan they were sold and the lowest cost plan for that person. Often couples end up in different plans because plans use a list of drugs called a formulary. There are no "open formulary" plans available at this time which is to say that no all drugs are covered by anybody.

In order to find out which plan has the lowest total annual cost for you call or upload your list of prescription drugs on the contact page. We can compare all the plans available to you in just a few minutes and send you that comparison at no charge.

We need the name, dose and frequency of the medications in order to give you a good estimate of your expenses for the year.

It might help you to develop some strategies to help you stay out of the coverage gap. Many people find lower prices for the same medications on web sites that will mail you the medications.

We take the guesswork out of sorting through the plans to make sure that you get the right plan to lower your total out of pocket expense for the year. We share all of those results with you and help you decide which plan will best meet your needs.

How to Save Money Purchasing Prescription Medications

$4 Prescription Drugs
The United States allows companies to maintain patents on prescription medications far longer than any other country. Recently, a growing number of companies have started using their virtual monopoly status to radically increase the cost for retail sales in this country. There can also be very large differences in the prices of prescription medications depending on where you shop. $4 prescription drugs are available at many large box stores. Wal-Mart, Safeway, Kroger/Fred Meyer/QFC, Target, K-Mart and others now offer a list of the most commonly prescribed prescription medications for $4 a month and in some cases $10 for a 90 day supply. The $4 drug list started with Wal-Mart's list which you can see  here Wal-Mart Drug List (download).

Additional Links

General Drug Information

Prescription Discount Cards

To keep reading about Medicare see our Medicare Advantage page.