Aging Well: Understanding Medicare prescription drug coverage

Costs of medications can pile up quickly; correct information and good choices are vital


Medicare help

■ Compare prescription drug plans, view the “Medicare & You” handbook and get other important information at

■ The Extra Help program helps eligible low-income older adults pay Medicare prescription drug costs. To apply, call 1-800-772-1213 or visit

■ Medicare Savings Programs help eligible low-income older adults pay for Medicare-related costs. For more information, call (303) 866-2993 or visit

■ The Colorado Senior Health Insurance Assistance Program offers free confidential counseling to individuals needing help choosing a Medicare health and prescription drug plan and navigating other Medicare issues. To schedule an appointment, call 970-879-0633 or 888-696-7213.

Editor’s Note: This is Aging Well’s second article this spring about Medicare. An article about Medicare parts A and B was published in the Steamboat Today on March 14: Medicare — Know the basics

Prescription medicine is a routine part of many older adults’ lives, and the costs of these medications add up quickly.

Understanding Medicare prescription drug coverage can help older adults make the right choices and choose plans that will save them the most money.

The following information outlines important points about Medicare Part D for prescription drug coverage.

How you get it

Part D prescription drug coverage is provided by Medicare-approved insurance companies.

You can enroll in a Medicare prescription drug plan once you are enrolled in original Medicare parts A and/or B (hospital and medical insurance).

Medicare Advantage Plans — privately-run plans that include Medicare-covered services and other benefits — usually include prescription drug coverage. However, the following information applies to prescription drug coverage and original Medicare.

You automatically will be enrolled in Medicare parts A and B the month of your 65th birthday, or you might have to enroll yourself, depending on whether you are receiving Social Security benefits.

Most disabled individuals younger than 65 automatically get parts A and B after receiving disability benefits from Social Security for 24 months.

In all cases, you first are eligible to enroll in a prescription drug plan for a seven-month period, beginning three months before your 65th birthday — or in the 25th month of disability benefits.

Most people who do not enroll when they first are eligible must wait until open enrollment, which is Oct. 15 through Dec. 7. This also is the time to change or drop prescription drug plans. Any new coverage begins Jan. 1.

It’s a good idea to re-evaluate your prescription drug plan each year to make sure it is the best choice for your needs.

Various plans are available based on where you live and what types of medications you use. You can search and review plan options in your area with the Medicare Drug Plan Finder at You can apply for a plan through the website or by calling 1-800-633-4227.

Usually, you will receive a welcome package and membership card within five weeks of applying. Make sure you have a temporary membership card or enrollment confirmation number or letter, or save receipts for reimbursement once you have your card.

Most people must stay enrolled in the plan they choose for a calendar year.

Late enrollment

If you forgo a prescription drug plan when you first are eligible, you risk paying a penalty if you enroll later. This can happen if you do not have comparable prescription drug coverage from an employer or other source during your time of eligibility or during a certain amount of time prior to late enrollment.

In certain situations, you may enroll without penalties, change or drop plans at other times. These circumstances include moving out of a plan’s service area, losing prescription drug coverage with an employer or another source, or qualifying for the Extra Help program, which helps pay Medicare prescription drug expenses.

If you have other prescription drug insurance, be sure to find out how it works with or is affected by Medicare prescription drug coverage. Joining a Medicare drug plan could provide additional coverage to some government health plans.

If you have prescription drug coverage through your employer or union, you could risk losing your group health coverage for yourself, your spouse and/or dependents if you join a Medicare drug plan. Discuss this with your benefits administrator before making any decisions.

What’s covered

Part D drug plans generally cover prescription drugs used and sold in the U.S. for medically accepted purposes. These include insulin, most vaccines and medical supplies needed for insulin injections.

Each plan has a list, also known as a formulary, of specific drugs it covers. Formularies can be found by calling individual plans or visiting their websites.

Many Medicare drug plans place drugs into different tiers based on cost. If a doctor thinks you need a drug on a higher tier instead of a similar drug on a lower tier, you can file an exception with your drug plan to request a lower co-payment.

Some drugs or classes of drugs are excluded by law from Part D coverage, though some drug plans might choose to include them as part of supplemental benefits not covered by Medicare.

Some prescriptions administered at a hospital or skilled-nursing facility, or as part of a physician service, may be covered under Medicare parts A or B, though deductibles or copayments will apply.

What you pay

Actual costs vary depending on the plan, your prescriptions, whether you use a pharmacy in your plan’s network, whether your drugs are on the plan’s formulary list and whether you receive financial assistance from the Extra Help program.

Most plans charge a monthly fee or premium, which is not included in your Part B premium. Unlike Part B, Part D premiums are not deducted from your Social Security payments unless specifically requested.

Part D premiums can change based on changes in your income.

Some plans have a deductible or amount that must be paid before the plan covers any prescriptions. After satisfying any deductible, you will pay copayments, or “your share” of costs for covered drugs.

Most plans have a coverage gap or “donut hole,” which happens after you and your plan have spent a certain amount of money for covered drugs. A person then must pay all drug costs up to a yearly out-of-pocket limit. Annual deductibles and co-payments count toward out-of-pocket limits.

Some plans offer some coverage during the gap for generic drugs, though higher monthly premiums usually apply.

If you reach the gap this year, you will get a 50 percent discount on covered brand-name drugs. There will be additional savings during the coverage gap every year through 2020, when you will have full coverage in the gap.

Once you reach your plan’s out-of-pocket limit, a plan provides “catastrophic coverage” for the rest of the year. A small co-payment still may apply.

This article includes information from and the 2011 “Medicare & You” handbook.

Tamera Manzanares can be reached at Fore more information, visit or call 970-871-7606.


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