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What is Medicare Part D

by Garrett Ball
Making Changes to your Medicare During Open Enrollment

Medicare Part D – What Is It, How Does It Work and How To Compare Plans

Most seniors are either already on, or will be on, prescription drugs. It’s just a part of getting older today. Fortunately, these medications help us to manage our medical conditions, prevent others and maintain general health. So once we go on Medicare, we absolutely must understand Part D and how it works. What is Medicare Part D

What Is Part D?

Medicare Part D is the prescription drug coverage portion of Medicare. This part of Medicare is completely optional; however, in order to have any coverage for prescription drugs, you will want to sign up for a Part D plan. What is Medicare Part D
Also, if you do not sign up for a plan when you are first eligible and then later sign up for one, you are subject to the Medicare Part D late enrollment penalty. What is Medicare Part D
Although Medicare itself oversees the Part D program and approves the plans annually, the plans are sold through private insurance companies. Most states have about 20-30 plans available, and the plans are renewed annually. In other words, the plans change each year in most cases, which is why it is important to compare Part D plans annually.
Part D is often referred to as the most confusing part of Medicare. This is primarily because there are so many variables involved, from premium, to co-pays/coinsurance, formulary, pharmacy choice, etc. There is a lot to consider when comparing the plans or considering Part D coverage. What is Medicare Part D

How Does Part D Work?

As mentioned above, Part D is sold through private insurance companies. So, when you sign up for a plan, you are covered by a specific insurance company’s plan. Most companies offer 2-3 coverage levels to choose from.
Each Part D plan has a different premium, different list of covered medications (formulary) and a different cost-sharing structure. If you have a lower premium plan, for example, you may have a larger cost-sharing portion for certain medications. Higher premium plans may give you a lower co-pay portion. What is Medicare Part D
Overall, though, each plan varies considerably and must be considered based on your specific situation.

How to Compare Part D Plans

It is highly advisable to compare Part D plans based on your specific needs and situation – what medications you take and which pharmacy you use specifically. Each plan varies considerably and this comparison can save you hundreds, in some cases thousands, of dollars a year.
Comparing Part D plans is a completely overwhelming task if you try to do it by contacting each individual company/plan. The more advisable way to do it is to compare using the tool on Medicare.gov, Medicare’s website.
On their plan finder tool, you can enter your zip code, your medication names and dosages and your preferred pharmacy to come up with a ranking of which plan would give you the lowest overall annual cost for the following year. It is a good idea to do this annually, or at the least, every two years. This ensures that you are in the most advantageous plan for your specific situation and allows you to compare in an unbiased way. What is Medicare Part D

What is Medicare Part D

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