Choosing A Plan
Medicare Part D prescription drug plans are offered by private companies or non-profit organization. These plans fall into one of three general types of categories:
- Standard Prescription Drug Plans (PDP's): These plans add prescription drug coverage to original Medicare and provide initial benefit for drug costs up to approximately $2,850 in 2014. After you reach the initial coverage threshold of $2,850, you are responsible for 47.5% for brand name drugs and 79% for generic drugs, until you have paid $3,605.00 in out-of-pocket expenses (including the cost of copays and drugs that you pay for, but excluding premiums.) This is called the coverage gap. After the $3,605.00 in out-of-pocket expenses are paid by you, Medicare offers a catastrophic drug benefit that pays approximately 95% of your drug costs.
- Enhanced Prescription Drug Plans: These plans are similar to standard PDP's, except enhanced plans provide more extensive benefits, such as paying for some or all drug costs in the coverage gap, lower copays, or including certain prescription drugs not required by Medicare to be covered.
- Medicare Advantage Prescription Drug Plans (MA-PD's): These are plan options, like an HMO or PPO, that are approved by Medicare and offer Part A (hospital) and Part B (medical) coverage as well as prescription drug coverage. In addition to covering all of the costs that original Medicare covers, MA-PDs may also offer extra coverage. To join a Medicare Advantage Plan, you must have Medicare Part A and Part B.
Although every plan provides a Medicare-required standard of coverage, no two plans are alike. Some cost more. Some cost less. Some plans have very generous benefits, while others provide limited benefits. Some plans cover the prescriptions you need; others may not cover them at all. Some plans use your favorite pharmacy. Others may not.
Which plan you choose depends on a number of factors, but basically they can be reduced to just three:
- How much will you pay in out-of-pocket costs?
- Are the drugs you need covered?
- Can you use the pharmacy you want?
This website provides key information that you need to review to make an informed choice about which one to sign up for, including:
- Practical how-to advice on how to choose a Medicare Rx plan; and
- Summaries of all of the plans and benefit options from which you can choose. Reviewing these summaries should give you a good idea of whether a plan meets your needs and budget.