Medicare Part D

How Medicare Part D Plans Work

Here are a few important highlights about how Medicare Part D works.

If you are eligible, you should enroll or pay a penalty later.

To be eligible, you must be entitled to Medicare Part A and/or enrolled under Part B. You also must live within the insurance company’s area of service. If you don’t enroll in Part D when you are first eligible, you may have to pay a penalty later.

There are some out-of-pocket costs.

• You will pay a copay or coinsurance for your prescriptions.
• Some plans also have a deductible that will need to be met before benefits begin.
• After spending a government-set amount of money on medications, you will pay nothing for the rest of the year.
• Copayments and coinsurances can change during these times.

You might need prior authorization.

Some drugs need to be approved by the plan before they are covered. This is so the plan can best guide appropriate use of these drugs. Your doctor can help you get approval.

Expensive drugs may require Step Therapy program participation.

Step Therapy is a program that asks you to start treatment with a more affordable yet effective drug (for instance, a generic name drug) instead of starting with a more expensive drug. If the first drug does not work for you, then the plan will cover the more expensive drug.

There can be limits on how much of a drug you’re allowed.

There may be quantity limits applicable to your covered drugs. The limit could be for how many pills you get with each prescription or how many times the prescription can be refilled. Generally, these limits are based on safety guidelines.

Drugs are placed into tiers according to costs.

In prescription drug plans, drugs are placed into tiers. The costs for drugs in each tier are different. Generally, drugs on lower-number tiers cost less.

The tiers are:

• Tier 1 — Preferred Generic Drugs
• Tier 2 — Generic Drugs
• Tier 3 — Preferred Brand Drugs
• Tier 4 — Non-Preferred Drugs
• Tier 5 — Specialty Drugs