How Does Medicare Part D Work?

Of the four parts of Medicare, Part D is the newest and the most complex. I still get asked what is Medicare Part D which means that the government is failing to do a proper job of educating seniors on this very important and vital part of Medicare. Medicare Part D covers prescription drugs that are typically filled at your local pharmacy or filled through mail order. The typical Part D drug plan consists of four Tiers generally referred to as Tier 1, Tier 2, Tier 3, and Tier 4. Tier 1 is for generic drugs, Tier 2 is for Preferred Brand, Tier 3 is for Non-Preferred Brand, and Tier 4 is for Specialty drugs. We are now also starting to see a 5 Tier structure with some of the Medicare Part D plans. The extra Tier is used with the generics creating a Preferred Generic as well as a Non-Preferred Generic.

Medicare Part D is administered through private insurance companies such as Humana, Wellcare, BCBS, United Healthcare, Healthsprings, and many others. They are county specific, and their costs vary greatly from plan to plan and from region to region. All plans carry a monthly premium. Also take note of whether or not the plan has a deductible. Deductibles are common in Part D plans. The important considerations when determining the best drug plan for you is to consider the costs, formulary, and your pharmacy choice. A formulary is a list of drugs that is covered by the plan as well as their level of coverage or Tier.

NOTE: Not all formularies are created equal! Many times you will find your drug on one formulary and not on another. Also, it is not unusual to find your drug on different Tiers on different formularies.

Finally, to complicate things even more they throw in the coverage gap, enrollment periods, and a penalty. A separate article could be written on each of these subjects, so I'll just mention them here.

In summary, you will pay a monthly premium for Part D of Medicare which will be determined by which plan you select. You need to check the plan's formulary against the drugs you are taking to determine whether your drug is covered and how well it is covered. A great resource to accomplish this is online at medicare.gov. In order to find more information on a comapny like Wellcare or Healthsprings, you may also want to visit the plan's website.

NOTE: Some people qualify for assistance with paying for their Medicare Part D drugs. The assistance could be in the form of premium assistance as well as co-pay assistance. If you qualify for assistance you will not have to worry about the Medicare Part D Donut Hole or Coverage Gap.