Monday - Friday: 9:00 am - 6:00 pm
Connect with us:

Prescription Drug Plans

Prescription Drug Plans (PDPs) are insurance plans that help cover the cost of prescription medications for individuals enrolled in Medicare, the federal health insurance program for people aged 65 and older, and for some younger individuals with certain disabilities. PDPs are also commonly known as Medicare Part D plans.

Here are some key points to understand about Prescription Drug Plans:

  • Medicare Part D: PDPs are part of Medicare Part D, which is a separate insurance program that provides coverage for prescription drugs. Original Medicare (Part A and Part B) does not include prescription drug coverage, so beneficiaries must enroll in a PDP separately if they want this coverage. You must be enrolled in either Part A or Part B (or both) to enroll in a Part D Prescription Drug plan.
  • Private Insurance Companies: PDPs are offered by private insurance companies that are approved by Medicare. These insurance companies can vary in terms of the drugs they cover, the pharmacies they work with, and the costs they charge.
  • Monthly Premium: Beneficiaries typically pay a monthly premium for their PDP. The premium amount can vary depending on the plan, and some individuals with limited income and resources may qualify for assistance in paying these premiums.
  • Deductible: Many PDPs have an annual deductible that beneficiaries must pay out of pocket before the plan starts covering their prescription drug costs. Not all plans have deductibles, and the amount can vary.
  • Formulary: Each PDP has a list of covered drugs known as a formulary. These formularies include both generic and brand-name prescription drugs. Plans may categorize drugs into different tiers, with different cost-sharing requirements for each tier.
  • Copayments/Coinsurance: Beneficiaries are responsible for paying a portion of the drug costs, either through copayments (a fixed dollar amount) or coinsurance (a percentage of the cost) when they fill their prescriptions. The specific amounts depend on the plan and the drug tier.
  • Coverage Gap (Donut Hole): In the past, there was a coverage gap (often called the “donut hole”) in Medicare Part D, where beneficiaries had to pay a larger share of their drug costs. However, changes in healthcare laws have been gradually closing this gap.
  • Catastrophic Coverage: Once a beneficiary’s out-of-pocket drug costs reach a certain limit, they enter the catastrophic coverage phase. In this phase, they pay a reduced amount for covered drugs for the remainder of the year.
  • Enrollment Periods: Beneficiaries can generally enroll in or change their PDP during specific enrollment periods, such as the Initial Enrollment Period (when first eligible for Medicare), the Annual Enrollment Period (October 15 to December 7 each year), or during Special Enrollment Periods (under certain circumstances).
  • Late Enrollment Penalty: A Prescription Drug Plan Late Enrollment Penalty is a financial penalty that may be imposed on individuals who delay enrolling in a Medicare Part D prescription drug plan (PDP) or a Medicare Advantage plan with prescription drug coverage (MAPD) when they are initially eligible for Medicare.
  • Plan Comparison: It’s important for Medicare beneficiaries to compare different PDPs each year to ensure they choose a plan that best meets their medication needs and budget, as plans can change their coverage and costs annually.

Prescription Drug Plans are an essential component of Medicare for those who require prescription medications. Choosing the right plan can help individuals save on their prescription drug costs and ensure they have access to the medications they need. It’s advisable to carefully review plan options and consult with a Medicare counselor or use Medicare’s online tools for plan comparison before making a selection.

Are your medical prescriptions breaking the bank?

PDPs help cover prescription costs for Medicare enrollees. They’re part of Medicare Part D and offered by private insurers. Monthly premiums and copayments apply, with an annual deductible. Plans have formularies with both generic and brand-name drugs. The “donut hole” coverage gap is being closed. Enrollment and coverage periods apply, with a penalty for late enrollment. It’s important for beneficiaries to compare plans annually.

A Prescription Drug Plan Late Enrollment Penalty is a financial penalty that may be imposed on individuals who delay enrolling in a Medicare Part D prescription drug plan (PDP) or a Medicare Advantage plan with prescription drug coverage (MAPD) when they are initially eligible for Medicare. Here’s how it works:

  1. Initial Enrollment Period (IEP): When you first become eligible for Medicare, you typically have an Initial Enrollment Period (IEP) during which you can sign up for a Medicare Part D plan without penalty. This period usually begins three months before your 65th birthday, includes your birth month, and extends for three months after your birth month.
  2. Special Enrollment Periods (SEPs): In some cases, you may qualify for a Special Enrollment Period (SEP), which allows you to enroll in or make changes to your Medicare Part D plan outside of the IEP without penalty. SEPs are typically triggered by certain life events, such as moving, losing other drug coverage, or qualifying for Extra Help (Low-Income Subsidy).
  3. Late Enrollment Penalty: If you don’t enroll in a Medicare Part D plan during your IEP or a qualifying SEP, and you don’t have other creditable prescription drug coverage (coverage that is as good as or better than Medicare Part D), you may incur a Late Enrollment Penalty when you eventually enroll in a Part D plan. This penalty is added to your monthly premium and is calculated based on how long you went without coverage.
    • The penalty is calculated by multiplying 1% of the national base beneficiary premium by the number of full, uncovered months you were eligible but did not have Part D or creditable drug coverage.
    • The national base beneficiary premium is an annual figure set by the Centers for Medicare & Medicaid Services (CMS).
  4. Duration of the Penalty: The Part D Late Enrollment Penalty is assessed for as long as you have Medicare Part D coverage. It’s important to note that the penalty amount can change each year based on the national base beneficiary premium.
  5. Avoiding the Penalty: To avoid the Late Enrollment Penalty, it’s important to enroll in a Medicare Part D plan when you are first eligible for Medicare, during your Initial Enrollment Period, or during a qualifying Special Enrollment Period.

If you’re uncertain about whether you should enroll in a Part D plan or if you have questions about the Late Enrollment Penalty, it’s advisable to speak with one of our licensed agents or your local Social Security office for personalized guidance. Additionally, staying informed about your Medicare enrollment options and deadlines can help you make the best choices for your healthcare coverage.

Call 530-638-2273 for plan info, a quote or help finding a network preferred pharmacy.

Skip to content