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Sunday, April 12, 2020

Should I Purchase a Medicare Part D Plan?

If you're on Medicare, you might have heard of the additional plans possible through Medicare. This post from a reader explores whether or not part D is beneficial for you, and who should look into getting it.


Medicare Parts A and B, also known as Original Medicare, only cover hospital stays and medical insurance. It does not cover vision or dental care. Original Medicare also does not cover the cost of prescription drugs. However, individuals who are enrolled in Medicare Parts A and B can obtain prescription drug coverage through a Medicare Part D Plan. However, these plans require extra premiums. And other plans — such as a Medicare Advantage plan (Part C) — may cover the cost of prescription drugs, which would make Medicare Part D unnecessary. But for people who have Medicare Part D, this coverage often provides a sense of security in knowing their prescription drug costs are covered.



What Is Medicare Part D?

Medicare Part D was established in 2003 to address the gap in prescription drug coverage in Medicare. Like Medicare Part C, also known as Medicare Advantage, Medicare Part D is administered by private insurance companies that have been approved by Medicare. Individuals must be enrolled in Medicare Part A and Medicare Part B to be eligible to purchase a Medicare Part D plan. People enrolled in Medicare Advantage plans are not eligible to purchase Medicare Part D coverage. However, many Medicare Advantage plans include prescription drug coverage anyway.

Cost Sharing with Medicare Part D

Although Medicare Part D plans require separate premiums, the premiums do not cover all the costs associated with prescription drugs. Like many commercial insurance plans, a Medicare Part D plan requires cost sharing from its policyholders. Along with premiums, Medicare Part D programs usually include deductibles, coinsurance, copays or some combination of all three.

Deductibles represent the amount of out-of-pocket payments that patients must make before insurance payments take over. Coinsurance is the percentage that patients must pay out of pocket for prescription drugs after meeting the deductible. Copays are fixed out of pocket payments that patients must make after meeting the deductible. In addition, many Medicare Part D plans exclude coverage for certain medications and carry higher prices for name brand prescriptions than for so-called generic drugs.

Is Medicare Part D Needed?

As stated above, a Medicare Part D plan is designed to fill the gap in prescription drug coverage in Original Medicare. People who are enrolled in Medicare Parts A and B who need or want prescription drug coverage should consider purchasing Medicare Part D coverage. However, people who have Medicare Advantage plans cannot purchase Medicare Part D and probably don’t need this coverage anyway. Likewise, people who receive prescription drug coverage through a plan administered through a union or a former employer do not need to purchase Medicare Part D coverage.

Covering Prescription Drug Costs

Medicare Parts A and B provide comprehensive hospital and medical coverage for millions of seniors and disabled individuals. However, Original Medicare has several significant gaps in coverage, including vision screening and dental care. Prescription drug coverage is perhaps the most significant gap in Original Medicare coverage. A Medicare Part D plan can fill the gap in prescription drug coverage for people with Original Medicare.

Medicare Part D plans are administered by commercial insurers that have been approved by Medicare, and carry separate premiums. In addition, many Medicare Part D plans also require policyholders to pay deductibles, coinsurance, copays or a combination of all three.

Not everyone needs Medicare Part D coverage. People with Medicare Advantage plans or people who have coverage from a former employer or union do not need Medicare Part D coverage. In these cases, Medicare Part D represents an extra expense that can be avoided. However, for many people with Original Medicare coverage, Medicare Part D plans provide a welcome sense of peace of mind.

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