What is Medicare Part D?

Medicare Part D covers prescription drugs and is available to everyone receiving Medicare Part A or Part B. It is not means tested, nor is it dependent on you passing a physical exam, and you cannot be refused because of existing health conditions. You also can’t be refused just because you are currently taking many different prescription medications. 

US Drugs vs Other Countries

The United States has some of the most expensive prescription medications in the world, and it’s also one of the most medicated countries in the world, which is definitely not an innocent coincidence. 

The average American, so accustomed to these high prices, rarely acknowledges just how much higher the most basic of medicines are in the US. In 2019, a study compared the costs of prescription drugs in the US to the cost of drugs in Australia, the United Kingdom, Portugal, Canada (Ontario, in particular), Sweden, Switzerland, Germany, Denmark, Japan, France, and the Netherlands.

The tests compared medicine costs throughout the two previous years and found that US prices were nearly 400% higher than the average in these countries. In some cases, the drugs were nearly 5,000% more expensive, and in every instance, the US came out on top.

The same study reported that, through proper use of Medicare Part D, the country could save $49 billion on prescription medications.

How to Get Medicare Part D

To get prescription drug coverage, you need to be enrolled in a private insurance plan provided by Medicare. It is available across the United States through a standalone plan that covers only prescription medications and a Medicare advantage plan, which provides coverage for medicines and other health services.

What You Need to Know About Medicare Part D

Regardless of the type of plan you have, make sure you keep the following in mind:

  • Deductible: For plans with deductibles, you will be required to pay the full amount before the insurance kicks in. For high deductibles and expensive prescription charges, this can result in some seriously sizeable out of pocket expenses.
  • Copayment or Coinsurance: After the annual deductible has been paid, you may still be asked to cover a share of the costs. With the copayment, you’ll pay a flat fee, but with the coinsurance, the fee will be charged as a percentage. This will be paid to the pharmacy when the medicines are collected.
  • Medications: Speak with your doctor to make sure you are getting the cheapest possible medications. Your out of pocket expenses will drop significantly if the medications are cheaper to begin with. 
  • Coverage Limit: If you pay more than $4,020, an amount that changes from year to year, for your medications over the course of a year, you’ll move into a different phase. This is the initial coverage limit and, when it has passed, you will pay no more than 25% for each prescription covered by Medicare Part D.

Catastrophic Coverage: When your out of pocket expenses reach a stage known as “catastrophic coverage,” all additional copayment or coinsurance charges for that year will be much smaller. In 2020, this limit was fixed at $6,350, but it changes every year.