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How Medicare Part D Works

Medicare prescription drug benefit or Medicare Part D is the US government’s optional federal government program to help Medicare beneficiaries pay for self-administered prescription drugs. While Medicare Part B covers all professionally-administered prescriptions, Part D covers all prescriptions taken by the patients themselves or with the assistance of a non-professional.

 Before Medicare Part D was signed into law in 2006, Medicare beneficiaries in America paid for thousands of dollars’ worth of medicine with their own money. Fortunately, they can now get Plan D as a stand-alone plan or as part of their Part C plan.

 The benefits in 2019 are also much better than what beneficiaries received when it was first enacted.

 In simple terms, Part D is insurance for your prescription drug needs. You pay a monthly premium to an insurance company and in return, the insurance carrier’s network of pharmacies will give you a discount or coverage when you buy your prescription medications through them.

Part D is divided into four parts:

  • the Annual Deductible
  • Initial Coverage
  • Coverage Gap
  • Catastrophic Coverage.

Each part is designed to help beneficiaries spend less on prescription medicines.

Annual Deductible

A deductible is a specific amount a beneficiary must pay before they can make claims. Insurance carriers may charge the full amount, a percentage, or waive it completely. It’s important to research your options thoroughly. In 2019, you pay the discounted price for your medication until you make an accumulated purchase of $415.

Initial Coverage

Once you pay enough to match the deductible, the insurance company begins to pay a copay to cover part of the cost. Each plan separates medications into their own classifications and assigns the corresponding amount you have to pay. The insurance company will track how much you and the insurer have paid, until it reaches a total of $3,820. Take note, this total does not include the amount the government covers.

Coverage Gap

You will continue to receive significant discounts for your prescription medications after you exceed the amount for Initial Coverage. You only pay 37% of the price for generics and 25% for brand name prescription drugs. You enjoy these discounts until your total out-of-pocket expenses for prescription drugs have reached $5,100.

Catastrophic Coverage

At this point, your insurance carrier will start to pay 95% of the costs for your medications for the rest of the year. This is particularly helpful for beneficiaries who have expensive prescriptions.

 Overall, Medicare Part D is a great way to save money while getting the medication you need. As you battle lifestyle diseases or serious illness, it’s important to have this kind of support. Protect your health from deteriorating any further by taking your medications as prescribed, living a healthy and active lifestyle, and following a balanced diet.

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