Want to sign up for Medicare part d prescription drug plan? First have a look at what it is and how it works. It will help you to make decision wisely and save money as well.
Medicare Prescription Drug Plan
The Medicare prescription drug benefit also known as Medicare Part D. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) established a voluntary outpatient prescription drug benefit for people on Medicare, known as Part D. Anybody who has either Medicare part A or part B is entitled for part D.
The drug benefit, which took effect in January 2006, helps cover costs of prescription drugs and is available to all Medicare beneficiaries who enroll in private plans approved by Medicare to offer coverage.
Enrollees in Medicare drug plans pay a monthly premium to the plan.
The drug benefit is offered through two types of private plans:
- Stand-along prescription drug plans (PDPs)
- Medicare Advantage Prescription Drug (MA-PD) plans such as HMOs or PPOs.
The benefit includes additional assistance with plan premiums and cost-sharing amounts for low-income beneficiaries. Medicare replaced Medicaid as the primary source of drug coverage for low-income and disabled people with both Medicare and Medicaid (dual eligible).
Am I Eligible for Medicare Part D?
Anybody who is eligible or already on Medicaid is eligible for Part-D. Joining Medicare drug coverage (Medicare Part D) is completely voluntary. However If you do not have any drug coverage plan, better sign up as soon as possible because delay in joining the could increase your premium.
If you have better drug coverage plan ( enrolled through current employer ), you don’t have to join Medicare Part D. But if you are still carrying mediocre drug coverage plan, consider joining Medicare drug coverage. Delay in joining will cost you a late penalty that adds to your premiums for as long as you’re in the program, except in certain circumstances, and you’ll be able to enroll only during open enrollment at the end of the year.
Medicare Part D Donut Hole
Do you know that there is a “Donut Hole” in part d prescription drug plan. Many people don’t realize that there may be coverage gap of what prescription drug plan offers and what you have to pay out of pocket. this gap in coverage is called donut hole.
Once you have reached your drug plan coverage limits, you may have to pay all cost of the drug out of the pocket until you reach catastrophic-coverage threshold. After reaching catastrophic-coverage threshold, you will again starts paying small co-payment for the drugs.
Cost of Medicare Part D Premium
After enrolling in the drug coverage plan by Medicare, you have to pay monthly premium and the annual deductible before coverage starts paying. Monthly premiums are not fixed and may vary by plan (higher-income consumers may pay more). Check out the link to get exact idea of premium.
According to Medicare.com,
No Medicare drug plan may have a deductible more than $360 in 2016. Some Medicare drug plans don’t have a deductible.
Average basic premium for a Medicare Part D prescription drug plan in 2017 is projected to remain relatively stable at an estimated $34 per month
So maximum deductible in 2016 is $360 and it would be no more than $408 for 2017.
How Much Does Medicare Part D Cost
There are many insurance companies who offers Medicare Prescription Drug Plans. Here is a list of some of the best prescription drug plan providers like AARP and Humana.
For AARP part D cost provided by United Healthcare Click Here.
For Humana Part D Plans, Click Here
For Cigna Part D Plans, Click Here
Part D Premiums by Income
Here is a table published by Medicare for 2016. You can estimate your premium bases on table as its gonna stay the same for 2017 as well. I will update the table based on new inputs from Medicare.
|If your filing status and yearly income in 2014 was|
|File individual tax return||File joint tax return||File married & separate tax return||You pay (in 2016)|
|Less than $85,000||$170,000 or less||$85,000 or less||Your Plan Premium|
|above $85,000 up to $107,000||above $170,000 up to $214,000||not applicable||$12.70 + your plan premium|
|above $107,000 up to $160,000||above $214,000 up to $320,000||not applicable||$32.80 + your plan premium|
|above $160,000 up to $214,000||above $320,000 up to $428,000||above $85,000 up to $129,000||$52.80 + your plan premium|
|above $214,000||above $428,000||above $129,000||$72.90 + your plan premium|