The Facts / Part D

Medicare Part D: Should I enroll?

Part D is a Medicare program administrated by a third party, usually an insurance company, that offers coverage for prescription drugs. The cost is based on what plan you choose and how much medication you take. In addition, if you do not take any prescriptions you can choose not to enroll. However, if and when you need it, you will only be able to enroll once a year during the yearly open enrollment period between Oct 15th and Dec 7th, effective Jan 1st. Moreover, you will be penalized with a penalty of 1% of the national premium rate per month for each month you delay enrollment (FOR THE REST OF YOUR LIFE) (more on the part D late enrollment penalty)

Consider that it might be beneficial to enroll even you do not take any prescription medications at this time. You can enroll in the cheapest plan and upgrade your plan during the next open enrollment period when necessary.

If you are taking medication, especially if you take expensive drugs, you will need to choose a plan from among 30 to 60 different plans. Any plan you choose will have a premium and deductible cost as well as copayments for the medications you take. Here is where it gets complicated:

Each available Medicare Prescription Drug Plan (Part D) has its own list of covered drugs. The drugs are categorized into 5 tiers and each tier has a different copayment. Each plan has different drugs in each tier. The higher the tier, the higher your out of pocket costs will be. Each year they can change the classifications of drugs from tier to tier and your doctor may change your medications in the middle of the year. This means that the costs of your medications will vary and the plan that was right for you this year can be the absolute worst plan for you next year.

Remember: You can only change your plan once a year at open enrollment so choose carefully.

Coverage for the medications caps out at $3700 in 2017. What happens if your medications cost more than that? Under your Part D Medicare plan, you’ll be responsible to pay 40-50% of the cost of your drugs up to $4950, which is the out of pocket threshold. This gap, also known as the donut hole, means you may be spending more than you anticipated.