Medicare started offering insurance coverage for prescription
drugs through Medicare prescriptions drug plans and other health
plan options. Medicare's prescription drug coverage will typically
pay over half of your drug costs, for a monthly premium. (see
Medicare Part D)
Important points you need to know:
- Medicare prescription drug coverage helps you pay for the
prescriptions you need.
- Medicare prescription drug coverage is available to all
people with Medicare.
- There is additional help for those who need it most.
- Medicare prescription drug coverage pays for brand name as
well as generic drugs.
Your Medicare Prescription Drug Coverage
What is Medicare prescription drug coverage?
Medicare prescription drug coverage is insurance that covers
both brand-name and generic prescription drugs at participating
pharmacies in your area. Medicare prescription drug coverage
provides protection for people who have very high drug costs or
from unexpected prescription drug bills in the future.
Who can get Medicare prescription drug coverage?
Everyone with Medicare is eligible for this coverage,
regardless of income and resources,health status, or current
When can I get Medicare prescription drug coverage?
You may sign up when you first become eligible for Medicare
(three months before the month you turn age 65 until three months
after you turn age 65). If you get Medicare due to a disability,
you can join from three months before to three months after your
25th month of cash disability payments. If you don't sign up when
you are first eligible, you may pay a penalty. If you didn't join
when you were first eligible, your next opportunity to enroll will
be from October 15 to December 31.
How does Medicare prescription drug coverage work?
Your decision about Medicare prescription drug coverage depends
on the kind of health care coverage you have now. There are two
ways to get Medicare prescription drug coverage. You can join a
Medicare prescription drug plan or you can join a Medicare
Advantage Plan or other Medicare Health Plan that offers drug
Whatever plan you choose, Medicare drug coverage will help you
by covering brand-name and generic drugs at pharmacies that are
convenient for you.
Like other insurance, if you join, generally you will pay a
monthly premium, which varies by plan, and a yearly deductible.
You will also pay a part of the cost of your prescription,
including a copayment or coinsurance. Costs will vary depending on
which drug plan you choose. Some plans may offer more coverage and
additional drugs for a higher monthly premium. If you have limited
income and resources, and you qualify for extra help, you may not
have to pay a premium or deductible. You can apply or get more
information about the extra help by calling Social Security at
1-800-772-1213 (TTY 1-800-325-0778) or visiting
Why should I get Medicare prescription drug coverage?
Medicare prescription drug coverage provides greater peace of
mind by protecting you from unexpected drug expenses. Even if you
don't use a lot of prescription drugs now, you should still
consider joining. As we age, most people need prescription drugs
to stay healthy. For most people, joining now means protection
from unexpected prescription drug bills in the future.
What if I have a limited income and resources?
There is extra help for people with limited income and
resources. Almost 1 in 3 people with Medicare will qualify for
extra help. If you qualify for extra help, Medicare will pay for
almost all of your prescription drug costs. You can apply or get
more information about the extra help by calling Social Security
at 1-800-772-1213 (TTY 1-800-325-0778) or visiting
Things to Consider
There is a monthly cost you pay to join a Medicare drug plan.
Premiums vary by plan.
This is the amount you pay for your prescriptions before your
plan starts to share in the costs. Deductibles vary by plans. Some
plans may not have any deductible.
This is the amount you pay for your prescriptions after you
have paid the deductible. In some plans, you pay the same
copayment (a set amount) or coinsurance (a percentage of the cost)
for any prescription. In other plans, there might be different
levels or "tiers," with different costs. (For example, you might
have to pay less for generic drugs than brand names. Or, some
brand names might have a lower copayment than other brand names.)
Also, in some plans your share of the cost can increase when your
prescription drug costs reach a certain limit.
A list of drugs that a Medicare drug plan covers is called a
formulary. Formularies include generic drugs and brand-name drugs.
Most prescription drugs used by people with Medicare will be on a
plan's formulary. The formulary must include at least two drugs in
categories and classes of most commonly prescribed drugs to people
with Medicare. This makes sure that people with different medical
conditions can get the treatment they need.
Some drugs are more expensive than others even though some less
expensive drugs work just as well. Other drugs may have more side
effects, or have restrictions ono how long they can be taken. To
be sure certain drugs are used correctly and only when truly
necessary, plans may require a "prior authorization." This means
before the plan will cover these prescriptions, your doctor must
first contact the plan and show there is a medically-necessary
reason why you must use that particular drug for it to be covered.
Plans might have other rules like this to ensure that your drug
use is effective.
If you have high drug costs, you may consider which plans offer
additional coverage. In some plans, if your costs reach an initial
coverage limit, then you pay 100% of your prescription costs. This
is called the coverage gap. Some plans might offer some coverage
during the gap. Even in plans where you pay 100% of covered drug
costs after a certain limit, you would still pay less for your
prescriptions than you would without this drug coverage.
Drug plans must contract with pharmacies in your area. Check
with the plan to make sure your pharmacy or a pharmacy in the plan
is convenient to you. Also, some plans may offer a mail-order
program that will allow you to have drugs send directly to your
home. You should consider all of your options in determining what
is the most cost-effective and convenient way to have your
Peace of mind now and in the future
Even if you don't take a lot of prescription drugs now, you
still should consider joining a drug plan. As we age, most people
need prescription drugs to stay healthy. For most people, joining
now means you will pay a lower monthly premium in the future since
you may have to pay a penalty if you choose to join later. You
will have to pay this penalty as long as you have a Medicare drug
plan. If you reach the point where you have spent your plan's
out-of-pocket drug costs during the year, the plan will pay most
of your remaining drug costs. This protection could start even
sooner in some plans.