What Is A Prescription Drug Plan And Why Do You Need One?

Prescription Drug Plans, or PDPs, are an optional component of Medicare coverage. Most PDPs are through Medicare Part D. You can also get prescription drug coverage through Medicare Part C or Medicare Advantage.

In this article, we’ll jump right into the world of prescription drug plans and why they’re important.
 

How Can I Enroll in a Prescription Drug Plan?

You’ll have the opportunity to sign up for a PDP when you first enroll in Medicare. While Medicare laws vary slightly from state to state, you’ll generally be able to enroll three months before you turn 65, which is known as the initial enrollment period and will continue until three months after you turn 65.

For those under the age of 65, it’s still possible to enroll in Medicare as long as you have a qualifying disability, in which case you can be eligible for Medicare once you’ve reached your 25th month on disability. Your initial enrollment period will start three months before this and continue three months afterwards.

This initial enrollment period is an ideal time to sign up for all of your Medicare coverage. However, if you don’t sign up during this time period, you do have the option to sign up later during general open enrollment. If you sign up during this period, you’ll have to pay an additional fee, which is why it’s financially advantageous to sign up earlier.

There’s a variety of ways and methods in which you can sign up for Medicare.

The easiest way to enroll in a PDP is online through CMS.gov and the Social Security Administration website. There are many other options, however, for those without internet access or those who prefer an offline approach. You can call 1-800-MEDICARE, a hotline that will help you find a PDP in your state that works with your needs.

This is a great option if you have any questions about the process and prefer speaking with a live customer support agent. They can help guide you through the process as well as help you understand what to expect from each plan.

Medicare can also send you application paperwork via mail. If you’re applying for a prescription drug plan through Medicare Advantage, you can apply directly through the private insurer offering the plan.

PDPs are included in Medicare Part D, which is optional. While you don’t have to sign up for Part D when you enroll in Medicare, it’s very beneficial to do so from both a health perspective and a financial perspective.

Medicare Part D is designed to supplement Original Medicare, which comprises Part A and Part B. In most cases, Part A covers inpatient hospital treatment while Part B covers outpatient procedures.

Alternatively, many people opt to purchase a Medicare Advantage (Part C) plan instead, which combines Parts A, B, and D into one plan. Part A is usually available without a monthly premium, but Part B has a standard premium amount. Individuals with an income of $88,000 per year or more will pay higher rates for their Medicare coverage.
 

Medicare Advantage Prescription Drug Plans

Another way to get a prescription drug plan is through Medicare Advantage. Medicare Advantage plans are provided by private insurance companies whereas traditional Medicare plans are offered through the Centers for Medicare & Medicaid Services (CMS).

Most Medicare Advantage plans include prescription drug coverage, although there are some plans that don’t. Medicare Advantage plans often include extra coverage that you can’t get with Original Medicare plans, which is why many people opt to purchase them.

Medicare Advantage plans often have more expensive premiums than Original Medicare, but this can vary depending on a number of different factors. The provider you choose, your income, and the state you live in can all have an effect on the amount of money you pay in premiums.
 

How Much Do Prescription Drug Plans Cost?

The cost of your PDP can vary widely. These costs are dependent on your personal financial situation as well as the plan you choose. However, most PDP plans are very affordable.

If you’re buying a Medicare Part D plan through the government, the average cost is about $32 per month for a basic plan or $44 per month for a plan with more benefits. However, plans can cost as little as $10 per month or as much as $200 per month depending on other external factors.

If you’re purchasing a Medicare Advantage plan, the cost of your prescription drug coverage is built into your total premium. The cost of a Medicare Advantage plan is going to be highly dependent on the insurer and the benefits they offer, as well as your own income, the state you live in, and other factors.

Some Medicare Advantage plans have $0 monthly premiums, but they can be much higher depending on the type of coverage you opt for.
 

Do Prescription Drug Plans Have a Deductible?

Part D coverage has a maximum deductible that is set each year, but your actual deductible may be less depending on what type of prescription drug plan you ultimately choose. Some plans do not have any deductibles at all.

After you meet your deductible, you’ll pay co-pays on your prescription drugs until the total amount spent that year reaches your maximum out of pocket dollar amount. This includes the total amount covered as well as the amount you’ve paid in co-pays. Co-pays for prescription drug plans are usually 25 percent.

There are resources available for those who are struggling to pay their co-pays. Medicare’s Extra Help program can provide assistance, as can many state-sponsored programs. Just know that these programs usually have income limits.
 

What Are the Benefits of Having a Prescription Drug Plan?

Because prescription drug plans are not part of Original Medicare, it can be tempting to skip them – but you shouldn’t. There are so many benefits to investing in a PDP for both your health and your wallet.

Prescription drugs are an important part of healthcare. Even if you’re seeing a doctor in person for a medical condition, you may not be able to heal properly without prescription drugs. With that said, prescription drug costs in the United States can get very expensive. This is particularly true if you need name brand products or if you’re taking several kinds of drugs at once.

With a prescription drug plan, you’ll spend much less on all prescription drugs so you can take care of your health without having to worry about the financial implications. While Medicare Part D plans do have deductibles and co-pays, these are a fraction of the price you would pay out-of-pocket. This is particularly important as you get older, as we are more likely to develop ongoing health issues as we age.

Most prescription drug plans have affordable monthly premiums. The cost of a prescription drug plan is typically correlated with your income as well to increase the chances of it being affordable. It’s also easy to sign up for a prescription drug plan online and there are many resources available to make the process easier.
 

Conclusion

Every Medicare beneficiary should ensure that they have a prescription drug plan in place. These plans are essential, as prescription drugs are a very important part of healthcare. Signing up during the initial enrollment period ensures that you get the best possible price.

Beneficiaries have the option to choose from many different plans, including Medicare Advantage plans, so you can choose the option that is best for your needs.