Part D Prescription Drug Plans are CMS-approved plans offered through private health insurance companies. These plans are either found as a Stand-Alone Prescription Drug Plan or as a Medicare Advantage Prescription Drug Plan (MAPD). Part D Prescription Drug plans cover brand name and generic medications supplied by a pharmacy. Coverage varies by plan, and each plan has a formulary. A formulary is a list of the drugs covered by that plan.

The Costs Associated With Part D:

• The Part D Monthly Plan Premium.
• Out-of-Pocket Costs Like Deductibles & Co-Pays Outlined In The Plan. Along With The CMS Part D Coverage Stages.
• Any Late Penalty’s Incurred From Not Obtaining Part D Coverage When A Person Is First Eligible.

Understanding CMS Medicare Part D Coverage Stages:

• Annual Deductible: At this stage, prescriptions are paid by the beneficiary until the deductible is met. Not all Part D Plans have a deductible. If the plan does not have a deductible, the coverage starts with the first filled prescription.
• Initial Coverage: At this stage, the beneficiary pays a co-pay, and the plan pays the rest. This stage continues until the *Total Drug Costs reach the amount set by CMS for that calendar year.
• Coverage Gap (Donut Hole): In this stage, after the *Total Drug Costs reach the amount set by CMS for that calendar year, the co-pay becomes 25% of the costs for brand-name and generic drugs. This stage continues until the *Total Out-of-Pocket Costs reach the amount set by CMS for that calendar year.
• Catastrophic Coverage: In this stage, after the *Total Out-of-Pocket Costs reach the amount set by CMS, only a small copay or coinsurance is owed. This stage continues for the rest of the calendar year.

*Total Drug Costs: Equals the amount a beneficiary pays and what the plan pays for prescription drugs each calendar year. It does not include the plan premiums.

*Total Out-of-Pocket Costs: Equals the amount the beneficiary pays, including the deductible for prescription drugs each calendar year. The total out-of-pocket costs also include the discount paid by the drug manufacturers during this stage. It does not include the plan premiums.

*The Part D deductible and coverage gap do not apply when a person qualifies for Extra Help.