About Medicare Part D

What is Medicare Part D and how does it work?

First off For you to be eligible for Medicare Part D coverage in Georgia (or anywhere else), you need to enroll in Medicare Part A and Part B.

Part D is the easiest remember because D stands for DRUGS! 🙂

Part D is not PROVIDED by Medicare but is REQUIRED by Medicare. Meaning, you have to obtain drug coverage or you will get penalized.

Part D is insurance you obtain through an Insurance Company (Aetna, Humana, Wellcare, Cigna, etc). A broker like myself matches you with the right plan based on your drugs. (or you can attempt to match yourself at medicare.gov)

Drug plans are either:

A- Purchased as a stand alone policy for drugs only OR
B- Packaged into your overall coverage for certain plan types (similar to the work policies where drugs are part of the coverage)

This depends on which overall Medicare Plan type you choose. (I’ll point you in the right direction based on your situation)

Your Georgia Medicare Part D Prescription Coverage – Who Pays What?

Medicare prescription coverage comes in four stages.

Annual Deductible

Many plans have a deductible. For 2024 it is $540. However, your basic drugs are Exempt from this. Lisinopril, Atorvastatin, etc. Your basic maintenance drugs that are Tier 1, Tier 2 drugs are exempt from the deductible in most cases.

You pay into this deductible for drugs that are on Tier 3 or higher (these are fancier, more specialized drugs).

Initial Coverage

Initial Coverage enables you to pay a fraction of your prescription medication costs based on your Medicare plan. The prescription drugs you get are tiered based on their type, brand names, and other specialized criteria.

As of 2024, the maximum Initial Coverage costs you can pay before you move on to the next phase called Coverage Gap (aka Donut Hole) is $5,030.

Coverage Gap

The coverage gap allows you to get medication at better discount rates in comparison to Initial Coverage until you have spent a total of $6,550 out of your pocket as of 2021 as per the United States Medicare regulations.

Catastrophic Coverage

In 2024, once Part D enrollees without low-income subsidies (LIS) have drug spending high enough to qualify for catastrophic coverage, they will no longer be required to pay 5% of their drug costs, which in effect means that out-of-pocket spending for Part D enrollees will be capped. In 2024, the catastrophic threshold will be set at $8,000. This amount includes what Part D enrollees spend out of pocket plus the value of the manufacturer price discount on brands in the coverage gap phase.

How Is the Medicare Part D Benefit Changing in 2025?

Changes in 2025 include a new $2,000 out-of-pocket spending cap, elimination of the coverage gap phase, a higher share of drug costs paid by Part D plans in the catastrophic phase, along with a new manufacturer price discount and reduced liability for Medicare in this phase, and changes to plan costs and the manufacturer price discount in the initial coverage phase.

Out-of-pocket drug spending will be capped at $2,000

Beginning in 2025, Part D enrollees’ out-of-pocket drug costs will be capped at $2,000. This amount will be indexed to rise each year after 2025 at the rate of growth in per capita Part D costs. (This cap does not apply to out-of-pocket spending on Part B drugs.)

Here is a page where you can dig into even more specifics if you like https://www.kff.org/medicare/issue-brief/changes-to-medicare-part-d-in-2024-and-2025-under-the-inflation-reduction-act-and-how-enrollees-will-benefit/

Getting the best Medicare Part D Coverage

To find the best Medicare Prescription Drug plan, contact me and I’ll use my software and experience to match you with the plan that works best for you.

Ready to get started?