To review: Medicare Part D helps pay for the prescription drugs you use, but enrollment is not automatic. You decide whether to enroll in a Medicare Part D plan.
Prescription drug coverage is an insurance plan you buy from private companies. You can buy a separate plan just for drugs, called a prescription drug plan (PDP). Or you can buy a Medicare Advantage (Part C) plan that includes drug coverage.
Medicare Part D coverage limits
Medicare Part D coverage has different levels of cost sharing until you have spent a certain amount out-of-pocket in a single year for the covered drugs you take. In 2012, this amount is $4,700.
Your out-of-pocket costs include the amount you pay or others pay on your behalf toward the cost of your prescription drugs, including
deductible,
copays,
coinsurance and payments made in the
coverage gap.
Premiums do not count toward out-of-pocket costs.
Once you have passed this spending cap, you are eligible for what Medicare Part D calls "catastrophic coverage." You pay only a small coinsurance or copay for a covered drug, and your plan pays the rest for the remainder of the year. The terms of these plans vary. Look at the details of each plan to see limits on coverage.
What won’t you get help with?
Plans vary by which specific drugs they cover, and you won’t get help with the cost of a drug that is not covered by a plan. For example, a plan may cover only certain cholesterol-reducing drugs. If the specific cholesterol-reducing drug you take isn’t covered by a plan, the plan won’t help you with the cost of that drug. However, that plan may cover a similar drug that can be substituted for your specific drug.
The federal government also requires plans to exclude certain types of drugs from the plan entirely. Weight-loss drugs are one example. Some plans, called "enhanced plans," will cover some of these types of drugs.
In most plans, there is a stage of
cost sharing called the "
coverage gap," or the "donut hole." In this stage you must pay most of the plan’s price for the medications you take.