Medicare Part D: Here’s What You Need to Know


Medicare Parts A & B cover most of the patient’s healthcare needs, but there is a notable gap in this coverage: prescription medications. For more than 40 years, patients with Medicare plans had to pay out-of-pocket for their prescriptions. However, this cost has become an increasing financial burden, especially with the rising costs of pharmaceutical products.

So, the federal government started a new program in 2006 known as Medicare Part D, which helps with the cost of prescription drugs. Part D is available through private insurance companies. If you want prescription coverage (and most patients do), it’s worth the extra monthly premium to pay for a Medicare Part D plan.

Is Medicare Part D Required?

No, you are not required to opt into Medicare Part D. You can choose to have only Medicare Part A and Part B. If you voluntarily choose to enroll in Medicare part D, it means that you have access to more affordable prices for retail prescription medications.

Additionally, this extra coverage is another layer of protection for patients. For example, if you are diagnosed with a condition requiring expensive medications for treatment, then Medicare Part D is critical to managing your spending and protecting your retirement savings.

How Medicare Part D Works

When your doctor writes a prescription, and you take it to the pharmacy, Medicare Part D has a negotiated price in place for the medication you are receiving. There are different tiers in pricing, depending on whether you receive name-brand or generic medications. Generic products are more affordable than their name-brand counterparts.

Cost Considerations for Medicare Part D

The monthly premium for Medicare Part D depends on the type of plan you choose and your location. Talk to your insurance broker for more information and assistance in selecting the ideal plan for your unique needs. These premiums vary based on the list of prescription drugs (known as the formulary) that the plan covers.

Another cost consideration is your income. Higher-income patients will pay more for the Income Monthly Adjusted Amount (ARMAA). This threshold is $85,000 per year for an individual or $170,000 per year for married filing jointly.

In addition to the monthly premiums, you might also have an annual deductible. So there is a certain amount you need to pay out-of-pocket before the insurance benefits kick in.

Need Help Choosing Medicare Coverage?

If you need assistance comparing your options for Medicare, reach out to us at Active Medicare Solutions. We have a variety of plans available and can help you personalize your coverage. Call us at (804) 874-6000.

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