The good news is that when you’re eligible to enroll in Medicare, you’ll also be eligible to buy insurance that pays some of the costs of your prescription drugs — in many cases, most of the costs. But there are numerous caveats to Medicare drug coverage and important variations in coverage and costs among plans.
Original Medicare (parts A and B) does not cover prescription medication except in specific cases (drugs administered during surgery, for example). Beneficiaries with Original Medicare are eligible to buy prescription drug coverage, called Medicare Part D, which is sold and administered by private insurers.
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Most Medicare Advantage plans, on the other hand, include prescription drug coverage.
In both cases, Medicare Part D and Medicare Advantage, it is important to remember that specific drugs covered vary from plan to plan. So do monthly premiums and other costs. So it pays to inform yourself, shop carefully and reevaluate your plan choice each year.
What Medicare Part D plans cover
Medicare drug plans cover both generic and brand-name drugs. All plans cover certain categories of drugs to treat specific conditions. Each plan decides which specific drugs to insure per category.
Each Medicare Part D plan lists the drugs it covers in a formulary, which typically includes both brand-name and generic drugs. Formularies change, so it’s very important to check regularly that your medicines are included.
You should also check each plan for restrictions on drug coverage, such as requirements that certain drugs be approved in advance by the insurer.
If you or your provider believe none of the covered drugs will treat your condition adequately, you can apply for an exception.
What you’ll pay for prescriptions
In addition to Part D premiums, you may be responsible for cost-sharing, which can include deductibles, copays or coinsurance. Medicare Part D plans set their own premiums.
Part D plan deductibles vary from $0 to the maximum allowed, which in 2021 is $445 (rising to $480 in 2022). People with high incomes will pay an extra monthly charge of $12.30 to $77.10 for Part D in 2021.
Copayments or coinsurance
Nearly every Medicare Part D and Medicare Advantage plan with prescription drug coverage charges copays or coinsurance. Shop carefully; your costs will vary from plan to plan.
Part D coverage requires you to pay varied prices for different categories of drugs. In general, your cost-sharing will be higher for brand-name drugs.
Note that if you delay signing up for Part D for too long, you will owe a late-enrollment penalty.
How to compare Medicare Part D plans
Medicare.gov can help you find a Part D plan that covers your prescriptions and can help compare your costs in various Medicare Part D and Medicare Advantage plans.