How Prescription Drug Plans Work

Prescription drugs for many are vital in maintaining or improving health, but they can be prohibitively expensive, especially for those with a chronic illness – which is why having coverage is so important. There are two ways to get Medicare Prescription Drug coverage. You can join Medicare Part D or you can join a Medicare Advantage Plan that offers drug coverage. Whatever plan you choose, Medicare drug coverage can help you pay for brand-name and/or generic drugs at pharmacies convenient for you.

Medicare Part D prescription drug coverage is available from private insurance companies to those also eligible for Original Medicare and who permanently reside in the service area of a Medicare Prescription Drug Plan. There are different types of plans available from the various insurers with premiums and out-of-pocket expenses varying accordingly.

Medicare Part D Coverage Typically Works As Follows:

  • If the plan has a deductible, you pay the full amount of your prescription drug purchases until the deductible is met.
  • After the deductible is satisfied, you will pay a share of the costs according to the terms of your plan. Your share, which you typically pay to the pharmacy at the time of pickup, could be a flat amount (copayment) or a percentage of the total amount (coinsurance).
  • Once you have paid a certain annual maximum amount out of your own pocket for prescription drugs, you automatically get “catastrophic coverage.” This means for the rest of that particular year, you would only pay a small copayment or coinsurance amount for prescription drugs.

Of course, specific coverage varies from one plan to the next, which is why it’s important to work with specialists that can assist you in determining which to choose. Omaha Insurance Solutions can help you evaluate the plans offered by nationally recognized companies to make an informed decision about this critical component of your healthcare program.

The “Donut Hole” in Prescription Drug Plans

It’s also important to note that most Medicare drug plans have a coverage gap (also called the “donut hole”). After your Part D coverage has paid a certain amount for prescription drugs, you may have to pay all costs yourself, up to a yearly limit. Under the Affordable Care Act, the coverage gap will be reduced over several years to make prescription drugs more affordable. There will be additional savings in the coverage gap each year through 2020, when the coverage gap is closed completely. We can explain this to you in more detail as well.

Everyone Is Unique.

The right Medicare plan is the one with which you’re most comfortable. We’ll help you make this important choice by reviewing all the details of each plan with you. To speak with a licensed independent agent, give us a call at Omaha Insurance Solutions at 402-614-3389 TTY 711.