Does Medicare Part D Cover All Prescription Costs?

It’s no secret that prescription drugs can be really expensive—especially if you have a chronic illness. For those of you who are new to Medicare, prescription drug expenses don’t only include the cost of your prescriptions. There are insurance premiums, deductibles, co-pays and co-insurance that need to be added up to arrive at your true annual costs. I recommend that you get into the details, check the numbers and learn how much your prescription drugs and Part D plan will cost every year.

How Medicare Part D Works
During your initial enrollment period (usually at age 65), you will choose a Medicare-approved prescription drug plan. These plans charge a monthly premium and will help pay for prescription drugs based upon Medicare rules for cost sharing.

A Medicare Part D prescription drug plan is only going to pay for a portion of the costs. The remaining costs are shared with you via deductibles, co-insurance and co-payments. The costs are shared on three levels based upon the out-of-pocket costs you pay during the plan year (Even if you reached catastrophic coverage level this plan year, this total resets to $0 at the beginning of every plan year).

For Medicare Part D, enroll within your initial enrollment period. If you go for 63 continuous days without creditable prescription drug coverage, you face a 1% per month penalty for every month you were not enrolled in a Part D approved plan. For those who currently take few or no prescription drugs, understand the penalties if you don’t sign up for a plan during initial enrollment.

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