Your prescription drug coverage is not covered by Original Medicare nor is it covered by a Supplement Insurance Plan. You’ll need to pair your healthcare coverage with prescription drug coverage in the form of an Advantage Plan or with a Part D Prescription Drug plan.
Drugs Costs Vary Differently Throughout the Year
How your prescription drugs are covered is one of the more confusing pieces of a Medicare plan. Your drugs will cost differently depending on how much money you’ve already contributed towards your prescription drug costs.
Here are the 4 common elements of a Part D Prescription Drug Plan:
1 – Prescription Drugs Deductible
First step is the prescription drug deductible. This drug deductible is separate from your Part B deductible. You are responsible for all of your drug costs until you reach your deductible. Many drug plans do not have a deductible so you skip to the 2nd stage of your coverage: The Initial coverage period.
2 – The Initial Coverage Period
During this initial coverage period, you’ll pay a co-pay or a co-insurance and the insurance carrier pays the rest of your costs. During this initial coverage period your portion of the cost is minimal. The initial coverage period amount changes each year. In 2021, you stay in this stage until your total drug costs have reached $4,130. After you reach that amount, you enter the Coverage Gap also called the “Donut Hole”
3 – The Coverage Gap or “The Donut Hole”
When you’re in the coverage gap, you’ll pay up to 25% of the costs of brand-name prescription drugs and up to 25% of the price of generic drugs. This is going to be more expensive than when you were in the initial coverage period. You enter the “Donut Hole” when your total drug costs have reached $4,130 and exit when you’ve reached your yearly out-of-pocket threshold. In 2021, the out-of-pocket threshold is $6,550 and will also change each year. After you’ve paid through to your threshold, you have reached your final plan stage: catastrophic coverage.
4 – Catastrophic Coverage
With Catastrophic Medicare Prescription Coverage, you will now just pay a small co-payment or co-insurance for any of your covered prescriptions for the rest of the year. This amount will be the least expensive your drugs will cost you all year long. Your drug costs will increase when you’ve exited the Initial Coverage Period and entered the “Donut Hole”. However your costs will then be reduced when you enter the final stage of your coverage: the Catastrophic Coverage period.
Keaton Marks is the owner and CEO at HealthyMarks including the medicare team. Keaton was born and raised in Encinitas. He often rode his bike through town and to the local beaches like Moonlight. Keaton knows it is important to have a local resource, someone who understands the area, the hospitals and networks of doctors. Keaton is proud to be a local Medicare broker who is able to assist the people in his town when selecting medicare plans.
Keaton believes one thing above all else: “Medicare is confusing… but it doesn’t have to be! That is where HealthyMarks Medicare comes in” Please contact me with any questions.