Prescription Drug Plans

In 2006 Prescription Drug plans, known as Part D, were first introduced.  These offer seniors the opportunity to get their prescription medications at a much lower cost than they otherwise would have paid.  These RX plans are offered through insurance companies and must meet the minimum standard set by the Federal government.   Plans vary from one company to the next.  There will be different deductibles, co-pays, drug lists and monthly premiums.  It is important that you review your plan each fall to determine if any of the changes made for the upcoming year will affect you.  You can make changes from October 15- December 7 and will go into effect in January of the following year.

When do I need to sign up for Part D?

If you are about to turn 65 you can sign-up for Part D 3 months before and until 3 month after you turn 65 years old. If you are over 65 years old and are just now applying for Medicare Part B you have 63 days after the Part B effective date to get your Part D.  If you are over 65 and already have Part D you can make changes once a year during the Annual Coordinated Election Period (Oct15- Dec 7).

I don’t take any medications or just generics, do I need a Part D?

If you don’t sign up when you are first eligible there is a penalty of 1% for each month you were eligible and didn’t sign up.  This penalty will follow you all the days of your life!  Even if you don’t take prescription medications now you may need to in the future.  There are low cost plans that will give you protection from penalties and peace of mind about the unknowns!

When Can I Make Changes to My Plan?

Once you have a plan you can only make changes  during the Annual Coordinated Election Period (Oct 15- Dec 7); these changes go into effect the following January.  If you don’t take the time to review your current plan’s changes for the following year you may have an unpleasant surprise in January-and it will be too late to make changes.  I strongly urge you to do an annual review.  We will help you with this if you would like us to!

There are special exceptions that allow for making changes to your Part D. If you move out of the plans coverage area, you become eligible for Medicaid,  or you loose coverage from a union or employer group, these are just some of the situations that would allow you to make changes in the middle of a plan year.

Stages of Part D

There are four stages to the Part D drug plan: Deductible, Initial Coverage Period, Coverage Gap, and Catastrophic Period.  The following information will help you get a good understanding of how the drug plan works.

  • Deductible The national deductible for 2011 is $310, although, many plans have no deductible or much lower deductibles.  This means you pay amount this first before the plan will begin paying for medications.
  • Initial Coverage Period This period starts right after the deductible is paid.  and continues until you have received a total of $2, 840 worth of prescriptions. You will pay a co-pay for the medications you need.  This figure is derived from what you paid in copays and what the insurance company paid toward filling your prescriptions.
  • Coverage Gap This is the time period that begins after you have reached the $2,840 of coverage and continues until you have reached the True Out Of Pocket cost of $4,550.  This is often call the donut hole and while in the coverage gap you pay 50% of your prescriptions and the drug companies cover the remaining 50%.
  • Catastropic Coverage Period This time period begins after you have completed the coverage gap and continues for the rest of the year.  At this time pay about 5% of your drug costs and the plan pays 97%.


Co-pays are paid during the Initial Coverage Period and set up in 3 or 4 tiers depending on your plans schedule.

  • Tier 1 Generics
  • Tier 2 Preferred Brands
  • Tier 3 Non-Preferred Brands
  • Tier 4 Specialty drugs

Generics have the lowest co-pays and the amount you pay ranges from $4 -10 depending on the plan you have selected.  Preferred Brands can range from $25-45; and Non-preferred Brands can range from $45-95 and the Specialty drugs range from 25%- 33% of the full price.

There are ways to control your prescription drug costs.  The most effect cost saving step would begin in the doctor’s office.  Have a conversation with your doctor about switching to the lower priced generics if one is available and would be tolerated well by you.

If you use the website you will be able to get a side-by-side comparison of plans that would best suit you.  If you need help with these reports call us.  We are here to help you!

Leave A Reply (No comments so far)

No comments yet

Choose a Category