Medicare Part D is the third type of coverage offered by Medicare. The first type of coverage is hospital insurance (Part A). The second type of coverage is medical insurance (Part B) and the third type of coverage is prescription insurance (Part D).
Part D is not administered by Medicare. Medicare drug plans are provided by private insurance companies. These companies must receive approval from Medicare before they can offer insurance.
You are eligible for Medicare D as soon as you are eligible for Part A. It is optional insurance. You can choose not to have it. There is incentive for you to get a Part D plan as soon as you are eligible. If you delay getting coverage, you will be paying a penalty and have higher premiums than you would otherwise have.
When comparing Medicare drug plans, you need to look at the premium, the deductible and co-pays. These all affect your out-of-pocket costs. You will pay a monthly premium in addition to the Part B monthly premium. The deductible is the amount of money you have to pay before any benefit starts. The co-pay is the portion of cost of the medication you pay when benefits start.
Another point of comparison is the drug formulary. If you are already taking certain medications, be sure to check the drug formulary. The formulary is the list of drugs for which the insurance company is willing to pay. If the drug is not on the formulary, you will have to pay for it.
All Medicare Part D drug plans are subjected to the same benefit limit. The benefit limit is the maximum amount of money that a plan must pay our for your medication. Once you reach this limit, you are on your own. You will be paying the full cost of your medication.
There is still some upside protection for you. When your total out-of-pocket expense reaches another limit, a catastrophic coverage benefit kicks in and the insurance start picking up most of the cost of the medication.