Medicare Part D

"Are you a Medicare Part D beneficiary struggling to afford your prescription drugs? Don't let the high costs of medication impact your health and quality of life. Explore your options and resources available to help you save on prescription drugs and get the care you need."

Medicare Part D is a federal program that provides prescription drug coverage to Medicare beneficiaries. It was created as part of the Medicare Modernization Act of 2003 and became available to beneficiaries in 2006. Part D is optional and is offered by private insurance companies that contract with Medicare.

Beneficiaries can choose to enroll in a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage. The plans vary in terms of the drugs covered, copayments, and monthly premiums.

The program is designed to help beneficiaries pay for the cost of prescription drugs and reduce the financial burden of high drug costs. Part D works by requiring beneficiaries to pay a monthly premium, a yearly deductible, and copayments for each prescription. The amount that a beneficiary pays for each drug depends on which tier the drug is in, with more expensive drugs requiring higher copayments.

Part D Premium

The Medicare Part D premium is the monthly fee that a beneficiary pays to enroll in a Medicare Part D prescription drug plan. The premium varies depending on the specific plan chosen, the geographic location of the beneficiary, and whether the beneficiary receives any additional assistance with their prescription drug costs.

Each year, private insurance companies that offer Part D plans submit bids to the Centers for Medicare & Medicaid Services (CMS) to provide coverage for the upcoming year. CMS then evaluates the bids and sets the national average monthly bid amount. Beneficiaries pay a portion of this amount as their monthly Part D premium.

It's important for beneficiaries to compare different Part D plans in their area to find the plan that best meets their needs at the lowest possible cost. Additionally, beneficiaries who have limited income and resources may qualify for additional assistance paying for their Part D premiums through programs such as Extra Help or Medicaid.

Medicare Part D penalty

The Medicare Part D late enrollment penalty is a fee that may be charged to Medicare beneficiaries who do not enroll in a Part D prescription drug plan when they are first eligible and do not have creditable prescription drug coverage (i.e., coverage that is at least as good as standard Medicare drug coverage) for 63 or more days in a row.

The penalty is added to the individual's Part D premium for as long as they remain enrolled in a Part D plan. The penalty amount can vary based on the length of time the individual was without creditable coverage and not enrolled in a Part D plan, and the penalty can be significant over time.

The penalty is calculated as 1% of the national base beneficiary premium for each full month that the individual was eligible for Part D but did not enroll in a plan or have creditable coverage. The national base beneficiary premium is set by the Centers for Medicare & Medicaid Services (CMS) each year and is currently ($32.74 in 2023)

It's important to note that not all individuals are subject to the Part D late enrollment penalty. For example, individuals who have creditable prescription drug coverage through an employer or union plan may not face a penalty if they enroll in Part D when they lose their creditable coverage. Additionally, individuals who qualify for extra help paying for their prescription drug costs through the Low-Income Subsidy (LIS) program do not pay the Part D late enrollment penalty.