Medicare Part D
Medicare Part D is an optional plan you may add to Original Medicare and provides prescription drug coverage. Let’s start by taking a closer look at what Part D is and how it works.
What is Medicare Part D
For all Part D providers, you will have a few specific plans to choose from. These plans, or formularies, provide drugs that are organized into five individual tiers. These tiers are:
- Tier 1: Low Copayment, Covers Preferred Generic Prescription Drugs
- Tier 2: Slightly Higher Copayment, Covers Generic Drugs
- Tier 3: A Bit Higher Copayment, Covers Preferred Brand Name Drugs
- Tier 4: Higher Copayment, Covers Non-Preferred Drugs
- Tier 5: Highest Copayment, Covers Specialty Drugs
How Does Medicare Part D Work
These are likely completely unfamiliar terms, but they are easy to understand. A copayment is a fixed amount you pay for a covered health care service after you’ve paid your yearly deductible. For example, you may have to pay $20 out-of-pocket for a certain drug. Each tier requires a certain copayment depending on the required drug.
The type of drug will determine your required copayment. Generic prescriptions are the least expensive and most common drugs. In general, this refers to commonly prescribed drugs, i.e., something your doctor will have to approve before receiving. You will typically pay around $1 to $3 for drugs in this tier.
Tier 2 covers generic drugs, i.e., drugs similar to tier one but a bit more expensive at $7 to $11 for drugs in this tier. Tier 3 covers Preferred Drugs, i.e., brand name drugs without a generic equivalent, but still costing less than non-preferred brand name drugs. You will pay around $38 to $42 for drugs in this tier.
Tier 4 enters the higher cost-range of prescription drug options. In most cases, your doctor will prescribe you a lower-cost alternative unless one is not available or you have a specific need. It covers Non-Preferred Drugs, i.e., higher-cost drugs that don’t fall within the lower-cost categories. You will pay around 45% to 50% of the drug cost in this tier.
Tier 5 has the highest copayment of all of the tiers. It covers Non-Preferred Drugs, i.e., higher-cost drugs that don’t fall within the lower-cost categories. You will pay around 45% to 50% of the drug cost in this tier.
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Do you need help finding the right Part D plan for you? We’re here to help—with all of your Medicare questions, call World Financial Solutions at 281-639-7787.