Understanding Medicare Part D Plans
One of the most confusing aspects of Medicare is prescription drug coverage, or Medicare Part D.
Whether you’re considering Medicare Advantage plans with a prescription drug component or a stand-
alone Medicare Part D plan to go with your traditional Medicare Plan, it’s important that you understand
how Medicare Part D works.
What is Medicare Part D?
Medicare Part D is prescription drug coverage. You can get Part D coverage through a Medicare
Advantage plan or a stand-alone Part D plan.
How does Medicare Part D work?
The way Medicare drug coverage is structured, you’ll pay a portion of your drug expenses and your
plan will pay the rest, up to a certain point ($2,930 in 2012).
After the initial coverage limit is reached, the coverage gap, also
known as the donut hole, begins. Historically, people reaching the
donut hole have had to pay 100 percent of the cost of their
prescriptions until they reached what Medicare calls catastrophic
coverage. In 2012, when you’re in the donut hole you’ll get a 50
percent discount on brand-name and a 14 percent discount on
generic drugs until you reach catastrophic coverage. Catastrophic
coverage is reached when your out-of-pocket costs for the year
After you’ve reached catastrophic coverage, your plan will start
covering a portion of your drug expenses once more – this time
covering a much larger percentage of the cost (95 percent). Once
you reach catastrophic coverage, the donut hole ends for the rest
of the year, but you start all over again with each new year.
How do I choose Medicare Part D plan coverage?
Not all Medicare plans are created equal. There are several
things you should look for when selecting a Medicare plan that
includes prescription drug coverage, whether that coverage is offered by a Medicare Advantage plan or
a Medicare Part D plan:
1. Are my drugs covered?
2. Does the plan include restrictions that could prevent me from getting my prescriptions when I need
3. What will my annual prescription drug costs look like?
Allsup Medicare Advisor can help you answer all these questions and more. For more information on
how Allsup can help you navigate Medicare, call us at (866) 521-7655 or visit www.allsup.com.