Understanding Medicare Prescription Coverage

If you’re among the 59 million Americans on Medicare – 18 percent of the population and growing – you’re probably well aware of the Medicare prescription coverage gap, often called the “doughnut hole.”

With 2019 just weeks away, fall is the time to plan your Medicare coverage, as certain rules change for the coming year. The good news is that Congress passed a bipartisan prescription drug coverage deal in February, so you should spend less on drugs in 2019.

Open enrollment began October 15 and you’ll want to compare your Medicare Part D prescription drug coverage options to make sure you’re in the plan that works best for your needs. For 2019, open enrollment runs from Oct. 15, 2018 to Dec. 7, 2018. During this period, you can make changes to various aspects of your coverage.

What Is the Coverage Gap?

First, not every Medicare beneficiary enters the coverage gap. It begins after you and your prescription drug plan have spent a certain amount for covered drugs. For 2018, that level is $3,750. For 2019, the level is $3,820 and ends when you spend $5,100 out-of-pocket for drugs.

The coverage gap has been shrinking for since the Affordable Care Act (ACA) was enacted in 2010. The Bipartisan Budget Act of 2018 accelerates closure of the gap for brand-name prescription drugs in 2019. Medicare beneficiaries will pay 25 percent of drug costs in 2019, down from the previously scheduled 30 percent.

For generic drugs, the coverage gap won’t reduce in 2019. Medicare beneficiaries will pay 37 percent of the price of generics. It’s important to do the math before deciding brand name or generic, because paying 37 percent of a generic is likely to be lower than paying 25 percent of a brand drug.

What Counts Toward the Coverage Gap?

These count:

  • Your yearly deductible, coinsurance and copayments
  • The discount you get on brand-name drugs in the coverage gap
  • What you actually pay for drugs in the coverage gap

These don’t count:

  • The drug plan premium
  • Pharmacy dispensing fee
  • Your costs for drugs not covered under the plan

The Advantage of Part D Coverage

Unlike Medicare Parts A and B, which are automatic when you reach age 65, you must enroll in Medicare Part D if you want prescription drug coverage.

As you age, it’s quite likely your need for prescription drugs will increase. In fact, 55 percent of Americans of all ages are on prescription medicine, with an average of four prescriptions each.

Medicare Part D is a prescription drug insurance policy you buy from Medicare-approved private insurance companies. If you prefer, you can purchase a Medicare Advantage Plan that includes drug coverage and more.

Such plans may help lower your current costs for prescription drugs and may help protect against higher future costs. You also may realize savings once you reach the prescription drug coverage gap.

Streamline Your Search

If you’re ready to explore your options for improved Medicare coverage for 2019, SelectQuote Senior offers an easy, no-obligation way to help you find the plan that works best for you. SelectQuote agents shop dozens of insurance companies for you to compare rates and benefits. You are always in charge of your decisions and you pay no up-front fees.

Take some time to explore your options and make sure you have the Medicare coverage you need.

 

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