Healthcare Educators


Paying for Prescription Drugs Under Medicare

by | Aug 24, 2017

Prescription drugs costs are high and rising in the United States. Budgeting for prescriptions is an essential part of any retirement plan. Under Medicare, beneficiaries have several options for paying for prescriptions.

Medicare Part D

Medicare Part D provides coverage for prescription drugs. You can enroll during your initial enrollment period or during the annual election periods. However, late enrollment will be penalized with higher premiums if you did not have another source of accepted prescription drug coverage at the time.

Medicare Part D is used with Medicare Part A and Part B, sometimes called Original Medicare. When you enroll in Medicare Part D, you select a plan using the Medicare Plan Finder. Costs vary from plan to plan, so it’s important to consider your options carefully.

Employer Plan

If you have coverage through an employer plan, you will likely be able to retain this instead of enrolling in Medicare Part D and without facing a penalty. Make sure your employer plan meets the minimum requirements. Once employment or coverage ends, you will need to enroll in Medicare Part D to avoid a late penalty.

The Donut Hole

The so-called “donut hole” refers to a gap in prescription coverage under Medicare Part D. Beneficiaries are in the donut hole after they reach their coverage limit and before they reach their out-of-pocket limit. During this time, they pay a higher amount for prescription drugs.

Extra Help

Based on income and assets, some people qualify for Extra Help, or low-income subsidies. Receiving Extra Help keeps your generic and brand name prescription costs low. If you think you qualify, you can apply online. Additionally, some people will automatically qualify based on having full Medicaid coverage, participating in a Medicare Savings Program or receiving Supplemental Security Income.

Medicare Advantage

Medicare Advantage plans, sometimes called Medicare Part C, provide the benefits otherwise covered through Medicare Part A and Part B. Medicare Advantage plans can also provide other benefits, typically including prescription drug coverage.

Medicare Advantage plans are offered through private companies that contract with Medicare. If you currently have Original Medicare, you can switch to a Medicare Advantage plan during the annual enrollment period.

In addition to selecting a plan that helps you keep your prescription drug costs down, you may be able to manage your expenses in other ways. For example, talk to your doctor about generic options when they are available. Depending on your plan and the drug in question, you may also receive a discount for using a mail order service for your prescriptions. Have questions about how to choose the right Medicare plan? PTT Financial has answers!  Contact us for free assistance.