Medicare Part D

Medicare Part D is prescription drug coverage that began in 2006. Medicare Part D provides Medicare beneficiaries with coverage for their prescription medications you obtain from a pharmacy. Medicare Part D is a voluntary program and it gives you access to your medications at a more affordable rate. Unlike Original Medicare, you do not enroll in Medicare Part D through Social Security. You will choose a Medicare Part D prescription drug plan offered by a private insurance company in New Jersey.

If Medicare is your primary coverage, you should enroll in a Medicare Part D prescription drug plan when you first become eligible at age 65. If you do not enroll in Medicare Part D when you are first eligible, you could face a late enrollment penalty that is added to your monthly premium. Some people may opt to delay enrollment into Part D until they retire. You can delay your enrollment without penalty, as long as the employer insurance coverage is considered ‘good’ or ‘better than’ Medicare Part D.

The monthly premiums for Medicare Part D vary depending on the plan you choose. Each insurance company sets their own rates, prescription tiers, and formulary (the list of medications they cover). Keep in mind that the cheapest Medicare Part D drug plan in New Jersey, may not always be the best one for you. It’s important to review the plan formulary to see if your medications are covered. If you enroll in the cheapest Part D plan without checking the plan’s formulary, you may later learn that the plan does not cover one of your prescriptions.

Some people with higher incomes may have to be pay more their Medicare Part D plan. If you earned more than $91,000 filing individually or $182,000 filing jointly, then Medicare will also require you to pay extra for your Part D coverage. This is called the Income Monthly Adjusted Amount, or IRMAA.

All prescription drug plans have four stages, and Medicare sets the threshold for each stage every year.

The first stage is the Medicare Part D deductible. In 2022, this deductible is $480. This means that each insurance company can require up to a $480 deductible to be paid up front before your benefits kick-in. The insurance company may also charge a lower deductible. No plan can charge a higher deductible than what Medicare allows for that year.

Most Medicare Part D prescription drug plans have 5 tiers for their medications on their formularies. Usually, a Tier 1 medication is known as a ‘preferred generic’ drug. Tier 2 would be a ‘non-preferred generic’ and Tier 3 begins the brand drug classification. The insurance company sets the copay amount (or the amount you may when you pick up your medication) for each tier. For example, one company may charge $2 for a copay on preferred generic drugs (Tier 1), while another company may charge $5. Working with an insurance agent at Seniorstar can help you review your medications to ensure they’re covered by your current plan, and to make sure you’re not paying too much for your medication.

Extra Help is a program that offers help with paying for Medicare Part D prescription drug plan expenses (if you qualify). This is known as Low-Income Subsidy, or LIS. Anyone can apply for this through their local Social Security office, or online at ssa.gov, but help is awarded based on proving low-income and limited resources. You must have an annual income that falls below 150% of the FPL (federal poverty level) in order to qualify for Extra Help.

People who qualify will receive help paying their monthly Part D premiums, their annual Part D deductible, and also their copays for their prescription medications.

There are different levels of Extra Help you can qualify for. The subsidy level generally determines how much assistance you will receive towards your monthly premiums. Some people may qualify for a full subsidy and have all of their monthly Part D premium paid up to the benchmark allowed by Medicare for that year.

If you are in your initial enrollment period, have moved, retired or have another qualifying life event, Jamie Sholom can help you review your Medicare Part D plan options. Seniorstar Insurance is here to help Middlesex county residents find a health insurance plan that is right for them.