Medicare Part D Prescription Drug Coverage Explained

What is Medicare Part D?

Medicare Part D, also called prescription drug coverage, is offered through Medicare-approved private insurance companies. You can receive Part D coverage through a prescription drug plan (PDP) or by including it in a Medicare Advantage prescription drug plan (MAPD).

What does Medicare Part D (prescription drug coverage) cover?

Part D helps cover brand-name, generic, and specialty medications. Prescription coverage varies by plan; each plan has a list of drugs that are covered by that plan, known as a formulary.

How much does Medicare Part D cost?

Your costs when enrolled in a Part D plan include:

• Your Part D plan monthly premium, if applicable.
• Any out-of-pocket costs such as copays, coinsurance, and deductibles included with the prescription drug plan that you choose.
• A late enrollment penalty (this only applies if you have a period of 63 days without Part D coverage).

Stages of prescription drug coverage

Your Part D coverage changes throughout the year as your spending increases. Each covered drug belongs to a tier which determines how much you will pay.

Deductible Stage
UPMC for Life does not have a deductible for prescription drugs. If your plan does have a deductible, you will pay the full price for your drugs until you meet your Part D deductible.

Initial Coverage Stage
You pay: A copay or coinsurance, depending on the drug tier.
Costs that apply in this stage: When your total cost (the amount both you and the plan pay added together) reach $4,020, you move to the Coverage Gap Stage.

Coverage Gap Stage
You pay: 25 percent of the total cost for your medications (plus a portion of the dispensing fees for brand-name drugs).
Costs that apply in this stage: Your out-of-pocket costs for generic drugs. Your out-of-pocket costs plus 70 percent of the total cost for brand-name drugs.
Costs that apply to the Catastrophic Coverage Stage: The costs that apply in this stage plus your total out-of-pocket costs from the Initial Coverage Stage. Once these costs reach $6,350, you leave the Coverage Gap Stage. This applies to all prescription drug plans.

Catastrophic Coverage Stage
You pay: 5% percent of the cost for each of your drugs or $3.60 for generics and $8.95 for brand-name (whichever is greater) for the remainder of the year.

Am I eligible for Medicare Part D?

You must have Original Medicare Parts A and B to join a Part D plan.

How do I get Medicare Part D?

• You can join a standalone Part D prescription drug plan. You can have a standalone Part D plan in addition to Original Medicare or a Medicare Supplement plan.
• Most Medicare Advantage plans offer Part D prescription drug coverage included. If you have a Medicare Advantage plan you cannot also join a separate standalone Part D plan.