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Prescription Drug Coverage in Medicare — Part B and D

Published February 2, 2022

Medicare coverage for prescription drugs is relatively new. Drugs were not covered until January 1, 2006. The good news is that if you are eligible for Medicare, you are eligible to buy coverage for prescription drugs at a reduced price. With the cost of drugs going up every year, and a penalty if you don’t enroll in the program when you turn 65, it makes sense to check out what is available to you in your area when you are first eligible for Medicare.

There are two ways drugs are covered by Medicare. Some drugs are covered by Part B of Medicare, while others are covered by the Part D program. Part B, which is generally your Medicare insurance for physician services and outpatient care, covers drugs that are typically administered in a doctor’s office, oral cancer drugs, or drugs that require some type of equipment like a nebulizer or external infusion pump. Part D, the standalone prescription drug program, covers most drugs you would get from a pharmacy for chronic conditions like high blood pressure or diabetes. To make it a little more confusing, Part B covers flu shots but Part D covers other vaccines like shingles. Since your provider usually knows what drugs Part B will cover, you don’t usually have to worry about the coverage if you are enrolled in a Part B plan.

Part D is the standalone prescription drug plan that most people choose once they are eligible for Medicare. There is a penalty for each year you do not enroll in Part D after you become eligible for Medicare -- the three months before you turn 65, the month you join, and three months after you join. After that period, if you did not have drug coverage through a “creditable” source, there will be a penalty every month you do not enroll.

Even if you don’t take any drugs on a regular basis now or think you won’t in the future, it’s worth checking out one of the Part D plans to find out what your costs might be. Medicare provides a handy guide for figuring this all out. All you need to do is put in your zip code and the drugs you use now, and Medicare provides you a list of pharmacies and plans in your area, and what your costs might be on a monthly or annual basis.

Let’s take an example of a newly enrolled person in Medicare at age 65. Susan is generally healthy but she does have high blood pressure and takes a drug for that each month. If Susan lives in Omaha, Nebraska, she can go to the Medicare Part D site and insert her zip code of 68007, her County, the name of her prescription drug and its dosage, and she can see all the plans available in her area and the pharmacies that serve that plan. The Medicare website will even save the information you put in, in case you want to come back and add drugs or change dosages later on.

Since you can change your Part D plan every year, once you are enrolled, it makes sense to go online during the open enrollment period of October 15 to December 7 and see whether your plan still covers your specific drug and what the costs will be next year for that drug in that plan. Medicare makes it easy to change plans and there is no penalty for doing that. Starting in January 2021, Medicare is offering financial help with the costs of insulin. In the next Open Enrollment period, which starts October 7, 2021, you can check whether your Part D plan offers help with the cost of insulin. And if you are eligible for “Extra Help” from Medicare, a program that helps low income seniors pay deductibles, coinsurance and Part D costs, your drug costs may be even lower or completely covered.

If you are enrolled in a Medicare Part C, Medicare Advantage plan, you probably already receive prescription drug coverage as part of your benefits. But not every Medicare Advantage plan offers drug coverage, so it is important to check that out when you first enroll in a Part C plan.

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