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– Medicare Part D –

What are Medicare Part D Plans (Prescription Drug Plans)?

Medicare Part D, also called the Medicare prescription drug benefit, is an optional program to help Medicare beneficiaries pay for self-administered prescription drugs.

These plans are designed to lower costs and protect you against higher costs. Each plan that offers prescription drug coverage through Medicare Part D must give at least a standard level of coverage that is set by Medicare. Plans vary by their formulary and tiers on their formulary.

By purchasing a Medicare prescription drug plan through a private insurance company, these plans can help you drastically reduce out-of-pocket expenses at the pharmacy.

Each insurance company offering prescription drug plans is mandated by Medicare to cover specific prescriptions. Professionally administered prescriptions (infusion drugs) are covered under Medicare Part B.

Part D prescription drug plans can be purchased to compliment your Medicare Supplement (Medigap) plan or sometimes they are included with a Medicare Advantage plan.

Part D plans are based on a calendar year. All plans renew on December 31. You have an opportunity to change plans each year during the Medicare Annual Enrollment Period (October 15 – December 7).

 Who Qualifies for Medicare Part D?

In order to be eligible for a Medicare Part D (prescription drug plan), you must meet each of the following requirements:

  1. You must be enrolled in both Part A and Part B of Medicare
  2. You must be at least 65 years old or live in a state that allows Medigap coverage for people under 65 who have qualifying disability
  3. You must live in a state that sells the plan you are interested in purchasing.  Not all plans are available in every state. 

How much does Part D cost (prescription drug plans)?

Medicare Part D / prescription drug plan costs vary by provider.  It is important for you to pay attention to more than just the monthly premium cost.  How much you pay for each prescription will depend on the plan.  Usually you will have approximately 20 companies to choose from.  Average cost for 2022 Part D monthly premium is $33. Cost vary by plan, however, here is an outline of costs you should expect to pay:

  • Premium:  A premium is the amount of money you spend every month to have access to the plan.  The Federal government does not have restrictions on premium rates and pricing can change every year.  Plans with extended coverage will cost more than basic plans.  Average cost for 2022 Part D monthly premium is $33.
  • Annual Deductible – Stage 1:  During this stage, you pay 100% for the costs of your prescriptions until your reach your deductible.  Most plans have a $480 in 2022, some plans have a lower deductible or have a $0 deductible. 
  • Initial Coverage – Stage 2:  During this stage you will pay a copay or percentage of the drug costs when you fill your prescription.  This stage will last until you reach $4,430 (in 2022) in out-of-pocket expenses.  Copays are a percentage of the total cost of the prescription drug.  Based on your plan, you might pay 25% of the cost of your medication.  Percentages can also be higher for prescription drugs in higher tiers or for brand-name versus generic medications.  These amounts are set by your insurance provider.
  • Donut Hole or Coverage Gap – Stage 3:  Stage 3 is the Coverage Gap known as the Donut Hole.  You are responsible for paying 25% to 37% of the costs for both brand name and generic prescriptions.  You will stay in the donut hole until your costs reach $7,050 in 2022 On average, only 12% of beneficiaries hit the donut hole. Learn more:  The Donut Hole Explained! 
  • Catastrophic Coverage – Stage 4:  Once you reach catastrophic coverage, copays are typically lower than the Initial Coverage stage.  Member pays 5% or $3.95 (generic) and $9.85 (Brand-Name). You stay in this stage for the rest of the year. Only 5% of beneficiaries will hit the catastrophic phase.
  • Formulary:  Plans can vary the list of prescription drugs they cover (formulary) and how they place the drugs into different tiers on their formulary.  The formulary may not include a specific medication that you take.  If your doctor believes none of the drugs on your plan’s formulary will work for your condition, you can ask the plan to give you an exception and cover the drug.  The formulary determines the copay amount that you will pay for your prescription. 

Please keep in mind that your agent can only tell you the best priced plan for you based on the medications that you have been prescribed.  Brand names are always higher than generics.

Extra Help with Prescription Cost

Extra Help is a program offered by Medicare for people with low incomes and limited assets. This is also called Low Income Subsidy or LIS. But less than half of the people eligible for Extra Help actually sign up.  So, if you need help paying Part D premiums, deductibles and copays, submit an application.

What income counts? 

  • Wages
  • Earnings from self-employment
  • Social Security benefits
  • Railroad Retirement benefits
  • Veterans’ benefits
  • Pensions, annuities and alimony
  • Rental income
  • Worker’s compensation

What resources count?

  • Cash
  • Bank accounts
  • Stocks, bonds, or IRA or similar investments
  • Real estate other than your primary resident

How can I apply for Medicare Extra Help?

  1. Applying online at (Link to URL)
  2. Calling Social Security at 1-800-772-1213 and request an application be mailed to you or apply over the phone.
  3. Applying in person at your local Social Security office.

Part D Late Enrollment Penalty

When you first become eligible for Medicare, if you do not get a Part D plan, Medicare will charge you a penalty if you do not have creditable coverage through an employer or another group like the VA.  You have 63 days to get your Medicare Part D coverage.

If you don’t get coverage, you will have to pay the late enrollment penalty for every full month you delay. 

How is the Part D penalty calculated?

The penalty amount is 1% of the national average premium.  Multiple this by .01 and then multiply by the number that you did not have any creditable coverage.  This is then rounded to the nearest $.10 and added to the plan premium that you want to purchase.  This penalty can increase or decrease every year based on the national average premium. 

This penalty is for life, so try to avoid the Part D penalty by:

  • Purchasing a Part D plan when you are first eligible
  • Don’t go more than within 63 days without creditable coverage
  • Keep good records of your creditable coverage because Medicare will ask for proof of coverage from an employer or other group like the VA.  You can always appeal the penalty and you will need to prove you had coverage. 


Income-Related Monthly Adjustment Amount or IRMAA is a surcharge that high-income people will pay in addition to their monthly premium.  Social Security sets income brackets that determine your (or you and your spouse) IRMAA.

Determination is based on the income you reported on your IRS tax returns two years prior.  This is based on your modified adjusted gross income, meaning your adjusted gross income and other forms of tax-exempt income.

You will get a notice from Social Security if you have Medicare Part B or Medicare Part D.  IRMAA payments go directly to Medicare even if you pay monthly premiums to an insurance company.

How can I appeal IRMAA?

You have a right to appeal Income-Related Monthly Adjustment Amount – IRMAA if you believe it is incorrect or if you have had a life changing event:

  • Death of spouse
  • Marriage
  • Divorce or annulment
  • Work reduction
  • Work stoppage
  • Loss of income from income producing property
  • Loss or reduction of certain kinds of pension income

Appeals Process:  You must request a reconsideration of the initial determination from Social Security.  This can be done by calling Social Security at 800-772-1213 or by writing Social Security.  There is an appeal form SSA-44 titled Medicare Income-Related Monthly Adjustment Amount – Life Changing Event.  This form can be found on the Social Security web site.

SSA-44 Form – URL:

When can I enroll in Medicare Part D?

If you are enrolling in Part D for the first time, it is always best to enroll during you Initial Enrollment Period (IEP).  If you missed your enrollment for IEP, you will have to wait for another enrollment period.  Many people will enroll or change their plans during the Annual Enrollment Period (AEP).  During AEP, Medicare Beneficiaries can add, change, or drop their Part D plan.

  1. Initial Enrollment Period (IEP):   Medicare offers those who are turning 65 a 7-month period of time to enroll called the Initial Enrollment Period. Initial Enrollment begins three months prior to your 65th birthday and ends three months after you turn 65.  After you enroll in Original Medicare (Part A and Part B) and during your IEP, you can purchase a Medicare Supplement plan, a Medicare Advantage (Part C) plan or a Medicare prescription drug (Part D) plan.
  2. Annual Enrollment Period (AEP):  This is sometimes called Open Enrollment.  The Medicare Annual Enrollment Period is October 15 to December 7 every year. During AEP you can join, switch or drop a plan. For example, you can:
    • Enroll in a Medicare Advantage Plan (Part C) or Medicare prescription drug plan (Part D plan)
    • Switch to a different Medicare Advantage or Medicare prescription drug plan.
    • Drop a Medicare Advantage plan and go back to Original Medicare (Parts A and B). Then you could also apply for a Medicare Supplement plan.
    • Replace a Medicare Advantage plan with a standalone Medicare prescription drug plan.
    • If you don’t make any changes during AEP, your current plan will automatically renew the next year.
  3. Special Enrollment Periods (SEP):  The Special Enrollment Period lets you enroll in Original Medicare outside of your IEP due to certain life changing events. For example, you might wait to enroll if you’re still working. Timing depends on when the life changing event happens.  Examples include:
    • Loss of employment
    • Retirement
    • Move and your current plan will not cover you
  4. Qualify for Extra Help:   One time during each of these periods if you qualify for Extra Help: January–March, April–June, or July–September.
    • This includes people who have Medicare and Medicaid, belong to a Medicare Savings Program, get Supplemental Security Income (SSI) benefits, and those who apply and qualify.
    • If you make a change, it will take effect on the first day of the following month. You’ll have to wait for the next period to make another change.

When can I enroll in Medicare Part D?

Let our licensed Medicare insurance agents compare pricing for you.  We can compare over 25+ top-rated insurance companies at one time. 

Call us at 866-Medigap or 866-633-4427.  You can also use our “do it yourself” online application and click here to start comparing 2022 Part D plans in your area.

– Medicare Part D –

 Medicare Part D Questions & Answers

Who Qualifies for Medicare Part D?

Who Qualifies for Medicare Part D?

In order to be eligible for a Medicare Part D (prescription drug plan), you must meet each of the following requirements: You must be enrolled in Part A only. You did not need to...

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