Medicare's Part D helps pay for the cost of brand-name and prescription drugs. This benefit is the most recent addition to the Medicare program, which has been providing general medical and hospitalization coverage to the elderly since the 1960s. Although anyone eligible for ordinary Medicare -- parts A and B -- is also eligible for Part D coverage, the program can pose some challenges in the enrollment process as well as deductibles and co-pay amounts.
Late Enrollment Penalty
Medicare offers an open enrollment period around your 65th birthday, when most people sign up. This applies to Part D prescription drug coverage as well. If you miss the enrollment window and apply later, for every month you're late Medicare adds a penalty of 1 percent of the national base monthly premium, which reached $33.13 in 2015. This penalty is added to your monthly Part D payment for as long as you're enrolled.
The Part D program excludes certain drugs, including those for weight gain, anorexia, erectile dysfunction, cold symptoms, fertility, and any vitamins or minerals, even with a doctor's prescription. Hair-growth treatments and anything used for cosmetic enhancement are also excluded. Medicare makes exceptions only for those drugs that meet these descriptions but are prescribed for additional medical conditions or illnesses, such as cancer or asthma. Medicare also requires all covered drugs to meet the Drug Efficacy Study Implementation standards under the authority of the Food and Drug Administration. This means that even if a drug is found to be safe, it may be excluded due to a determination by the FDA that it's not effective in the treatment of a medical condition.
The Coverage Gap
Medicare Part D plans may have a temporary break in coverage, known to many as the "donut hole." Once you reach a certain level of costs, your co-payments for covered brand-name and generic drugs rise. The coverage gap in 2015 began at $2,960 of total drug costs, which included both covered and deductible amounts. Once that level is reached, you pay 45 percent of the cost of brand-name drugs and 65 percent for the cost of generic drugs. On the bright side, 95 percent of total brand-name drug costs are applied to your "out-of-pocket" expenses. This boosts you towards the point at which the coverage gap will close. Some Medicare plans offer gap coverage, however, and keep the out-of-pocket percentage level more consistent.
Complexity and Comparative Benefits
Anyone considering Medicare Part D who already has prescription coverage under another plan must spend time evaluating, comparing and contrasting coverage options. Part D is offered through competing insurance companies, all of which have their own formularies, tiers and price structure. Although Medicare applies some cost standards, it's up to the consumer to investigate what each plan will cover, how much it will cost, and whether it measures up to a non-Medicare plan, such as employer-provided coverage, that offers an alternative. This can make enrollment in Part D a time-consuming and difficult decision.
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