Part D is complicated, but it is worthwhile for most to apply as they become eligible for Medicare. If you're eligible for Medicare, you qualify for the Medicare Part D Prescription Drug Benefit. It's that simple. For most people this means that if you're 65 or older - or are on Medicare and Medicaid because of qualifying disabilities - you're eligible for this benefit. Whether or not you choose to take advantage of this benefit is up to you. To enroll, you just sign up for one of these plans and signing up is as easy as a 20 minute phone call with almost any of the carriers.

Even if your prescription expenses are low, it may still make sense to enroll in Part D.  If you don't sign up shortly after you are first eligible, there is a 1% penalty (1% of the national average premium) for each month after your Initial Enrollment Period has expired that you wait to enroll.  For these reasons, we usually recommend that retired clients enroll when they reach age 65 if they do not have "creditable" drug coverage from an employer health plan. Creditable coverage is at least as good as the Part D minimum stated below. Your employer should be able to tell you if your plan is "creditable" or not.

In Georgia, about 30 plans are offered (not all offered throughout the state). Like the rest of the US, the majority of participants enroll in the top 5 plans. Plan features and premiums are set annually and generally change every year.  The national average weighted Part D premium for 2018 is $35.02.  In 2018, like prior years, there are a few plans in the $20/month premium range that are popular with enrollees who take few or no medications.

Since 2011, Part D premiums are "means tested" just like the Medicare Part B premiums.  The Modified Adjusted Gross Income calculation and the income thresholds are the same as Part B of Medicare. Each threshold level has an additional monthly premium amount that is added to Part D drug plan premium.  Here is the chart showing the 2018 premium "adjustment" (increase) for higher-income beneficiaries.

Note that drug plans are sometimes combined with Medicare Advantage plans (called MA -PD). It's important to be aware of the designated enrollment dates. The most important date to keep in mind is the Annual Election Period from Oct 15 – Dec 7.  Part D plans can be dropped, added or changed without limit and the last selection chosen before the end of the Annual Election Period will go into effect on January 1st.

Standard Coverage for Part D Plans:

(The minimum coverage drug plans must provide. Plans vary but must be at least this good. For example, there are some plans with a $0 deductible rather than the $405 deductible.  The minimum standards are changed annually by CMS)

Effective January 1, 2018, for covered drugs you will pay:

• A monthly premium (varies depending on the plan you choose)
• The first $405 per year for your prescriptions. This is called your deductible.
• After you pay the $405 yearly deductible, here's how the costs work:
• You pay the equivalent of 25% of your yearly retail drug costs from $405 to $3,750, and your plan pays the other 75% of these costs. After this is the..
• Coverage Gap (aka: Donut Hole): You pay 44% of generic drug costs and 35% of brand name drug undiscounted costs (drug manufacturers provide a 50% discount on brand name drugs).
• The amount beneficiaries pay while in the coverage gap decreases by a small percentage each year until 2020 when beneficiaries will only be responsible for 25% of brand and generic drug costs.  At this point, the coverage gap will provide the same benefit as the prior Initial Coverage period.
• After your Total Out-of-Pocket costs (as recorded by your drug plan) exceed $5000, you are eligible for Catastrophic coverage.  With catastrophic coverage, you pay a co-pay of $3.30 for generics or $8.25 for brand name drugs or a co-insurance of 5%, whichever is greater.
• These payments and coverages reset at the beginning of each calendar year.