If you are eligible for Original Medicare but do not have prescription drug coverage, you may be thinking about signing up. You have two plan options to consider; you can enroll in a stand-alone Medicare Part D plan or you can enroll in a Medicare Advantage plan that includes prescription drug coverage, also known as an MA-PD. You could get the prescription drug coverage you need through either of these options, but each plan will use different combinations of coverage and charges. The plan’s formulary, or list of covered drugs, and plans will have tiers of pricing based on generic vs. brand name drugs, mail order, or whether you visit a network pharmacy.
Because prescription drug plans are sold by private insurance companies, your options may be limited depending on where you live and what policies are available. Reviewing your options thoroughly is the best way to find the plan that will suit your needs.
Should you enroll in a stand-alone Part D plan or Medicare Advantage plan with prescription drug coverage?
Both Medicare Prescription Drug Plans (PDPs) and Medicare Advantage plans with prescription drug coverage (MA-PDs) are sold by Medicare-approved private insurance companies in the United States. These insurance companies are required to cover the same categories of drugs, but they have the option to choose which specific ones they include in each of the categories. Plans may have different monthly premiums, deductibles and copays.
A stand-alone plan will supplement Original Medicare and is a separate policy. You must be enrolled in Original Medicare Part A and/or Part B to be eligible for enrollment in a stand-alone Prescription Drug Plan (PDP). An MA-PD includes all benefits from Original Medicare Parts A and B, plus additional benefits bundled together into one plan, from one insurance provider.
Because you can basically get similar prescription drug coverage from either type of plan, your decision comes down to a matter of convenience, availability, cost, insurance provider, the plan’s formulary, and whether you already have Medicare coverage. To find the option that will meet your individual needs, you should explore plans available in your area.
When you narrow down the various plans in your area, compare the PDPs and the MA-PDs available. Take a look at what the monthly premium charges are, if they have deductibles, and how much the copayments are. Most importantly, find out if the prescription drugs you already take are included in their formularies and what pharmacies you will have to use. If you regularly take medications, you’ll want to have convenient pharmacy or mail order options.
If you are relatively healthy and simply wish to enroll in a low-cost prescription drug plan to avoid a late enrollment penalty later, you could opt for an MA-PD with a $0 monthly premium. On the other hand, if you have chronic health issues, you may be better off with an MA-PD that has a maximum out-of-pocket (MOOP) limit which may help lower your overall annual medical costs.
If you already have a Medicare Advantage plan and you want to add prescription drug coverage, you must enroll in an MA-PD. You cannot add a Medicare PDP to your existing MA unless you enroll in a Medicare Advantage plan that is a Private Fee For Service plan (PFFS). Before enrolling in an MA-PD, you must first be enrolled in Original Medicare Parts A and B.