Because Original Medicare does not include coverage for most prescription drugs, Prescription Drug Plans (Part D or PDPs) help pay for commonly prescribed generic and brand-name medications.
There are two ways you can get the prescription drug coverage you need from private insurance companies on the Aon Retiree Health Exchange:
- Medicare Part D can be added to Medicare Parts A and B, and is a more complete option when a Medigap plan is included.
- Medicare Advantage Prescription Drug (MAPD) Plans bundle Medicare Advantage with prescription drug coverage. If you enroll in a MAPD, you do not need to enroll in a separate prescription drug plan. (While most Medicare Advantage are MAPD and include a prescription drug plan, some options allow you to add stand-alone drug coverage if it’s not included).
The Donut Hole
The Medicare Part D coverage gap, commonly referred to as the "donut hole," is a temporary limit on what the drug plan will cover. It begins after you and the prescription drug plan have spent a certain amount for covered drugs for the year.
While in the coverage gap, you will be responsible for the majority of your prescription costs. If your needs are significant, and you reach the annual threshhold in total prescription costs for the year, then you will automatically get catastrophic coverage. Catastrophic coverage ensures you will only pay a small coinsurance or copayment for covered drugs for the rest of the year.
When can you join, switch, or drop a Prescription Drug plan?
If you decide not to join a Medicare prescription drug plan when you are first eligible, you could pay a late enrollment penalty if you join one later.
Initial Enrollment: You have a 7-month period during initial enrollment. You can join 3 months before the month you turn 65, the month you turn 65, and up to 3 months after the month you turn 65.
If You Are Disabled: You can join during the 7-month period that begins 3 months before your 25th month of disability and ends 3 months after your 25th month of disability.
Annual Open Enrollment Between October 15 and December 7: Anyone with Medicare can join, switch, or drop a prescription drug plan.
Special Enrollment: In certain situations, you may be able to join, switch, or drop prescription drug coverage. Those special circumstances include a move out of your plan’s service area or you lose your current coverage.