Part D is the part of Medicare that covers prescription drug costs. It is optional and incurs an extra monthly premium, but its short-term costs often pay off in the long run for most people. Some people are eligible for financial help to offset short-term costs. This Extra Help, also referred to as the low-income subsidy, is based on your monthly income. Learn more about the Part D low-income subsidy and how you can get it.
Part D is an optional addition to Medicare. These prescription drug plans are offered by private insurance companies. Each plan differs based on the company and what benefits it offers. These plans add a monthly benefit. If you have Part B, Part D, and a Medicare Supplement Plan, that is 3 monthly premiums. These costs add up quickly.
The subsidy targets people with limited incomes and cannot afford all of these premiums. The Extra Help money helps pay for the monthly premium, the yearly deductible, and the co-pays. Generally, the subsidy is worth about $5,000 per year.
You can receive the Low-income subsidy benefit if enrolled in a Medicare Advantage prescription drug plan (MAPD) or in a stand-alone Medicare Part D plan. The low-income subsidy covers some or even all your premium that goes toward your prescription drug benefit. Just remember you may still be responsible for the premium that goes toward your hospital and medical benefits. The savings on your overall premium are always tied to the Part D benchmark for each year.
Being enrolled in Extra Help also allows an additional Special Enrollment Period (SEP) to make additional changes to their Part D coverage mid-year. Plan changes can be made once a quarter for the first 9-months of the calendar year, with the change effective the month following the one when the change is made.
In order to qualify for the Part D Extra Help, there are a few criteria you must fulfill. Namely, you must:
- Be receiving Medicare
- Have a limited income and resources
- Be a resident in the one of 50 states or Washington, D.C.
- Receive full Medicaid benefits
The limited income depends on your marital status. Specifically, if you are married and living with your spouse, your combined savings, investments, and real estate cannot be worth more than $29,160 to qualify for Extra Help. If you are not married or living with your spouse, the limit is $14,610. When adding up your resources, you do not need to include your home, vehicles, personal possessions, life insurance, burial plots, burial contracts, or back payments from Social Security.
What Part D Covers
Part D is a very helpful part of Medicare to have. Part D covers many different prescription medications. Prescription drugs are otherwise not covered in Parts A and B of Original Medicare. Part D helps patients pay for some of the most common medications.
There are a number of ways to get Part D. You can get Part D through a specific plan via a private insurer or through a Medicare Advantage Plan.