Purchasing a Prescription Drug Plan
Prescription Drug Plans
Prescription drug coverage is available to everyone with Medicare and is only available through private insurance companies. You should join a Medicare drug plan even if you don't take many prescriptions now. If you don’t join a Medicare drug plan when you are first eligible, and you don't have other creditable prescription drug coverage, you'll likely pay a late enrollment penalty when you do sign up.
Phases of Prescription Drug Coverage
NEW FOR 2025! The Donut Hole/Coverage Gap has been eliminated!
Deductible Phase
In this Phase, you pay the plans deductible ($590 is the benchmark or standard) if it has one. The deductible for some plans may be less depending on structure. The deductible for some plans only applies to select tier levels. If your plan has no deductible, your plan starts in the Initial Coverage phase.
Initial Coverage Phase
In this Phase, you pay for your medication as described by your plan.
- Tier 1: Preferred Generic (lowest copay)
- Tier 2: Generic (next lowest copay)
- Tier 3: Preferred Brands (higher copay)
- Tier 4: Non-Preferred Brands (next higher copay)
- Tier 5: Specialty Drugs (Highest co-insurance)
- Tier 6: Condition Specific Medications (Typically $0 Copay. This Tier is not on all Plans).
Once you spend $2000, you enter the next phase – Catastrophic Coverage.
Catastrophic Coverage
In the Catastrophic Phase, you will pay $0 for all your covered medications. You will remain in this phase for the balance of the year. All coverage resets January 1 of each year, no matter when you joined your plan.
Looking for Gap Coverage?
If you historically find yourself in the Coverage Gap/Donut Hole or Catastrophic Coverage, the New Medicare Prescription Payment Plan may benefit you.