What does “step therapy” mean in Medicare drug coverage?
Each Medicare Part D plan has a list of covered drugs that are called a formulary. Within every formulary, there are a set of rules applied to the prescription drugs covered by the plan. One of those rules is called step-therapy. If you get a prescription for a medication that has step-therapy rules, there is […]
When does “catastrophic coverage” kick in with Medicare Part D coverage?
Starting in 2025, the structure of Medicare Part D changed significantly, and in 2026, catastrophic coverage continues to begin once your out-of-pocket spending on covered prescription drugs reaches $2,000 for the year. This includes what you pay directly and certain payments made on your behalf, such as through the Extra Help program. Once you reach […]
If I enroll in a Medicare plan with an initial deductible, does the deductible determine when I go into the “Doughnut hole”?
In 2026, Medicare Part D continues to offer simplified prescription drug coverage. The coverage gap, commonly known as the “donut hole,” remains eliminated. Now, after meeting your plan’s deductible (which can be up to $605 in 2026), you enter the initial coverage phase, where you pay a portion of your prescription costs. Once your out-of-pocket […]
What is the “Doughnut hole” in Part D Medicare coverage, and how does it work?
The Medicare Part D “doughnut hole” was a coverage gap that existed until 2024, where beneficiaries faced higher out-of-pocket costs for prescriptions after reaching certain spending thresholds. During the gap phase, people paid significantly more for their medications until they qualified for catastrophic coverage. The coverage gap was gradually reduced through the Affordable Care Act […]
What if I need a drug that isn’t on the Medicare Formulary or costs too much?
If your physician determines that you need a drug that is not on a Part D plans formulary, they can ask the insurance company for an exception. However, there are rarely drugs that are not on the formulary that an insurance plan will grant an exception for. In most cases, these are experimental drugs that […]
What is a “formulary” in Part D Medicare?
A formulary is a comprehensive list of prescription drugs covered by each Part D Medicare plan. While Medicare provides guidelines to insurance companies about drug classes that must be covered, it doesn’t specify exact medications that must be included. Some drugs are excluded from Medicare’s required coverage list, but Part D plans can include them […]
I already have drug coverage through the VA. Do I still need to sign up for Part D Medicare?
In most cases, if you have drug coverage through the VA, the benefits are considered creditable by Medicare. This means that as long as you are enrolled in VA drug coverage, you don’t have to enroll in a Part D drug plan to avoid incurring a late enrollment penalty if you ever do need or […]
What does a Medicare drug formulary with tiers mean?
Every Part D plan has something called a formulary, which is a list of drugs covered under the plan. Each formulary has a set of tiers, and in most cases, Part D plans have between three and six tiers. A lower-tier drug usually has lower copays or coinsurance than a drug in a higher tier. […]
If I sign up for Part D during Medicare enrollment, how soon does the coverage start to take effect?
When you sign up for a Part D plan, your coverage start date depends on which enrollment period you use. During the Annual Enrollment Period from October 15th through December 7th, your Part D coverage becomes effective January 1st of the following year. If you enroll during your Initial Enrollment Period when turning 65, coverage […]
I am covered by Medicare, but I don’t take any medications. Is it necessary to sign up for a drug plan?
You’re not required to enroll in a Medicare Part D drug plan when you first become eligible, but if you delay and don’t have other creditable drug coverage, you could face a late enrollment penalty when you do sign up. The penalty applies if you go 63 or more days without Part D or creditable […]