Medicare Part D Explained

Medicare Part D is the Prescription Drug benefit of Medicare. There is no “Government Option” Part D benefit like there are with A and B. Each Part D plan is offered by a private insurance company. In order to have coverage for prescriptions, you must enroll or join a Part D plan offered by a private insurance company (like United Health Care or Blue Cross and Blue Shield) that contract with Medicare.

Medicare Part D Basics

If you do not elect to join a Part D plan, you will be responsible for the full retail cost of your prescriptions. If you do not join a Part D plan when you are first eligible, a late enrollment penalty will start to add up. This penalty will be applied when you finally do decide to join a plan. You will be required to pay the higher price for the rest of your life.

The two most common ways to buy Part D are:

1. Buying a stand-alone plan (along with Medicare and a Supplement)
2. Enrolling in a Medicare Advantage Plan that also includes Part D

When you elect Part D coverage, you get an ID card to use at your local pharmacy that shows what your co-pay is for different drugs ($5 for generics). Many plans also offer a mail order option for maintenance drugs as well.

There are a few moving “parts” to Part D. They are:

• Monthly premium – average monthly Part D premiums range from $0 – $100 for 2025.
• Deductible amount – the amount you have to pay before your coverage kicks in. The annual 2025 deductible will be $590.
• Copay – the amount you pay at a pharmacy after you meet your deductible and will vary from plan to plan and from drug to drug. Drug copays range from $0 for a generic up to $100+ for a brand name.
• Coinsurance – the percentage you pay at a pharmacy after you meet your deductible and will vary from plan to plan and from drug to drug.
• Catastrophic Cap – all plans under Medicare (Stand Alone Part D & Medicare Advantage that includes Part D) will have a $2,000/year cap on all medications that fall under the plan formulary. Pro-tip –  copays paid for medications filled through prescription discount or coupon aggregator models like Goodrx may save you money but will not be applied to help you meet the $2,000 Catastrophic Cap.
• Formulary – each company has a different list of drugs they cover. This is crucial as the drugs you currently take may or may not be covered by different plans.
• Preferred pharmacy – costs for medications filled in an out of network pharmacy will not be applied towards the $2,000 Catastrophic Cap. We check to ensure your preferred pharmacy remains in network with the most optimal drug plan year-after-year.

Since each insurance company offers different monthly premiums, drug formularies, and copay structures, choosing the right plan can be overwhelming. That’s where Steinlage Insurance Agency comes in.

We use proprietary software to analyze all available Medicare drug plans and ACA options based on your zip code, preferred pharmacy, and current prescriptions. But we don’t just compare prices. We evaluate each plan’s coverage features, including prior authorization requirements, medication tiers, and network restrictions, to match you with the option that best fits your needs and preferences.

Some clients may prefer a higher monthly premium to avoid delays or prior authorizations, while others may prioritize keeping monthly costs low. There’s no one-size-fits-all answer, only the right fit for you.

Before enrolling, contact us for a personalized review. There are often important plan details that aren’t visible on public marketplaces, and we’re here to help you avoid costly surprises.

Each Part D company has three different coverage rules that can cause headaches when getting certain prescriptions covered:

When evaluating your Part D options, you should consider the restrictions of your medicine along with the different factors mentioned above. The lowest-priced plan may not cover your prescriptions or may require you to change your drugs. This ultimately can lead to higher prices in the long run along with the added stress and frustration of having to visit your doctor to get your prescriptions switched over.

Medicare Part D companies renew their contracts with Medicare annually. This means that each year, the moving “parts” can move. You then have the opportunity to adjust your coverage accordingly. This can be done during the Annual Enrollment Period or AEP from 10/15 to 12/7 of each year. Your change begins 1/1 of the following year.

Medicare Insurance Broker

Steinlage Insurance Agency can help! We have advised clients on Part D for years and are able to use all available resources to help pick the plan that fits your prescriptions and particular situation.

Give us a call at 636-561-5060 for a free, no-obligation phone consultation to help narrow down your Medicare Part D choices.

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