written by: – Beth Braverman, for GoodRx – July 23, 2021
Key takeaways:
- To get prescription drugs via Medicare, you’ll need either a Medicare Part C (Medicare Advantage) or Part D policy.
- Part C and Part D policies are provided only by private insurers.
- In choosing between Part C and Part D, consider whether you want coverage for other types of medical care and if you have other insurance that covers prescription drugs.
If you’re on Medicare, there are two ways that you can get outpatient drug coverage. You can choose a stand-alone Part D plan to go along with your Original Medicare Parts A and B. Or you can enroll in a Medicare Advantage (MA) plan, also known as Medicare Part C, that includes prescription drug benefits (MAPD).
Given the cost of prescription drugs, it’s worth considering this coverage even if at present you don’t spend much on your medications. Understanding how Medicare drug coverage works can help you make an informed decision about the best plan for you.
What do Medicare Part C and Part D have in common?
Medicare Parts C and D have several similarities:
- Both are private insurance. The federal government offers Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance). By contrast, Medicare Parts C and D are approved by Medicare but offered through private insurers.
- Both have premiums and out-of-pocket costs. In this way, Medicare Parts C and D are like most other types of health insurance.
- Both have an open enrollment period. During their shared open enrollment period —October 15 through December 7—you can enroll in a new plan or switch plans. Medicare Advantage has an additional open enrollment period—January 1 through March 31—when you can switch to another Advantage plan.
- Neither plan covers medications when you are outside of the United States. If you plan to travel abroad, consider getting travel insurance that will cover your drug costs.
How is Medicare Advantage different from Part D?
Medicare Part D is a supplement to Original Medicare and covers prescription drugs only. Medicare Advantage, on the other hand, replaces Original Medicare and becomes your hospital and medical insurance plan.
In addition, Medicare Advantage plans often cover prescription drugs as well as dental, vision, and hearing care. However, people with Medicare Advantage plans are typically limited to a network of doctors that accept their insurance, while those with Original Medicare can go to any doctor that accepts Medicare (most do).
Nearly 90% of Medicare Advantage plans include Medicare Part D, but you can also purchase Part D separately if you have an Advantage plan that does not include it. About a third of Medicare beneficiaries had Medicare Advantage plans in 2019.
How do factors such as deductibles and copay levels vary between Medicare Advantage and Part D?
The amount you pay in deductibles and copays for Medicare Advantage will vary depending on the plan you choose and where you live. That said, MA plans typically cap your total out-of-pocket costs. For 2021, the cap averages just over $5,000 for in-network services and about $9,200 for out-of-network services, according to the Kaiser Family Foundation.
Copayments for Medicare Part D plans are a bit more complicated. You’ll typically owe coinsurance or copayments for drugs until you’ve reached your plan’s deductible. After the deductible—once you and the plan have spent a combined $4,130—you’ll pay just 25% of the cost of your drugs until you reach the out-of-pocket maximum of $6,550.
Medicare Part D premiums vary significantly depending on where you live. An analysis by Kaiser Family Foundation found that premiums ranged from less than $6 per month in Hawaii to more than $200 per month in South Carolina.
Is the appeal process the same for Part C and Part D?
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