Medicare Part D
Medicare, the federal government’s health insurance program primarily for people age 65 or older, launched its prescription drug benefit in January 2006.
Known as Medicare Part D, this benefit was created as part of the Medicare Modernization Act of 2003. Rather than providing this coverage directly, Medicare has contracts with private insurers and employer health plans. Most plans are sponsored by private companies such as insurance companies or pharmacy benefit managers. These commercial prescription drug plans (PDPs) must be available to all people eligible for Medicare who live within one of 34 regions across the country.
NRECA’s Medicare Part D Prescription Drug Plans are employer prescription drug plans (Employer PDP). NRECA is one of the few employer health plans approved by Medicare to provide its own Part D benefit plans, giving you choices for affordable and accessible Part D prescription drug coverage.
NRECA’s Part D Plans are available across the country to all Medicare-eligible retired and disabled employees and retired and disabled directors of participating NRECA member co-ops, as well as their Medicare-eligible spouses, surviving spouses and dependent children.
How Medicare’s Standard Part D Plan Works
Most commercial plans offer a plan based on the Medicare's standard plan. You pay a premium each month to be covered by a Medicare prescription drug plan, plus costs for covered prescription drugs.
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Each year when using your benefit, you pay a share of the cost:
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You pay
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Plan pays
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| 1. You pay the first $320 of the cost of covered drugs – this is your annual deductible. |
$320 |
$0 |
| 2. You pay 25 percent of the cost—your coinsurance—for the next $2,610 in covered drugs. |
$652.50 |
$1,957.50 |
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At this point, you reach the initial coverage limit of $2,930. You now move into the coverage gap.
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Subtotal
$972.50
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Subtotal
$1,957.50
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3. While you are in the coverage gap, you pay a share of the cost until you reach $4,700, the maximum in true out-of-pocket costs or TrOOP.
For brand-name drugs, you pay 50 percent of the cost of covered drugs and you receive manufacturer discounts for the other 50 percent of the cost.
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You pay 50% and get 50% discount
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0%
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| For generic drugs, you pay 86 percent of the cost of covered drugs and the Plan pays 14 percent of the cost. |
86% |
14% |
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At this point, the amount you paid and the manufacturer discounts you received equal the maximum in true out-of-pocket (TrOOP) costs. You are now eligible for catastrophic coverage.
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Total
$4,700
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N/A
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| 4. You pay the greater of 5 percent of the cost of covered drugs or a minimum copayment of $2.60 for generic drugs or $6.50 for brand-name or specialty drugs. This is your catastrophic coverage. |
5%
No limit |
95%
No limit |