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Medicare Part D

Medicare Part D Prescription
Stages of Coverage, Star Ratings & Ways to Help Lower Your Part D Prescription costs


Medicare Part D is a voluntary outpatient prescription drug benefit for people with Medicare provided through private plans that contract with the federal government. Beneficiaries can choose to enroll in either a stand-alone prescription drug plan (PDP) to supplement traditional Medicare or a Medicare Advantage plan, mainly HMOs and PPOs, that provides all Medicare-covered benefits, including prescription drugs (MA-PD).

Part D:  Four Stages of Drug Coverage

Stage 1:  Rx Deductible:
The amount you must pay for health care or prescriptions, before Original Medicare, your Medicare drug plan, your Medicare Health Plan, or your other insurance begins to pay.  For example, in Original Medicare, you pay a new deductible for each benefit period for Part A, and each year for Part B. These amounts can change every year.

Stage 2:  Initial Rx Coverage Level:
Once you have met your yearly deductible, and until you reach the plan's out-of-pocket maximum, you pay a copayment (a set amount you pay) or coinsurance (a percentage of the total cost) for each covered drug.

Stage 3:  Rx Coverage Gap:
Starting January 1, 2011, if you reach the coverage gap (also called the "donut hole") in your Medicare prescription drug coverage, you will get approximately a 50% discount on covered brand drugs. Medicare has also increased its coverage of generic drugs for beneficiaries in the coverage gap so that beginning in 2011 you will pay less for generic drugs as well. The drugs eligible for the brand discount or the additional generic savings may change based on the information we have available.

Stage 4:  Catastrophic Rx Coverage:

Once you reach your plan's out-of-pocket limit during the coverage gap, you automatically get "catastrophic coverage."  Catastrophic coverage assures that once you have spent up to your plan's out-of-pocket limit for covered drugs, you only pay a small coinsurance amount or a copayment for the rest of the year.

Visit Medicare.gov for more information.

Medicare Part D Prescription - Star Ratings

Medicare's Part D Prescription Star Rating System measures the performance of Medicare Advantage and Part D plans.  The Rating System scores how well plans perform in several categories:  quality of care and customer service.  Ratings range from 1.0 to 5.0 stars, with five being the highest and one being the lowest.   You can use the overall star rating to compare performance among several different plans but it's most important to make sure the plan you choose has your prescriptions covered their their formulary list.


  • Medicare reviews drug plan performance yearly. 
  • Medicare releases new Part D Prescription - Star Ratings each fall.
  • Visit Medicare.gov for more information.

Part D Rx:  Getting Help Paying For Prescriptions

 Using the Medicare.gov “Part D Rx Plan Finder Tool”.  This tool lets you know which Part D Prescription plan is most affordable based on “your prescriptions and which pharmacy you go to”.  Changing pharmacies may result in lower or higher out-of-pocket costs.

The Medicare.gov “Part D Rx Finder Tool” lets you which is most affordable by estimating your expected “monthly premium” and “how much you will pay at the pharmacy”.

Once you have your Part D plan in place the next place to see if you can reduce your Rx cost is to go to the Drug Manufacturer of your prescription.  Pharmaceutical carriers have what’s called a PAP – pharmaceutical Assistance Program or Patient Assistance Program.  These programs sometimes offer discount coupons or reduced pricing.  Many times, eligibility is based on your annual income.

The State of New Jersey has a Prescription Assistance program known as PAAD and Senior Gold. These programs help reduce premiums and out-of-pocket costs if you are deemed eligible, again based on your annual income.

Ask your doctor for samples

Check and see if there are saving by using GoodRx.com

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Christopher S. Kudryk
Insurance Specialist

KBenefits specializes in health, dental, vision, life and medicare insurance for employers and individuals in NJ & NY.

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