A wide range of prescription drugs must be covered for all Medicare recipients. These drugs include those that are considered part of a protected class, for example, drugs, which help, treat cancer or HIV/AIDS. Each plan has a specific list they use called a “formulary”. The price of the drug is dependent on which tier, or price point, it states on the formulary. If your drug is on the lower tier then the price will be considerably lower than one on a higher tier.

Medicare drug coverage helps you pay for the prescription drugs you may need. This optional coverage is offered to all Medicare recipients when they become eligible. Although it is optional, if you decline this coverage or decide to add it later, you will receive a penalty. In order to avoid a penalty, you will need to have existing creditable drug coverage, through either an employer, union or Extra Help; this penalty will be in place for as long as you have drug coverage. It is advisable to add this coverage even if you think you may not need it. To obtain Medicare drug coverage, you must join a Medicare approved plan that offers this service. Drug coverage plans vary in price and prescription drugs that they help cover.

Two ways to get Medicare drug coverage:

1. Medicare drug plans (Part D). You must have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance) to join a separate Medicare drug plan. These types of plans add drug coverage to:
   1. Original Medicare
   2. Some Medicare Cost Plans
   3. Some Private FeeforService plans, and Medical Savings Account plans.
2. Medicare Advantage Plan (Part C) or other Medicare health plans that include drug coverage. These plans provide coverage for your Part A, Part B and drug coverage under one plan. Medicare Advantage plans require Part A and Part B, and may not offer drug coverage.

Factors that determine drug coverage costs:

1. The prescriptions you currently have and if the drug is on the formulary (list of covered drugs).
2. Which pricing tier the drug is in.
3. The drug benefit phase you are currently in (whether you have met your deductible or you are in the catastrophic stage of the plan).
4. The pharmacy you choose to receive your prescription drugs. Preferred pharmacies have an agreement in place with your plan to provide cost savings.
5. If you qualify for Extra Help due to limited income and resources.