Medicare can feel complicated.
Its easy to get overwhelmed when sorting through pages of requirements andcoverage limitations.
If youre onMedicare Part D, you probably already expect to hit an annual cap for your prescription coverage.
Medicare Premiums Are Rising in 2024: Here’s How to Save MoneyHow Does a Medicare Grocery Allowance Work and Do You Qualify?Medicare Vision Coverage: How to Save Money on Eyeglasses and Exams
But the Medicare Coverage Gap, also known as the Medicare donut hole, does something interesting.
Yes, you hit a cap.
But eventually, that cap disappears again, and your medications are once again covered.
How does this work, and how can you prepare?
What is the Medicare Donut Hole?
Medicare is a federal program designed to provide insurance coverage to retirees.
Medicare Part B is available for a small fee and covers doctor visits.
If you need more coverage, youll source Medicare Part C through a private insurer.
Medicare Part D covers pharmaceuticals, and premium costs vary based on your plan benefits.
The basic plan monthly premium is $34.50 in 2024.
Youll also pay more if your annual income exceeds $103,000, or $206,000 if married filing jointly.
Once youve chosen a plan, it will cover your medication costs up to a certain amount.
Medicare has a limit each year, which is known as the Medicare coverage gap or donut hole.
At that point, Medicares catastrophic coverage3phase will kick in.
With catastrophic coverage, youll pay nothing for your medications through the end of the year.
In 2024, youll have full coverage for qualifying medications once your out-of-pocket spend reaches $8,000.
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Well keep it updated as offers changes or expire.
You canminimize the impactof coverage limitations with a little advanced planning.
This starts with the plan you choose.
Each Medicare Part D plan has its own formulary a fancy word for the list of drugs it covers.
Review the list with each plan and ensure your medications are covered.
While youre reviewing plans, also pay attention to the coverage tiers.
Drugs in higher tiers will cost more out-of-pocket than drugs in the lower tiers.
Did you know?
You, your representative or your prescriber can file an exception request4.
This will either move a drug to a lower tier or add it to your list of qualifying prescriptions.
Exceptions are only granted when a medication is deemed medically necessary for the patient.
Consider a Medicare Advantage Plan
Medicare isnt the only source of insurance once you reach retirement age.
you’re able to sign up for a Medicare Advantage plan that covers some of your out-of-pocket expenses.
But your medical providers wont always prescribe the generic versions.
Once you do reach it, youll see lower out-of-pocket costs on all your medications, keeping costs low.
Our partners:6 Things Rich People Do to Help Them Retire Early
4.
Apply for Assistance
Medicare isnt the only way to keep medical costs low in retirement.
Some of that assistance comes from outside the federal government.
There are pharmaceutical assistance programs that can help, Carey said.
These programs are usually offered by states6, pharmaceutical companies7and non-profit organizations8.
They can help lower the costs of prescription drugs.
If you qualify, youll have full coverage for your Part D premiums and expenses with no deductibles.
The Low Income Subsidy keeps you out of the coverage gap Medicare applies to other program participants.
Lastly, dont forget to shop around for the best prices on prescription medications.
Apps like GoodRX and SingleCare will show you which pharmacy has the best prices.
The Medicare coverage gap can increase your medical expenses in retirement, but it is avoidable.
They might know of local programs or discounts that can make things more affordable for you.
Stephanie Faris is a professional finance writer with more than a decade of experience.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
