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You can get prescription drug coverage no matter how you get your Medicare health care. There are two types of Medicare plans that provide insurance coverage for prescription drugs.

1. Medicare Prescription Drug Plans. These plans add coverage to the Original Medicare Plan, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans if you join one.

2. Prescription drug coverage that is a part of Medicare Advantage Plans and other Medicare plans. If you join one, you would get all of your Medicare coverage through these plans, including prescription drug coverage.

These plans are offered by insurance companies and other private companies approved by Medicare. Both types of plans are referred to as Medicare drug plans.

Medicare prescription drug coverage is insurance available to everyone with Medicare. Like other insurance, if you join a plan offering Medicare drug coverage, there is a monthly premium. The amount of the monthly premium is not affected by your health status or how many prescriptions you need. You will also pay a share of the cost of your prescriptions. If you have limited income and resources, you may qualify for extra help paying for Medicare prescription drug coverage costs. Medicare drug plans will offer different benefit designs. Some plans might offer more coverage and additional drugs for a higher monthly premium. If you decide not to join a drug plan when you are first eligible, you may pay a penalty if you choose to join later. Even if you don’t take a lot of prescription drugs now, you still should consider joining a drug plan. As we age, most people need prescription drugs to stay healthy. For most people, joining a Medicare drug plan when you are first eligible for Medicare means you will pay your lowest possible monthly premium. If you don’t join a plan when you are first eligible, you will likely have to wait until October 15 to December 7 of each year to join. If you don’t join a Medicare drug plan when you are first eligible and you have a continuous period of 63 days or more without creditable prescription drug coverage, you may have to pay a late enrollment penalty when you do join. Your premium cost will go up 1% of the current year’s national average premium for every full month you were eligible to join and didn’t. If you join between October 15 and December 7, your coverage will begin January 1 of the following year.

Coverage Gap (Donut Hole) - Most Medicare drug plans have a coverage gap. This means that after you and your plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your drugs up to a limit. Your yearly deductible, your coinsurance or copayments, and what you pay in the coverage gap all count toward this out-of-pocket limit. The limit doesn't include the drug plan's insurance premium.

There are some plans that offer some coverage during the gap (usually for generic drugs). However, plans with gap coverage may charge a higher monthly premium. Check with the plan first to see if your drugs would be covered while in the coverage gap.

Catastrophic 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.

If you have, or are eligible for, other types of prescription coverage, read all the materials you get from your insurer or plan provider. Examples of other types of prescription drug coverage include coverage from an employer or union, TRICARE, the Department of Veteran’s Affairs, or a Medigap policy. If you still have questions, talk to your benefits administrator, insurer, or plan provider before you make any changes to your current coverage. Your choices for prescription drug coverage may be different, or you may have other decisions to consider.