Part D:  Drug Coverage Options

Part D drug coverage is only available from private companies contracted with Medicare. You usually choose Part D drug coverage in one of two ways:

1.   A separate “stand alone” drug plan and then you buy a separate Medicare Supplement Policy

2.   Or you can get your part D drug coverage as part of a Medicare Advantage plan.

How the Part D drug plans work:

The term “Formulary” is a list of medications that the Part D drug plans or Medicare Advantage plans covers.

Note: ALL drug plans are not the same. You need an agent that will run your drug list based on the specific medications you are taking.

Give us a call. The Gary Smith Agency will be happy to run your drug list.

Drug Plan Stages

Stage One

Deductible Stage:

Most plans have an Annual deductible.  But the deductible may not apply to all drug tiers.  See the plan summary for details.

Stage Two

Initial Coverage Stage:

  • In this stage you pay a co-pay or a percentage of the drugs total cost.  The plan pays the rest.
  • You will stay in this stage until you use all the benefits in this stage.
  • Most people never leave Stage Two but once the benefit is used up, it is gone for that year.
  • Once the Benefit is used up in Stage Two, you move to Stage Three. 

Stage Three

Donut Holes:

In this Stage, you will pay 25% of the retail cost for your drugs. If your drug cost $100.00, your copay will be 25% or $25.00.

  • Once the Benefit is used up in Stage Three, you move to Stage Four. 

Stage Four

Catastrophic Stage:

This stage is the light at the end of the tunnel. You will pay a small copay or co-insurance amount. You will stay in this stage for the rest of the plan year.