Prescription drugs are an important, and potentially costly, part of healthcare coverage. Original Medicare (Part A and Part B) does not include prescription drug coverage. Understanding your options will ensure you have the coverage you need. If you are covered through the Medicare Supplement Plan of the PC(USA), Medicare Part D (prescription drug coverage) and supplemental prescription drug coverage are included in your coverage.
If you are not enrolled in the Medicare Supplement Plan, other sources of outpatient prescription drug coverage are
- another employer’s plan (including your spouse’s employer), if available;
- a Medicare Advantage plan (if it includes prescription drug coverage);
- a stand-alone Part D plan offered by a private insurer.
The drugs covered by prescription drug programs can differ widely from plan to plan and across the same plan from one year to another. Compare your options annually during Medicare’s open enrollment period. When comparing Part D plans, be sure to determine whether they are stand-alone plans or plans that combine prescription drug coverage with medical coverage, as the Board’s Medicare Supplement Plan does.
Prescription Drug Coverage through the Medicare Supplement Plan
The Medicare Supplement Plan, offered through the Benefits Plan of the PC(USA) to eligible plan members and certain family members, provides supplemental coverage for hospital and medical expenses and primary coverage for outpatient prescription drugs. To enroll for coverage under the Medicare Supplement Plan, you must be enrolled in Original Medicare (Medicare Part A and Part B).
While Original Medicare does not include prescription drug coverage, Medicare sets the standards that private and employer-based plans must meet in order to qualify as Part D coverage. The prescription drug coverage provided through the Board’s Medicare Supplement Plan qualifies as a Part D plan and includes supplemental coverage to fill the coverage gap in Part D plans known as the donut hole.
By providing qualified Part D coverage, the Medicare Supplement Plan can take advantage of subsidies from the federal government and the pharmaceutical industry under healthcare reform. These subsidies help slow the rising cost of the plan.
The plan’s prescription drug program is administered by OptumRx, the same service provider that administers the prescription drug program for active members of the Benefits Plan. The cost for prescriptions at retail pharmacies varies by drug and by pharmacy. For further details about how the prescription drug program works, including copayments and copayment maximums, see Guide to the Medicare Supplement Plan.
To check if your prescription drugs are covered by the plan, refer to the Drug Formulary for Medicare Supplement Members, which lists covered drugs. The Drug Formulary is updated annually.
Medicare Advantage Plans
Offered by private insurers approved by Medicare, Medicare Advantage plans provide Part A and Part B benefits to you directly. Most include Part D prescription drug coverage. If they do not, you can join a stand-alone Part D plan to add such coverage.
Stand-alone Medicare Part D Plans
If you do not enroll in the Medicare Supplement Plan when you retire, you may purchase coverage for outpatient prescription drugs through a stand-alone Medicare Part D plan. This coverage is offered by private insurers and partially subsidized by Medicare.
If you do not join a stand-alone Part D plan when you are first eligible for Medicare and want to enroll later, you may enroll during the annual Medicare open enrollment period. However, if you enroll after you are first eligible, you must pay a late enrollment penalty unless you have similar coverage (creditable coverage) through an employer or union when you enroll.
For information about selecting prescription drug coverage in retirement and your coverage options, see Choosing Healthcare Coverage at Retirement.