The biggest advantage of Medicare Part D prescription drug plans is that they provide insurance coverage for needed prescription drugs that traditional Medicare does not cover, reports Medicare.gov. Disadvantages include the extra premiums and other costs, limited formularies and network pharmacies, gaps in coverage, and enrollment restrictions and penalties.
Medicare Part A only covers drugs used as part of hospital inpatient treatment, and Medicare Part B only covers limited drugs such as vaccinations and drugs prescribed in hospital outpatient situations, according to Medicare.gov. Other prescription drugs are covered by Medicare Part D prescription drug plans. Although individuals may not need prescriptions drugs when enrolling in Medicare at age 65, Medicare Part D plans offer insurance protection for the future when needed prescription drugs may get expensive, advises AARP.
Since Medicare Part D plans are optional insurance provided by private companies, they involve payment of additional monthly premiums apart from monthly Medicare Part B premiums, states Medicare.gov. Other costs include yearly deductibles, copayments and coinsurance. Once drug costs go beyond a certain amount, participants reach a coverage gap known as the doughnut hole during which patients pay a higher percentage of costs for needed drugs. Additionally, patients must use drugs in the Medicare Part D plan formulary and pharmacies in the plan network, or the plan does not cover prescription drug costs. If Medicare recipients do not sign up for a Part D prescription drug plan when they first become eligible, they must pay a permanent monthly penalty for late sign-up.