What is Medicare Part D?
Medicare Part D is prescription drug coverage for individuals with Medicare. Part D plans are provided only through private insurance companies that are contracted with Medicare (Federal Government).
When do you enroll in Medicare Part D?
You usually enroll in Medicare Part D when you turn 65 years old or when you are eligible for Medicare (Part A &B). You may delay enrolling in Part D if you have coverage through work or military service.
If you want Part D, you must choose Part D coverage that works with your Medicare health benefits. You have to pay a premium for Part D Plans.
If you have Original Medicare or Medicare and a Medicare Supplement, choose a stand-alone Part D plan. Most Medicare Advantage plans include Part D as part of the plan.
When can you enroll in a Part D?
When you turn 65 years old or enrollment outside of your Open Enrollment is typically between Oct. 15th through Dec. 7th of each year, or Annual Enrollment Period (AEP).
Part D Penalty
If a Part D plan is not picked up when eligible you will be penalized 1% each month you could have had the plan, and didn’t. This penalty will be paid separately to Medicare if you enroll in a Part D plan in the future.
3 phases of coverage for Medicare Part D.
It is important to understand these phases, particularly if you find yourself requiring high cost for your prescribed medication.
The three phases are:
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Initial Coverage Phase
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Donut Hole Phase
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Catastrophic Coverage Phase
Initial Coverage Phase is outlined with the Part D Medicare Plan chosen. This will consist of deductibles, co-pays, and coinsurance that the beneficiary will be required to pay, and adhere to up to reaching the Initial Coverage Limit.
Donut-Hole Phase starts once the initial coverage limit is reached. Then the beneficiary has to pay the full cost of his, or her, prescription drugs up until the total out-of-pocket expense is reached. However, starting in 2019 the donut hole will be starting to close.
Catastrophic phase will continue from this point allowing the beneficiary to pay the outlined co-pays. This will reduce their cost a great deal until the next calendar year. Everything will reset and start with the new outline of benefits for the current years plan.
What is the Part D Penalty?
You might face an extra monthly fee if you wait until after your Initial Enrollment Period to enroll. A typical Initial Enrollment Period is at 65 years old. The penalty is added to your monthly premium.
The cost is determined on how long you went without creditable prescription drug coverage. It’s calculated by multiplying 1% of the national base beneficiary premium.
Is Medicare Part D Subsidized?
All Medicare Part D plans are subsidized by the Federal Government. However, some seniors can qualify for a larger subsidy called Low Income Subsidy (LIS). Anyone with a relatively small income can acquire a more generous subsidy. It assists low income beneficiaries with their prescription drug costs so that they don’t enter the coverage gap.
Used in Conjunction with Original Medicare
Medicare beneficiaries often use Medicare Part D plans in conjunction with the Original Medicare Part A coverage and B plans. Some people combine them with Medicare Supplement plans.
A number of retirees choose to enroll in Medicare Advantage plans that include drug coverage; these individuals don’t need Part D. In fact, you’ll automatically lose membership in a Medicare Advantage plan with drug coverage if you sign up for a separate prescription plan.
Preferred Pharmacy Network for Medicare Part D
Each plan has different rules about the pharmacies that you can use. All plans pay for medicines from traditional drug stores, and mail-order suppliers may offer a higher discount for 90 day medication supply. You might only be able to use specific pharmacies on a list, with some having a discount price for the same medication at a preferred pharmacy.
It’s important to choose a plan that allows you to purchase medications at your favorite pharmacy. Otherwise, as mentioned before look at the mail order prices for bigger discounts, specially for a 90 day supply.
Premiums
Premiums vary depending on the specific plan that you select. You will pay a premium and a co-pay your medications.
The government assists people who need help paying for Part D coverage. Depending on where you live, greater assistance may be available from State or federal agencies. You must meet income and asset requirements to qualify. If you don’t qualify for State assist, you may still qualify for Federal assist.
Drug Coverage
Every insurer maintains a unique list of drugs that it covers. Insurance companies often classify Medicare drug costs into multiple tiers. High-tier drugs typically have bigger co-pays. However, insurers make exceptions from time to time. If you have a medication with no tier, some companies make you submit with the help of your Doctor for an exception to that specific medication in order for you to pay a lower co-pay.
Tiers:
Tier 1 – Preferred Generics
Tier 2 – Generic
Tier 3 – Preferred Brand
Tier 4 – Non-Preferred Brand
Tier 5 – Specialty
Your Physician may play a key role
For instance, a Part D plan may limit you to purchasing a certain number of pills in each transaction. Insurers often require doctors to request permission before prescribing certain high-cost medicines.
A physician might be expected to prove that a drug is truly needed. Alternately, the insurance company could require you to try a less expensive drug before taking a more costly medication.
Deductibles
Every plan sets its own deductible. You won’t receive any coverage until you’ve spent this much money on covered prescription drugs in one year. The government caps deductibles at a certain amount; this limit changes from time to time. Insurers also charge co-pays. These costs differ tremendously depending on the plan that you choose.
Summary
► Enroll in Part D when you turn 65 yrs old or when you are eligible for Medicare.
► Part D cover medications.
► You must pay a premium, plus co-pays, and most likely meet a deductible for a Medicare Part D plan.
► Medicare Advantage plans usually include a Part D plan.
► If you have a Medicare Supplement plan you need to add a Part D plan.
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To learn about Medicare search our Blog Post or go to our Medicare page.
