Medicare Part D
Medicare Part D prescription drug plans help lower the cost of prescriptions. Beneficiaries can pay copayments instead of paying the full price of prescribed medicines.
For over 40 years, beneficiaries had no options for retail prescription drug coverage. Medicare Prescription Drug plans provide coverage for medications; however, enrollment is optional.
These plans are very popular for those who have Medicare coverage. You have the option to enroll in a Part D plan through a private insurance company.
Medicare can be difficult to understand, Part D is no exception; here’s what you need to know!
Medicare Part D Prescription Drugs
Prescriptions can be costly, especially when paying out-of-pocket. Part D is a program that helps lower some prescription expenses.
When you first become eligible, Medicare prescription drug plan enrollment should be a priority. Especially if Medicare is primary coverage for health insurance.
If you’re still working you may delay your Part D enrollment until you decide to retire. Although, you must have employer insurance that includes drug coverage better than or as good as Medicare Part D coverage.
Otherwise, if you delay enrollment, the Part D late enrollment penalty applies.
Part D Coverage Phases
There are four phases of coverage to understand with prescription drug plan enrollment. It’s important to understand these phases, particularly if you find yourself requiring a high cost for your prescribed medication.
The four phases are:
- Deductible Phase (if applicable)
- Initial Coverage Phase
- Donut Hole Phase
- Catastrophic Coverage Phase
The Initial Coverage Phase consists of co-pays and coinsurance that the beneficiary must pay and adhere to up to reaching the Initial Coverage Limit. Then, the Donut-Hole Phase starts after the Initial Coverage limit.
The beneficiary has to pay the full cost of prescription drugs up until the total out-of-pocket expense is reached. However, starting in 2019 the donut hole, or coverage gap, begins to closing.
The Catastrophic phase continues from this point allowing the beneficiary to pay the outlined co-pays. This reduces their cost a great deal until the next calendar year.
Then, everything resets and starts with the new outline of benefits for the current years plan.
Part D Spending that Medicare Tracks
True Out of Pocket Costs (TrOOP) is something Medicare will track annually. Since Medicare tracks spending, you get protection from paying the same thing two times. So, if your deductible is satisfied before you move out of state, then expect that deductible to still be satisfied in your new state.
The same goes for the coverage gap as well as the catastrophic coverage phase; no matter where you move, Medicare knows your coverage stage. Every year you can change plans since plan benefits change annually.
During the Annual Election Period plan changes can be made without penalty.
Medicare Open Enrollment 2019
The return of the Open Enrollment Period 2019 brings big changes starting January 1st, 2019. Medicare Open Enrollment 2019 allows Advantage beneficiaries to switch to a different Advantage plan. Beneficiaries can also go back to Original Medicare, enroll in Part D and Medigap.
Beginning in 2019, for Advantage beneficiaries, this period runs from January 1st – March 31st.
The Annual Enrollment Period (AEP) takes place each year the AEP is from October 15th – December 7th. This is the yearly time to change coverage and have a new policy effective January 1 of the following year.
Part D Late Enrollment Penalty
Part D plans aren’t mandatory; however, enrolling is highly recommended by insurance agents and practitioners.
Remember, failing to enroll in a Part D plan in time could result in penalty charges and those penalties accumulate over time.
Medicare calculates the penalty as follows:
1% of the national average base Part D premium for every month that you went without coverage or had no other creditable coverage. Rounded to the nearest $.10, the penalty is in addition to your new Part D premium.
Depending on how long you delay enrollment, determines the cost of the penalty charge. The exception is if you had other coverage for prescription drugs equivalent to or better than Part D coverage; if this is the case Medicare waives the penalty.
Used in Conjunction with Original Medicare
In fact, you’ll automatically lose membership in an Advantage plan with drug coverage if you sign up for a separate prescription plan.
Part D Premiums
Premiums vary depending on the specific plan that you select. Most of an insurer’s customers pay the same price, but an extra charge applies if you have a high level of income.
This is called the Part D income-related monthly adjustment amount. 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.
Preferred Pharmacy Network for Part D
Each plan has different rules about the pharmacies that you can use. You might only be able to use specific pharmacies on a list.
It’s important to choose a plan that allows you to purchase medications at a nearby drug store. Otherwise, you may need to travel long distances after being diagnosed with a medical condition.
Prescription Plan 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.
Every insurer maintains a unique list of drugs that it covers. Insurance companies often classify drug costs into multiple tiers. High-tier drugs typically have bigger co-pays. However, insurers make exceptions from time to time.
A company might pay for a larger portion of a drug’s cost if a doctor convinces them that less expensive medications couldn’t successfully treat your condition.
Physicians, pharmacists, and patients must follow various rules to maximize coverage. 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.
The insurance company could require you to try a less expensive drug before taking a more costly medication.
Medicare Part D Enrollment Periods
Part D plans are specific to the area you reside in, you must enroll in a plan in your service area. Enrolling in a Part D plan can be done online or by calling one of our agents at the number above; beneficiaries should enroll during a Part D Enrollment Period.
Medicare Advantage can have Part D drug coverage included in the plan.
When is the Enrollment Period for Part D
Medicare has certain windows of time you can join in a Part D drug plan.
For example, the first time you may enroll is during your Initial Enrollment Period. The second chance you have allows you to change Medicare prescription drug plans during the Annual Election Period.
The Initial Enrollment Period is the 7-month window to enroll when you first qualify for Medicare Eligibility. This time frame consists of the 3 months before and after turning 65, and the month of your 65th birthday.
The Initial Enrollment Period for Medicare Part D is also available for those who are eligible for Medicare because of a disability.
The Annual Election Period runs every year from October 15 through December 7. This is the time you can enroll or dis-enroll from any Part D drug plan without penalties.
Changes may include benefits, formulary, (drugs covered by your plan) pharmacy or provider network, premiums as well as co-insurance/co-payments.
Part D Annual Notice of Change
Beneficiaries receive an Annual Notice of Change in September by mail; this notice lists any changes being made. Any changes made to your Part D plan begins on January 1 next year. Once enrolled, if satisfied with your current Part D plan, the renewal is automatic the following year.
Beneficiaries may need to change drug plans during the AEP due to changes in medication needs, and switch to a plan that is more suitable for them.
What other Enrollment Periods are for Medicare prescription drug plans
After enrolled in Medicare Part D, changes can’t be made for the rest of the calendar year.
Beneficiaries need to wait until next AEP to change plans or dis-enroll. However, Medicare is aware that life happens; certain circumstances may cause a need to change plans before the next AEP.
During certain instances, Medicare grants a beneficiary with a Special Enrollment Period (SEP). For example, if you were to move to another state or your group medical coverage ends mid-year, the SEP would apply to you.
The Benefits of Selecting a Medicare Prescription Drug Plan
Most states offer many prescription drug plans. Trying to find the best plan for you can be overwhelming. Don’t worry, we’re here to help free of charge.
Our licensed brokers are highly qualified to help you through this process. We know it can be challenging and confusing deciding the best plan for your medical needs.
If you’re a beneficiary, seeking assistance in choosing the right plan for you, you’ve come to the right place. We’re here to answer any questions or concerns. After you join through one of our agents, you’ll have access to our client care team through the life of your policy.
Enrolling in a Part D Drug Plan saves you money for medications that can be very expensive. We can help you by enrolling online here or you can give us a call at the number above.