Medicare Drug Costs
Legislators are working hard with Medicare to lower the premium and other costs that come with Part D. Also, having more pharmacy options as well as prescription options available to beneficiaries.
Medications that fall on the higher tiers attract higher coinsurance costs and co-payments compared to those on the lower tiers. Private insurers set their own premiums, so it pays to compare plans in your area to make sure that you’re choosing the right plan for your prescription drug needs
Keep in mind, Medicare prescription drug policies and Medicare Advantage drug plans vary in terms of the particular medications they cover as well as the costs the beneficiary pays. This is despite the prescription drugs being the same.
Medicare drug costs depend on:
- The medications you take, and how frequently you take them
- Whether the pharmacy you go to is within the network of your plan
- Your medications are on your Part D’s formulary
- Whether you have chosen the stand-alone Part D Medicare Prescription Drug policy or the Medicare Advantage Drug Plan
- If you receive extra help paying your Part D Medicare costs
One major cost that you should consider is the monthly premium. Stand-alone Part D policies and Medicare Advantage policies have a monthly premium. Other than the monthly premiums, you may have to pay an annual deductible and a co-payment/coinsurance.
Average Monthly Part D Premiums
|For 2019, your additional premium based on income is as follows:|
|Individual Annual Income||Couples Annual Income||What you pay in addition to your regular Part D premium|
|Equal to or below $85,000||Equal to or below $170,000||$0|
|$85,001 – $107,000||$170,001 – $214,000||$12.40|
|$107,001 – $133,500||$214,001 – $267,000||$31.90|
|$133,501 – $160,000||$267,001 – $320,000||$51.40|
|$160,001 – $499,999||$320,001 – $749,999||$70.90|
|$500,000 and above||$750,000 and above||$77.90|
Medicare Part D Formulary
As mentioned above, each drug policy has its formulary. As a beneficiary, it’s good to check your plan’s formulary to confirm if your drugs are covered. Call our advisors for more information on this! Below are a few examples of what prescriptions are & are not covered.
- Certain vaccines
- Insulin and all the equipment associated with insulin injection (needles, gauze, syringes, and alcohol swabs)
- Prenatal vitamins
Not Covered Prescriptions:
- Drugs for cosmetic purposes
- Medicines for anorexia, weight gain or weight loss
- Drugs meant to relieve colds and coughs
- Medications for erectile dysfunction
- Individual outpatient drugs
- Over-the-counter medications
- Minerals or vitamin drugs except those noted in the formulary
- Fertility drugs
The same formulary drug tier definitions are used on 95% of stand-alone Medicare PDPs and 76% of MAPDs. Also, Medicare plans use these tiers to organize covered prescriptions into cost-sharing groups. Even though these drug plans use the same 5-Tier formulary, each PDP insurance plan individually determines which medications will be placed into what tier groups.
- Preferred Generic
- Preferred Brand
- Non-Preferred Drug
- Specialty Tier
How to Pay for Medicare Part D
Prescription Drug Plans typically charge fees every month. The monthly premiums can be an automatic deduction from your Social Security Benefits payment.
The first premium deduction takes about three months to start, at which point three months-worth of premiums will automatically be withdrawn. After your three-month premiums are paid, one premium per month will be withdrawn.
You may also select to get billed directly if that works best for you.
Some beneficiaries may find that they must pay for a Part D monthly adjustment amount based on their income (Part D IRMAA). This is due to monthly gross income is above a certain amount.
This payment is in addition to the Part D premium payment. Unlike the Part D payment, however, this payment is made directly to Medicare and not your health plan.
How will you know if you’re required to make this additional payment? Social Security will contact you if it’s found that you’re deemed to pay this fee.
This fee can be automatically deducted from your Social Security, or you’ll get a bill.
How to Make Late Payments
If you’re late or have missed a payment for your Part D prescription plan, there may be a few options available to you. Medicare has certain rules when it comes to late and missed payments, however, it’ll be up to your plan to choose how they proceed.
These are Medicare’s rules for late payments of Part D premiums:
- You can still receive coverage without penalties
- You’re granted a grace period and warning
- You receive a letter informing you to contact your plan for resolution
You must receive notification before a plan can drop you from your coverage. Grace periods can be granted and must be at least two months but can be more depending on which plan you have. The grace periods begin on day one that your premium hasn’t been paid.
The Plan Disenrolls You
Single Grace Period – When there’s been at least one payment that’s been unpaid during your grace period, your health plan can end your coverage at the end of the timeframe allotted.
Rollover Grace Period – If you’re behind on more than one premium payment but can pay a minimum of one payment owed during this grace period, the period will end. Your plan will then notify you of your new grace period to pay other premiums owed.
This will happen until allowed payments are paid off. If you fail to make a premium payment during this point, your plan can drop your coverage.
Can My Prescription be Moved to a Lower Cost Tier Group
If one or more of your prescriptions have been moved to a formulary tier that is more expensive, you may be able to contact your plan carrier and ask them to move your prescription to a lower cost tier.
My Medications Co-Payment is Higher than Retail Cost, Will I Pay More if I Use My Medicare PDP
No, between you’re planning co-pay and retail drug cost, you’ll always pay the lesser of the two. However, if the plans co-pay for your medication is $39 but the negotiated retail cost is $15, you’ll only have to pay the retail cost.
What is the Coverage Gap
Also called the Medicare donut hole, the coverage gap is a short-term limit on what your prescription plan will pay for the covered prescription medications. Every Medicare policy that covers prescription drugs has one, but not everyone enters it.
The probability of you reaching the gap will depend on the particular drugs you take, their costs, dosages, and whether they are generic or brand-name drugs.
You’ll enter the donut hole when you and your plan have spent a specified amount on the covered prescription medications, including the deductible in case your plan has one.
While in the gap, you’ll be responsible for most of the expenses resulting from your prescription drugs until you reach a certain out-of-pocket amount, then catastrophic plan coverage starts, and you’ll be out of the gap.
What Happens if I Cannot Afford my Prescription Medications
Medicare provides a program known as Extra Help or Low-income Subsidy, to qualified individuals with low incomes. If you’re a member of Medicare and meet the requirements of the program, you may qualify for the “Extra Help.” Those who qualify will get help paying for their Medicare Part D expenses which may include cost-sharing, deductibles, and premiums.
You can qualify for the Extra Help if:
- Acquire Supplemental Security Income benefits
- Qualify for Medicare and receive full coverage from a government Medicaid program
- You’re a member of a Medicare Savings Program