What are the Costs of Medicare Part D?

Coverage Gap (donut hole) 
begins once you reach your Medicare Part D costs plan’s initial coverage limit and ends when you spend a total of $6,350 in 2020.

In 2020, Part D enrollees will receive a 75% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 75% discount paid by the brand-name drug manufacturer will apply to get out of the donut hole.

For example: if you reach the donut hole and purchase a brand-name medication with a retail cost of $100, you will pay $25 for the medication, and receive $95 credit toward meeting your total out-of-pocket spending limit.

Medicare prescription drug costs vary by policy, based on the list of covered drugs, also known as the plan’s formulary. Policies that cover prescription drugs usually put covered drugs into cost tiers, with individual cost-sharing for the medications on each tier.

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.

What is the Medicare Part D Formulary for 2020?

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.

Covered Prescriptions:

• Certain vaccines
• Insulin and all the equipment associated with insulin injection (needles, gauze, syringes, and alcohol swabs)
• Barbiturates
• Benzodiazepines
• 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.

1. Preferred Generic
2. Generic
3. Preferred Brand
4. Non-Preferred Drug
5. Specialty Tier

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.