Medicare Part D
What is it? Medicare Part D is the optional prescription drug coverage available by private companies contracted with Medicare. If you have Original Medicare Part A and/or Part B, live in the service area, you can sign up Part D. Part D is optional, however, if you do not sign up when first eligible, you’ll likely pay a penalty when you enroll in a Part D plan. There are 2 ways to get prescription coverage:
- Stand Alone Prescription Drug Plans. These plans, also known as PDP (prescription drug plans), can be work with Original Medicare (and a MediGap plan if you have one) to provide prescription drug coverage.
- Medicare Advantage Prescription Drug Plan, also known as MAPD. These Part C plans include your Original Medicare Part A and Part B benefits and add Part D prescription drug coverage along with additional benefits.
Prescription Drug Plan coverage: Part D plans have a formulary, which is a list of covered medications. On the formulary must be at least 2 covered medications for each disease class. MAPD’s and PDP’s plans can vary on:
- Premium – this can vary upon formulary, deductible, coverage during the coverage gap.
- Formulary – can be basic or expanded
- Deductible – if there is one and how much it is, and which tiers apply to it
- Copay amounts
- Tiers – some plans may only have 4, others may have up to 6 tiers, each tier has a copay or coinsurance amount depending on the cost of the medication.
- Pharmacy – Retail vs. Standard. Costs at a retail (or in network) pharmacies will be cheaper than at standard pharmacies. Also, some plans may have lower costs thru mail order.
Prescription Drug plan designs, formularies, and premiums change every year, so it pays to review them at least once a year. Part D Plan Coverage Limits: All Part D prescription plans have the same general coverage:
- Deductible – some plans have an annual deductible that you must meet before the prescription coverage starts.
- Coverage – once you meet the deductible (if there is one), you have a certain amount of prescription coverage. Every year this amount changes (click here for more information. ) When you fill a prescription, you pay a copay or coinsurance. Once the coverage limit is met you have used up your coverage
- Coverage Gap – (also known as the Donut Hole) is the phase of Part D when your copays and the share the insurance carrier has paid has exceed the Coverage limit set by CMS every year. In the donut hole you pay all the costs of your medication until you reach the annual limit. Once that happens you have gotten out of the donut hole. The donut hole will be closed by 2020, passed as part of the Affordable Care Act.
- Catastrophic Coverage – once you have reach this portion of Part D benefit, your costs are reduced substantially.
Ways to reduce prescriptions costs:
- Shop your Part D plan every year. Premiums, copays and formularies change every year make sure you are getting the right plan for your medications.
- Talk with your physician about lower cost medications
- Use retail or mail order pharmacies
Enrollment There are enrollment periods that you may join, change or leave a Prescription Drug Plan (PDP). Initial Coverage Election Period- (ICEP) You may elect to join a PDP plan when you are first enrolling into Original Medicare. Your ICEP window is 7 months long around your 65th birthday. You may join 3 months before your 65th birthday, the month of your birthday and 3 months after your birthday. If you are disabled and receiving Social Secuity benefits, you have a 7-month ICEP window around the 25th month that you have been collecting SSDI benefits. Annual Election Period (AEP) – AEP runs every year from October 15th – December 7th. This is time to add, drop or change your Prescription Drug plan for the next year. Every October 1st Prescription Drug plans release the next year plan benefits. It pays to compare your current plan with the new plans to make sure you are maximizing your Medicare benefits. Open Enrollment Period (OEP) – OEP, starting in 2019, will run from January 1st – March 31st. It gives you one chance to make a like to lie plan switch. Special Election Period (SEP) – once you have enrolled into a Prescription Drug plan, you are typically in that plan until the next AEP. However certain circumstances can open a special enrollment period, such as moving outside the plan’s service area, being Dual Eligible for Medicare and Medicaid, receiving prescription assistance from the federal government, and several others. You may have a SEP and not realize it. Our trained agents can assist to see if you qualify for an SEP. Penalty If you don’t enroll in a prescription drug plan when you are first eligible, you could have a penalty when you choose to enroll. If you lose creditable drug coverage and you don’t enroll in a MAPD or PDP plan you could be assessed a penalty for as long as you have drug coverage. The penalty timeframe starts from when you could have enrolled but didn’t until you do. Note – PART D IRMMA – If you make above a certain amount on your IRS adjusted gross income your PART D premiums could be higher.