Medicare Part D Plans
Medicare Part D is a powerful prescription drug plan that is obtained through private insurers. It is a retail prescription drug plan that is offered to beneficiaries of Medicare. Prior to the release of Part D, seniors were spending thousands on the medications that they had prescribed by their doctors. Each year, seniors were going broke just to try and stay healthy. So, instead of forcing so many people into paying drastic amounts of money for needed medications, Medicare Part D plans were created.
This plan is one that you can enroll in as a standalone plan, or you could have it introduced to you through an Advantage plan by Medicare. Either way, this drug plan is a strong addition to Medicare coverage and should earn the respect of many after this informative article.
How Does Part D Work?
Before explaining how Medicare Part D plans work, we want to give a better definition as to what it is. Put simply, it is prescription medication insurance. You have a monthly premium that you are responsible for paying, and you are paying a private insurance company, not Medicare. Paying this premium grants you access to the network of the insurance carrier, connecting you to a list of pharmacies that honor the plan. You will have a co-pay/percentage of the cost of the prescribed drugs that come out-of-pocket, but you won’t be paying the full price. The rest of the costs are covered by the insurer.
The insurance card for Part D is separate from Medigap plans.
These Part D plans are regulated under federal guidelines. This means, if a company wishes to sell a Medicare Part D plan, then they must first submit it to the Centers for Medicare and Medicaid Services. They must do this with every plan every year. If approved, they are able to sell the plan. If not, back to the drawing board.
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The Way it Works
Annual Deductible
$435 is the allowable 2020 Part D deductible. You will find plans that charge you the full deductible, no deductible, or partial deductible. Until the point you have satisfied the required deductible, you are to pay discounted prices for medications. Afterward, initial coverage begins.
Initial Coverage
You are required to pay a co-pay on your medications during this Part D stage. There are tiers that separate each drug plan, and each tier has a co-pay amount that you will be required to pay. For instance: You may have a $7 co-pay for first-tier medications that are generic assigned by a plan. You could have a brand name that is preferred on tier 3 that has a $40 co-pay, etc. The spending is tracked until both you and the insurer spend $4020 in 2020.
Coverage Gap
The coverage gap begins once that initial coverage limit of $4020 is met. During this stage, there is a retail cost of 25% for medications. Spending in the gap continues until an amount of $6350 has been reached for 2020.
It should be noted that Medicare tracks the total cost of what is spent by you and the insurance company. However, in order to escape the gap, they are only tracking what has been paid in co-pays, deductibles, and gap spending during the year. This includes discounts from manufacturers. Federal government contributions are not counted.
Catastrophic Coverage
When you reach the end of the gap, for the remainder of the year, your plan will begin to cover 95% of the medication’s costs. If your medications are expensive, this is a feature on Medicare Part D plans that aid in the spending limitations.
Your Part D Spending is Tracked by Medicare
The true out-of-pocket costs you have been tracked by Medicare. This is to help prevent you from paying twice at certain costs. As an example, say that the deductible of one plan has already been satisfied. Then, mid-year, you switch to a different Part D plan because of an out of state move. The new plan will still recognize that you have paid that year’s deductible. The catastrophic coverage and gap work pretty much the same.
January 1st of each year, Part D drug plans can undergo changes. The plan’s benefits, networks, premiums, co-payments, co-insurances may be subject to change. If you desire to change your plan, Medicare does provide an AEP (Annual Election Period). During this period of time, changes to your Part D plan can be made.
Rules for Part D Coverage
Medicare will allow carriers of this drug plan to make up rules for containment of costs and safety reasons. The most common of these rules that you may encounter are:
- Quantity Limits- This is an amount of restriction for how much you can purchase during a refill. If more than the quantity limit is prescribed, then an exception form must be filed to show why it is needed to have more.
- Prior Authorization- This is a requirement that your doctor, or you, may have to obtain approval prior to a pharmacy to dispense your medications. The insurer may ask for some evidence that shows this medication is medically needed before they will allow it to be sold. This is usually for medications that are especially expensive or potent. It is your doctor’s responsibility to show why these medications are needed, and others would be less effective or more harmful.
- Step Therapy- Step therapy is when the plan will require you to experiment with less expensive drugs. These drugs will treat the same conditions and are oftentimes required to be used in order for a company to consider the prescribed medication’s coverage. Should the alternative medicine work, then the money is saved for both the insurer and beneficiary. Should it not, then the doctor must explain why the more expensive medication is needed, oftentimes being required to show that the cheaper brands tried and failed.
These restrictions can affect your overall prescription costs. You should always check your medications for restrictions that may apply to the more important ones.
Part D Drug Plan Restrictions
They are most common with medications for pain, opiates, and narcotics. So, in other words, you can expect a lot of extra paperwork if you are on a good amount of pain medicine. These restrictions are most common with these three types of medications, and they occur throughout every Part D plan.
People are under the misconception that changing from one plan to a different one will help. However, there are restrictions on nearly all Part D plans in reference to pain meds. Regardless of the chosen plan, you will see this. Your only option is to just settle for the lowest annual spending estimate and fill out the proper forms to get as much as you can be approved.
You will encounter some medications that are just not covered by Medicare Part D plans. If you require a medication that isn’t covered, like a compound medication, then you will have to file for an exception. This exception will allow approval for that drug. Not all exceptions are accepted, though. You may be required to pay out-of-pocket for medications that your Part D doesn’t cover, or more specifically, your plan.
These plans are some of the most confusing of Medicare. It isn’t uncommon for people to sign up for a plan without double-checking if their medications would be approved. Sometimes, they even miss that step therapy rules apply to one of their needed medications. Beneficiaries can also oftentimes miss their window for enrollment. This window is important if you need solid drug coverage.
Medicare Part D FAQ
Q. Is there a monthly premium for Part D?
A. Yes, a monthly premium does come with a Part D drug plan. This premium is paid to the private insurer that provides the plan. The only time you wouldn’t have to pay for this plan is if you qualify for the Extra Help Program by Medicare.
Q. How Much is the Medicare Part D Cost?
A. The private insurers that sell these plans also set their premiums. In many states, you can find a Medicare Part D plan for around $15 a month.
Q. When am I eligible for Medicare Part D?
A. When you are enrolled in either Part A or/and Part B, you are able to enroll in Part D. The plan’s service area restricts you so you must live within it.
Q. Should Part D be skipped?
A. Honestly, no. Why risk going without coverage when many stats have plans that are available for low monthly rates? This plan does more than cover your medications today, it ensures you for any medication your doctor may prescribe you at a future time. While it is an optional coverage, it is not advised to ignore it.
There are several medications that can cost hundreds, if not thousands, of dollars a year. Some cost that in months. With a powerful prescription drug plan, like Part D, you can drastically cut those costs down and make affording your medication easier.
When you are shopping around for Part D plans, make sure you pick an insurer with plenty of perks, a relevant network, and a fair price. You want to compare these plans, prices, and providers carefully, as your savings depend on it. Medicare Part D plans can save seniors thousands of dollars a year on the medication that they need the most.
