During the month of August, we have tried to cover the subject of Medicare in little bite-sized bits. One at a time, we went over the Parts of Medicare, Original Medicare and Advantage Plans (also called “Part C”). Today’s Medicare Minute covers Part D, the prescription drug coverage plans available.
At first glance, seniors might think this is a straight-forward subject, but it is not! For many seniors, Part D is the cause of confusion, worry and expense, sometimes considerable expense. There are hundreds of Medicare Part D plans, each with its own formulary (a list of covered drugs), copays, deductibles and “tiers” of coverage. In addition, Part D still includes the famous coverage gap or “donut hole” you have probably heard about.
Here is the good news, any one of several OurSeniors.net Family Partners or Approved Vendors can be a great help in choosing the best Part D plan for your situation. As you will see, this can vary widely from one senior to another, including between spouses.
Let’s start with some simple facts about Medicare Part D:
- Medicare Part D covers outpatient prescriptions you fill at a pharmacy (or by mail order).
- Any senior eligible for Medicare is eligible for Part D coverage.
- All Part D Plans are run by private insurance companies under Medicare guidelines, and monthly premiums are paid to the insurance company sponsoring the plan.
- Higher income seniors may pay higher premiums (as with Part B).
- Not taking Medicare drug coverage when you are first eligible can be a costly mistake. If you wait, you will pay a late enrollment penalty if you join later (unless you have other “creditable coverage”” or are getting Medicare Extra Help). Failure to enroll at the proper times will result in a lifelong penalty of 1% per month for every month you delay.
- You may enroll during the Initial Enrollment Period or a Special Enrollment Period (available if you have creditable alternative drug coverage), and you can change plans yearly without penalty.
- Part D Plans are structured to include various combinations of premiums, deductibles and copays, along with a formulary that lists covered drugs.
- Formulary drugs are assigned to “tiers,” that determine the levels of coverage; generic drugs are in the lowest tiers and specialty, still-on-patent drugs in the highest ones.
If you are confused by those “simple facts,” you are not alone. Part D is so complicated, partly because the drug needs of seniors can vary so widely. Even within a married couple, you can find that one spouse is taking very expensive, newer drugs while the husband or wife needs only less costly, or no medications at all. Also, a senior’s drug needs can change rapidly if they are diagnosed with a new medical problem.
The so-called “donut hole” in Part D has been a problem for many seniors. The donut hole is a coverage gap, meaning that after you and your drug plan have spent a certain amount of money for covered drugs, you must pay all costs out-of-pocket for your prescriptions up to a yearly limit. Then the yearly limit ends, and your drug plan helps pay for covered drugs again. This is like a home-owners policy that covers your house for the first $100,000 in damage and all damage after $200,000. What about the damage between the two? That would be a homeowners donut hole, and no insurance company would sell such a policy.
Recent changes to Medicare are closing the donut hole gradually. However, the subject of the donut hole is complicated enough to require expert advice in dealing with it (see below). Some seniors are eligible for the Medicare Extra Help program, a federal program that helps pay for out-of-pocket costs of Medicare prescription drug coverage (also known as the Part D Low-Income Subsidy). Again, you should consult a trustworthy advisor for information about this program.
There are two ways to get Part D prescription drug coverage. If you are covered by Original Medicare (see our Aug 14 article, “Original Medicare”), you should purchase a Medicare Prescription Drug Plan (Part D) from your insurance carrier. These plans add drug coverage to Original Medicare. If you are in a Medicare Advantage Plan (see Medicare Advantage Plans), you get all your Medicare coverage (Part A, Part B and Part D) through that plan.
When choosing Medicare drug coverage, you should consider the drugs you are now taking, possible extra protection from high prescription drug costs, whether you take a lot of generic prescriptions and if you want coverage to avoid future penalties. If you want the extra benefits and lower costs available by getting health care and prescription drug coverage from one plan, and you are willing to accept the plan’s restrictions on what doctors, hospitals, and other health care providers you may use, Advantage plans may be the way to go.
The bottom line for comparing Medicare Part D plans is that there is not one, best answer. It depends on the individual senior, how much the deductible and copay expenses are and what health care choices are in a given plan’s network. Will the senior need expensive medications or costly drugs?
Several of the OurSeniors.net Family of Approved Vendors and Partners can help you or your senior loved one make this decision. They are:
- Murray Insurance Agency – 321-233-2424 – Murray Webpage/ OurSeniors.net
- Humana Health Insurance – Humana Webpage/ OurSeniors.net
- Volusia Office – 386-200-4191
- Colonial Dr. (Orlando) – 407-519-9626
- Altamonte Springs – 407-519-9627
- Kissimmee – 407-204-9767
- Toll Free English – 855-567-9358
- Toll Free Spanish – 855-622-5419