Questions About Medicare Part D
If you’ve been prescribed a medicine that is not on your Part D plan’s formulary (list of covered drugs), you can ask that your plan to cover it by requesting an exception to the formulary. This is the first step in a coverage determination. Your doctor will need to explain in writing the medical reasons why you need to take this drug. If your plan denies coverage, you can then file an appeal for the plan to reconsider its decision.
Yes, but you must alert Medicare in writing for this request. You’ll need to complete the Medicare Authorization to Disclose Personal Health Information form. The form verifies that your personal health information can be shared with select people that can speak with Medicare on your behalf.
Certain prescription medicines or treatments have rules that require that you to get approval or precertification from the plan before the plan will agree to cover the drug or treatment. In situations where your medication or treatment requires a prior authorization you will need to ask your doctor to contact the plan directly with the medical reasons why you need the medication or treatment covered. Make sure to check your plan’s formulary or summary of benefits to see if you need a prior authorization (PA) before you are treated or fill your prescription to avoid any delays.
You can switch plans mid-year under a Special Enrollment Period (SEP) only if you are eligible under certain situations otherwise you would have to wait for an Annual Enrollment Period (AEP) which runs from October 15 through December 7. To qualify for an SEP you would need to be eligible, for instance you move to a new service area or your existing plan no longer offers coverage. You should call Medicare to see whether your specific situation would allow you to switch plans.
A Special Enrollment Period (or SEP) are periods outside the Initial Enrollment Period (IEP) or the Annual Enrollment Period (AEP) when you may select a plan or change your current plan in certain circumstances. Examples of situations that may qualify you for an SEP include your losing creditable coverage, moving to a new service area or your existing plan no longer offers Part D coverage. You will need to call Medicare to find out if you are eligible for an SEP.
Part D is available to everyone with Medicare to help cover the cost of prescription drugs not otherwise covered by Medicare Parts A and B. If you are age 65, and eligible for Medicare Part A and/or enrolled in Part B, and a citizen or permanent resident of the United States you are eligible to enroll in a Part D plan. If you do not enroll in a Part D plan when you first become eligible for Medicare you may have to pay a late enrollment penalty for as long as you have Part D coverage. Read more about Medicare penalties here.
There may be two types of pharmacies in a Part D pharmacy network. A standard pharmacy refers to a pharmacy in your plan’s network where you can fill a prescription. A preferred pharmacy is one that works with your plan to reduce your copayment or coinsurance even more than at a standard pharmacy.
Part D plans must cover all commercially available vaccines (except those covered by Part B). If there is a new preventive vaccine, it may not appear in the formulary, but the plan may still cover the vaccine. You should contact your plan’s customer service to find out about the specific vaccine.
Vaccines covered by Part B:
- Hepatitis B (If you’re at high or medium risk of contracting the disease)
Step therapy is a type of prior authorization. With step therapy, you must first try certain less-expensive drugs, like a generic drug, that has been proven effective for most people with your condition, before you can move up a “step” to a more expensive brand-name drug.
If your earnings exceed a certain amount, you will pay an additional premium called Part D – IRMAA. IRMAA premiums start when an individual hits $85,000 in income, or when a couple filing a joint return has an income of more than $170,000. The Part D – IRMAA premium ranges from $12.70-$72.90. Read more here.
An HRA is a type of employer-funded health benefit plan that reimburses employees for out-of-pocket medical expenses. These accounts are funded by the employer and unused dollars remain with the employer . It’s a good idea to call your employer first before you switch to another plan.
Each Part D plan has a pharmacy network which is a group of pharmacies you can use to fill your prescriptions. A plan’s pharmacy network can include two types of pharmacies – standard and preferred. What you pay for your medicines will depend on the type of pharmacy you choose. Preferred pharmacies agree to charge less for certain prescription drugs. You may use any network pharmacy, but you will typically pay less when you use a preferred retail pharmacy or home delivery.
There are 4 stages to a Medicare Part D prescription drug plan.
• Deductible: You pay the full amount for your medications until you meet the deductible amount and your plan begins to pay its share of the cost for your covered drugs.
• Initial Coverage: Once you meet the deductible amount, you pay either a copayment or coinsurance for your medicines (depending on the drug tier they are on) and the plan pays the rest until you and the plan together meet an amount set by Medicare. This amount changes each year.
• Coverage Gap: The third stage of a standard Part D plan begins after you and your plan together exceed the amount set by Medicare. In this stage you will pay more for your covered drugs until you reach a certain amount, again set by Medicare. Your deductible, coinsurance and copayments all count towards getting you out of the Gap. The coverage gap is closing and each year the amount you pay for brand-name drugs will go down until it is 20%
• Catastrophic Coverage: Once you get out of the Gap, you automatically get “catastrophic coverage.” In this last stage of a Part D plan you pay a small copayment or coinsurance for covered medications for the rest of the calendar year. you fulfill the deductible amount and your plan begins to pay its share of the cost for your covered drugs.
You can enroll directly in a Medicare Part D prescription drug plan (PDP) by calling them directly or on their website. You can also enroll by calling Medicare directly. Before enrolling in a plan you should research the overall cost of a plan including the deductible (if any), the monthly premium and any medications you take. It’s also a good idea to call the plan with any questions you might have. You can visit a plan’s website or you can visit Medicare.gov to compare multiple plans.
The deductible is the amount you are required to spend for your medication before your plan begins to pay their share. If the plan you choose has a $400 deductible you will pay the full cost of your prescriptions until you’ve paid $400. Once you’ve met the deductible, you will be responsible only for the copayment or coinsurance required on future prescriptions. Not all Part D plans have a deductible. Learn more about Medicare plan costs here.
For more information about deductible costs and how they’ve changed in 2020, click here
A copayment is the fixed amount that you pay for each prescription depending upon the formulary tier it is on. Usually the lower tiers on a plan’s formulary have copayments. The higher tiers on a plan often have coinsurance because of the high cost of those drugs. Coinsurance is a percentage of the cost of a medication and can vary for each medication you fill.
There is no need to join the same Medicare plan as your spouse. Medicare covers individuals — it does not jointly cover husband and wife like some employer-provided plans. You and your spouse may have very different health conditions and medication needs that could require specific types of coverage. While you may be able to help each other in the selection process, always consider your individual needs when choosing a plan.
Drug manufacturers that make brand-name prescription drugs must sign agreements with Medicare to participate in the Medicare Coverage Gap Discount Program and offer discounts on brand-name drugs to people who’ve reached the coverage gap. This means that 50% of the cost of the drugs will be covered by the drug manufacturer and you and the Part D plan will pay a percentage. You can get these savings if you buy your prescriptions at a network pharmacy or order them through the mail. By the year 2020, the coverage gap will close and you will pay 25% for these covered drugs (including the dispensing fee), the manufacturer will pay 50% and the Part D plan will pay 25%.
There are many factors that affect a plan’s premium. It could be the number of drugs that are covered, the number of restrictions placed on those drugs, the deductible amount (if any) and the copayment or coinsurance amount that you will need to pay. Plan’s that offer low premiums are more likely to include less drugs on their formulary – known as a “skinny formulary” – or you may pay more for drugs because they are placed on a higher tier. When determining the cost of a plan you should consider all your costs including the premium, deductible and copayments/coinsurance for your medications. Learn more about Medicare Part D costs.
When you become eligible for Medicare Parts A and B you should enroll in a Part D plan to ensure you have coverage especially if you think your health status may change in the future. If you do not enroll in a Part D plan when you first become eligible you may pay a late enrollment penalty for the number of months you didn’t have coverage when you didn’t enroll. Read more about Medicare penalties here.
If you do not join a Medicare Part D plan when you are first eligible for Medicare Part A and/or Part B, you may face a late-enrollment penalty. You will have to pay this late-enrollment penalty for as long as you have Part D coverage. Learn more about the late enrollment penalty.
In a Medicare Part D plan, Stage 3 is called the Coverage Gap or the “Donut Hole.” You enter this stage after you and your drug plan together have spent an amount set by Medicare for your covered drugs. You continue in this stage until your out-of-pocket costs reach another amount set by Medicare. This amount includes your deductible, coinsurance and copayments in the Initial Coverage stage, the manufacturer’s discount you get on covered brand-name drugs in the Gap; and what you pay for medications while in the Gap. To learn more about the stages of Medicare Part D here.
You should consider all aspects of a plan before enrolling. Sometimes a low monthly premium is associated with high deductibles, high copayments (fixed out-of-pocket costs), or coinsurance (a percentage of the cost of a medication). However, plans with higher premiums may offer added benefits like $0 deductibles, preferred pharmacy networks, lower copayments, and/or discounts for using a home delivery pharmacy. The size of a plan’s drug formulary (the list of covered drugs) contributes to a plan’s cost. A plan with a smaller, limited formulary is likely to have a lower premium. However, that also means that you could end up paying a great deal of money if you need a medication that is not on their drug list. Lastly, the level of customer service provided is also reflected in a plan’s cost. Plans that offer specialized Medicare advisors may cost more, but those plans provide you with access to a higher level of specialized service.
A formulary is a list of covered drugs provided by a plan. Formularies may vary from plan to plan and the list of covered drugs can change from year to year. It’s a good idea to find out if your medications are covered before you join a plan or want to switch plans during the Annual Open Enrollment Period. You can usually review enrollment materials like the formulary online, call Customer Service, or request a formulary be mailed to you.
If you are taking prescription medications to manage a chronic condition such as heart disease, hypertension, high cholesterol or diabetes, always remember to check that the drugs you are taking are included in your plan’s formulary—that can save you a lot of money down the road!
While losing coverage can be discouraging and stressful, there are many affordable options available under Medicare that may provide you with coverage that better suits your needs and saves you money. Your employer may also offer a broker service to help you with choosing a plan. Keep in mind that if have a Health Reimbursement Account (an HRA) with your employer you should find out what you need to do so you don’t lose it.
With Medicare, you have many opportunities to choose plans that best suit your needs and your budget. Enrolling in Original Medicare (Parts A and B) and then selecting a stand-alone Medicare Part D plan allows you to choose a prescription drug plan that better meets your prescription drug and financial needs. Some plans offer a broader list of covered medications, cost-saving preferred pharmacy networks and/or convenient home delivery.
A Medicare Advantage Plan with prescription drug coverage can offer the convenience of having all of your health and prescription coverage bundled under one provider. However, this convenience may result in less choice and less opportunity to ensure the plan meets all of your prescription drug needs.
If you are turning 65 you have an Initial Enrollment Period (IEP) of 7 months to enroll in a Part D plan. You can enroll up to 3 months before the month you turn 65, the month of your 65th birthday, and up to 3 months after the month you turn 65. In general, you can switch plans each year during the Annual Enrollment Period (AEP) from October 15 through December 7.
Medicare Supplement Insurance, also called Medigap, are plans offered by private companies that help cover some costs not paid by Original Medicare (such as deductibles and copayments). There are 10 supplemental plans that offer a variety of additional options. Get more information on choosing the right Medicare plan here.
You can speak with a licensed insurance broker or agent free of charge. There are also additional resources you can turn to like Medicare.gov, the Medicare & You handbook and your State Health Insurance Assistance Program (SHIP). If you are losing employer-provided coverage, your employer may make a broker available to you who can discuss various options.
Many Part D plans offer Medicare advisors who can answer questions about the plan and help you determine if the plan will meet your needs. Calling the plan before you enroll is a good way to determine how the plan will treat you in the future.
What you pay for your medications will depend on the drug tier your medication falls on. Most plans have 4 or 5 tiers (or levels). Your cost-share (copayment or coinsurance) for each tier is determined by your plan. Drugs in Tiers 1 and 2 are typically generic drugs that will be lower in cost and have a fixed cost or copayment. Brand-name and specialty medications will be in higher tiers and require you to pay a coinsurance amount. This is usually a percentage of the drug cost and depending on the tier and the medication what you will pay can vary.
If your pharmacy is in the plan’s network you can continue to use that pharmacy. Otherwise, you may have to pay the full cost of your medications. A plan’s pharmacy network can include two types of pharmacies. What you pay for your medicines will depend on the type of pharmacy you choose. Preferred pharmacies agree to charge less for certain prescription drugs. You may use any network pharmacy, but you will typically pay less when you use a preferred retail pharmacy or home delivery. Check with the plan before you enroll to see if your pharmacy is in its network and, if so, if it offers preferred pricing.
There are ways to effectively delay reaching the Coverage Gap or “donut hole.” You enter the Coverage Gap when your total prescription costs (your deductible and copayments in the initial coverage stage plus what the plan pays) exceed the amount set by Medicare each year. The best way to delay reaching the gap is to keep your pharmacy costs down. Here are some ways you can do this:
- Use generic medications when available and appropriate for you. Generics cost a fraction of the price of their brand-name counterparts, and many Medicare Part D prescription drug plans (PDP) offer $0 or low copayments when you use a generic medication. Talk to your doctor or call your plan and ask for help in finding lower-cost alternatives for your brand-name medications.
- Take advantage of a home delivery pharmacy for your long-term medications and use a preferred pharmacy when possible. Choosing a preferred pharmacy helps to lower your costs.
Medicare created the Star Ratings system to help you compare quality and performance among Medicare Part C (Medicare Advantage) plans and Medicare Part D prescription drug plans (PDPs). Medicare determines the ratings each year, evaluating a plan’s performance in more than 50 areas across 4 broad categories. These categories range from customer service to patient safety. Medicare assigns them a rating of 1 to 5 stars. This provides a current and unbiased measurement of a plan’s overall performance.
Star Ratings are an important factor to consider when choosing a plan. They take the guesswork out of selecting a trustworthy plan by telling you if the plan is likely to offer high quality.
In general, you should look for plans with a rating of 3 to 5 stars. At Medicare.gov, you can view the details of a plan’s Star Rating to see how well it performs in each category. If the plan you like has low ratings, review the Star Ratings details to make sure it’s a good choice for you.