Part D Plans
Medicare Prescription Drug Plans
No matter if you are under 65 on Medicare or over 65, medications for many may be the single most important piece of their healthcare puzzle. Medicare Part D went into effect back on January 1, 2006.
Medicare does not sell Part D drug plans but they do regulate them. Medicare Part D prescription drug plans are available to anyone on Part A or eligible for Part B regardless of age.
Medicare Part D coverage can be found in stand alone plans for those with a Medicare supplement or original Medicare, and in most Medicare Advantage plans.
The Center for Medicare and Medicaid Services, determines which drugs are included on the Part D drug list. They also set maximum drug plan deductibles and create rules pertaining to enrolling into or switching Part D plans.
Part D drug plans are said to be voluntary. Once you are eligible to enroll in a Part D plan you are expected to enroll into one. If you delay your enrollment into a plan and later enroll, a penalty will be assessed and added to your monthly premium. This penalty never goes away. The time period to delay enrollment is not that long and isn’t widely known by many seniors new to Medicare.
When shopping for a Part D plan there are a few main things to consider. First and most importantly are all the prescriptions you currently take covered by the plan formulary? A formulary is the list of covered drugs for that particular Part D plan.
Does the plan have an annual deductible? If there is a deductible then you will not get co-pay pricing until the deductible has been met. Not all plans have the same deductible, and some have none at all.
When shopping be aware that just because a drug may be listed as Tier 3 on one formulary doesn’t mean that is won’t be a Tier 4 on another plan’s formulary. So it is important to look up each drug you take before you pick a plan. We do this for all of our clients so you don’t have to.
You can change Part D drug plans each year between October 15th and December 7th. This is the annual enrollment period. Any change you make during that time period takes effect on January 1st the following year. Part D drug plans have no health questions so you can change plans every year if your situation changes.
Each fall, usually in September, insurance companies will send out a letter called the annual notice of change or ANOC to their members of Part D plans. The purpose of this letter is to inform the customer of any changes that may have been made or that will be taking effect the next year.
Again, we can help insure that you are in the plan that best fits your needs from year to year.
There is also a component of Part D plans that impacts many people in a negative way. It is called the coverage gap and is also known as the donut hole. There is a period of time each year when you get co-pay prices for your prescriptions, based on which Tier level they are in. Once the contribution you and the insurance company make for your drugs hits a certain amount that ends the first period.
The next period is the donut hole. During this period you stop getting co-pay prices for prescriptions based on Tier level and instead pay a set percentage of the cost of the drugs. You stay in this phase until your actual out-of-pocket drug cost hit another level set by Medicare.
If you get into and come out of the donut hole and there is still part of the year left then the final phase is called catastrophic coverage. During this time you highly discounted drug prices for the remainder of the year. This cycle repeats itself at the beginning of each year.
There are 2 groups of Medicare beneficiaries that don’t have to worry about the donut hole and some of the other rules. Folks that are on Medicaid, and folks receiving extra help from Medicare for their drug plans.
Medicare supplements no longer include Part D drug coverage but at one time some did.
This overview of the Part D plans may still leave you with questions. Don’t worry that is where we come in. Give us a call or set up a time to meet with us and we will take care of you.