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Part D


Part D

Or as most people know it as their Prescription Drug plan. Everyone with Medicare is offered prescription drug coverage.

Why do drug plan costs vary?

Drug plan costs vary based on :

The drugs you use 

The plan you choose

The pharmacy you choose

Most Medicare Prescription Drug Plans charge a monthly fee. You pay this in addition to the Medicare Part B premium. If you have a Medicare Advantage Plan (Part C), your Part D premium could be included in that plan.

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Medicare Part D

Medicare Part D is the part of Medicare that covers prescription drugs.  Medicare Part D is run by private insurance companies and has rules and regulations set by the Federal Government.  It is truly, one of the most complicated parts of Medicare to understand. 

The biggest mistake many people make is to choose their plan based on the premium cost or based on a recommendation from a friend or neighbor.  If you choose your plan based on cost alone or choose a plan just because someone said their plan was great, doesn’t necessarily mean it will meet your needs.  Choosing a plan, based on this criteria could end up costing you hundreds or even thousands of dollars more than is necessary.   In Texas alone, there are over 25 different drug plans available, and each has a different formulary (a list of drugs they cover), with a different cost for each drug, and different tiers that drugs falls into.  In addition, some plans require prior authorization on certain drugs, or quantity limits, while others do not.   All these factors will have a big effect on what you pay for your prescriptions.   One plan may have $0 deductible, while another one has a $360, $250, or another deductible amount. 

Things to consider before selecting a drug plan:

Prescription drug plans change every year, so it is important to review your coverage each year and look for changes in their formulary (list of drugs covered), deductibles, tier changes.   A certain drug may be covered one year by a company and next year they do not cover that drug anymore.  Also a common thing that happens is companies change which tier drug fall into.  One year your drug may be in a tier 1 with a $0 – low copay, and the next year it is moved to a tier 4 with a much higher copay.  Each fall prior to the Annual Election Period, companies will send out any changes they will be making in their drug plans for the upcoming year.  It is important to always check this out, because changing to a different plan may be beneficial to you.

Every drug plan has a “coverage gap” or “Donut hole”, which is mandated by the Federal Government.  This gap is slowly closing and will be closed entirely by 2020.  Until that time, once your Total Drug Costs reach $3310 (for 2016), you will be in the “coverage gap” or “donut hole” which means you will pay a percentage of your drugs (standard is 45% for brand and 58% for generic).  You stay in the “Coverage Gap” or “Donut hole” until your Out-of-pocket-Costs reach $4850.  Once you reach this, you enter the “Catastrophic Coverage” stage.  Once you are in the “Catastrophic Coverage” stage, you will pay a small co-pay or co-insurance.  The standard is the greater of,  5% or $2.95 for generic, and $7.40 for other drugs.  Each year in January you begin fresh.  If you get to your Catastrophic stage in the later part of the year, you will have to start over Jan 1 and meet the stages again for the new year.

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When can I enroll in Part D?

Anyone who is entitled to Medicare Part A or enrolled in Part B can join a Medicare Part D prescription drug plan.   Different Prescription drug plans are offered in different areas with different premiums.  It is important to see which plan options are available in your area.  Many people make the mistake of not buying a Prescription Drug Plan when they are first eligible, especially if they do not take any prescription medication or very little.  It is important to know that if you don’t enroll in Part D when you’re first eligible, and you don’t have drug coverage that is at least as good as Medicare’s (creditable coverage) for 63 days or more, you will likely have to pay a premium penalty if you enroll in a Part D at a later date.  While SEPs let you enroll in Part D outside of a standard enrollment period, you will still owe a premium penalty for late Part D enrollment in many cases.  There are two exceptions:  You will not owe a penalty if you qualify for Extra Help (a federal program that helps pay for most of the costs of Part D drug benefits or if you can prove that you did not receive adequate information about drug coverage.

When can I change my Part D plan?

You can change to a different Prescription Drug plan during the Annual Enrollment period, which is a seven week period from Oct. 15th  thru Dec. 7th of each year.   If you receive Medicaid coverage as well as Medicare, you can switch Part D plan at any time, or if you are a resident in a Long Term Care facility, like a Nursing Home, you can also switch at any time.

There are additional Special Enrollment Periods for certain circumstances.  For a complete list of these, go to Medicare.gov, or contact us and we will help in any way we can.

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