PRESCRIPTION DRUG PLANS
Medications are expensive, and they can put a significant hindrance on your financial state, especially if you must take more than one drug. Medicare offers beneficiaries prescription drug coverage through Part D plans or Medicare Advantage plans. It is an optional add-on, but it is highly recommended if you are taking or will be taking medication in the future.
What is Medicare Part D?
PRESCRIPTION DRUG COVERAGE OPTIONS
There are two main ways to receive prescription drug coverage. The first and most common way is through Medicare Part D. Medicare Part D is also known as the Medicare Prescription Drug Plan, but sometimes it can be referred to as a PDP. Medicare Part D allows you to add extra coverage to your Original Medicare, some Private Fee For Service plans, and Medicare Advantage Savings Plans. There are multiple plan options under Medicare Part D that work for different types of medications. If you don”t enroll in Medicare Part D when you are first eligible, or you decide you want it part of your coverage later on, you will incur a late enrollment penalty unless you qualify for the Extra Help program or have other creditable prescription drug coverage. The second way that people can receive prescription coverage is through a Medicare Advantage Plan. Some Medicare Advantage Plans offer prescription coverage as part of the coverage. Then you would not need the separate Medicare Part D add-on to receive reduced-cost prescription medications.
MEDICARE PART D COSTS
How much you pay for prescription drug coverage is determined by a few different factors. Each type of part D plan will have a monthly premium, annual deductible, copays and coinsurance, a coverage gap, and a catastrophic coverage phase. Premiums can vary based on income. For example, beneficiaries who are dual eligible may have a low or no premium because of their entitlement to Medicaid or LIS benefits. Some beneficiaries may also pay more for coverage if they have an elevated income. Additionally, there are copays and coinsurance for prescriptions, and the medications you take will determine your costs for these.
PROS AND CONS OF PRESCRIPTION DRUG PLANS
Part D is one of the four main parts of Medicare. However, is Part D really necessary? The answer differs based on your specific situation.
When it comes to your drug coverage, there are many different sources to choose from. Some beneficiaries have drug coverage provided by their employer or through retiree plans, other beneficiaries have their drug coverage included in their Medicare Advantage plans. Beneficiaries who have served in the military may have drug coverage through VA benefits. In these situations, a standalone Part D may not be necessary because these clients already have what is known as Creditable Coverage. Creditable Coverage is coverage that is at least as good as Medicare”s standard Part D plans.
If a beneficiary does not have Creditable Coverage and is taking medications, it would be necessary to have a Part D plan, either on its own or through a Medicare advantage plan. Remember, Medicare Parts A and B do not cover outpatient prescription drugs on their own which is why it is necessary to join a Part D plan. Medicare advantage plans can sometimes include Part D coverage under their umbrella of benefits. If this is the case, you would not need to join a standalone Part D plan.
The pros of having Part D include having additional protection against the elevated costs of prescriptions. Many everyday prescriptions can cost over $100 per refill. A Part D will help reduce these out-of-pocket costs. These plans also offer protection for the future. If someone is diagnosed with a chronic medical condition that requires many prescriptions to maintain, a Part D will drastically decrease the cost for treatments. Conditions such as diabetes, cancer, and even COPD can cost thousands of dollars per year to treat, and a Part D can save beneficiaries from having these thousands of dollars come out of pocket.
The cons include the premium, and inflexibility when changing plans. For people who do not take medications, or only take generics, the premium for a Part D can be more than the cost of their medications. There are also enrollment periods that beneficiaries are required to utilize when changing their plan. Many people see these details, and believe they do not need the plan, or that it will cost more out of pocket than the coverage they will gain. Keep in mind that the coverage which is best for you today may not be the best option for you a year from now, and you may take costly drugs in the future that you eventually need coverage for. If you do not pick up Part D when you are eligible, and do not have Creditable Coverage, you may be charged a late enrollment penalty or may be required to wait until the next valid enrollment period to get your coverage.
How it works with A+B
Prescriptions drug plans come in a few different packages. If you are receiving your Part D as a standalone plan, your coverage will pay separately from Original Medicare. Your pharmacy will bill your plan directly and should not involve Parts A or B in the process.
If you receive your benefits through a Part C plan, all of your benefits for hospital, medical, and prescriptions will come from the same plan. The pharmacy will bill your Medicare Advantage plan for your prescriptions. Your Medicare Advantage plan pays instead of Original Medicare.
Creditable Coverage is another means of obtaining prescription coverage. Some plans will pay instead of Parts A and B, and some plans will pay after. If you have Creditable Coverage, you will need to check with your benefits administrator to confirm how your plan will interact with Original Medicare.
How It Works with Other Types of Creditable Coverage
Part D generally pays instead of other types of coverage such as Tricare, VA, or other Creditable Coverage. Usually, beneficiaries can choose to use either their Creditable Coverage or their Part D plan to cover the cost of their medications with neither being supplemental to the other. However, it is the responsibility of your benefits administrator to explain the performance of your benefits.
Remember, if you have a plan that is considered creditable drug coverage, you may not need to enroll into a Part D plan. If you are uncertain about how your Creditable Coverage would work with a Part D plan, contact your benefits administrator directly for more information.
How to Enroll
HOW TO ENROLL INTO MEDICARE PART D
If you”re interested in joining a Medicare Prescription Drug Plan, you must first enroll in Medicare by either enrolling on the Medicare website, completing a paper enrollment application, calling the plan, or calling Medicare at 1-800-MEDICARE. Your Medicare Number and information about your Part A and B coverage will be required.
