Prescription drugs can make up some of the biggest expenses on an individual’s health insurance plan. Medicare Part D was created as a way to help millions of Medicare beneficiaries subsidize and offset the cost of their medications. Medicare Part D is its own plan, separate from your other Medicare coverages, but for many it is an important and life-saving part of their day to day healthcare. While Part B only covers a few types of prescriptions (such as cancer drugs), Medicare Part D covers a variety of medications.

» What does Medicare Part D cost?

Since some individuals will have different prescription needs than others, there are a variety of Medicare Part D plans to choose from. Keep in mind that there are two main ways to enroll in Part D.  First is a separate Part D Prescription drug program, in 2020, the average premium was $30, your premium will be higher or lower depending on which plan you select.The advantage of having a separate Part D drug plan is that it’s independent of your health plan and you can switch depending on your prescription needs. People who enroll in a Medicare Supplement also enroll in a Part D Prescription Drug Plan. The second way to access a prescription drug plan or PDP is a Medicare Advantage Prescription Drug Plan, also known as a “MAPD”. If you opt for a MAPD it’s very important that you make sure that the carriers formulary has your unique prescriptions.

Additionally, you want to make sure that every year you do a prescription drug match with all available MAPD plans in your area. People often select a MAPD plan that might have a zero copay for their primary care physician rather than the carrier that has a $5 copay and in-turn end up with thousands of dollars of out of pocket drug cost.

» What does Medicare Part D give me?

By design, Medicare Part D is a plan that helps you greatly reduce the costs of your prescription drugs. Even though Medicare Part D helps you pay for your medications, you still may share in the costs by paying for deductibles copayments and coinsurance.

The First Phase of cost sharing is your deductible. Some plans waive the deductible for generics only, some waive the deductible entirely and some reduce the maximum allowable deductible set by CMS which is $435 for 2020.

The Second Phase of Cost sharing is during what is known as your Initial Coverage Phase or “ICP”.  Insurance carriers categorize drugs into Tiers.

Tier 1: Preferred Generic (this is often free of charge or a couple dollars).

Tier 2: Generic (usually less than $10 and often carriers waive the deductible if they have one).

Tier 3: Preferred Brand (usually around $40)

Tier 4: Non-Preferred Drugs (usually 40% coinsurance)

Tier 5: Specialty Tier (Often Injectables-usually about 25%-33%)

Tier 6: Select Care Drugs (Often IV- can be 0-33%)

Usually your copayments and coinsurance will be less when using the Plans Preferred Pharmacies.

The Third Phase is known as the coverage gap or the doughnut hole. This happens when both you and the insurance carrier have spent $4,020 in 2020. The Good news is that the cost in the coverage gap has been shrinking each year under Medicare Payment Reform (MACRA) so your out of pocket is actually now about the same as the Second Phase or ICP. You’ll be paying no more than 25% plus a portion of the dispensing fee. For Generics you’ll be responsible for 44% in 2020 and 37% in 2019.

The Fourth Phase is known as “Catastrophic Coverage” which limits your expenses the most- 5% of the cost! The good news is that a combination of payments and manufactured discounts gets you to the Catastrophic Coverage Level:

• What you pay
• What the insurance carrier pays
• The manufacture discount

Once the amount of the discounts and payment by both you and the insurance carrier reach $6,050 for 2020 and $5,100 in 2019 you will be able to benefit at the Catastrophic Coverage Benefit Level of Coverage.

*Please note that if you’re taking prescriptions that aren’t part of the carriers Formulary Drug list than you will not have any coverage unless you receive a Formulary Exception. This is why it’s important to run your drugs by multiple carriers to determine the best overall value based on your specific drugs.

» How do I switch Medicare Part D plans?

Switching Medicare Part D plans is simple. Insurers recognize that your prescription drug needs will change as you get older and one Part D plan might not be as effective as another later on.You can select a new plan during the annual Medicare Part D “open enrollment period” which starts October 15th and goes until December 7th. Make sure to look at the cost of your plan and the prescription drug formulary list since these may change year to year.

You can always call our offices at 1-800-356-3615 and speak to a live agent if you have any questions.

» How do I apply for Medicare Part D?

To apply for Medicare Part D you have a couple of options:1) You can use the Part D Plan Finder provided by Medicare.gov which allows you to input all your prescription drug needs and can help you compare different Part D plans.

2) You can call our offices at 1-800-356-3615 and speak to a live agent who can answer all your questions help you get started with an application.

3) Also, you can call a representative from Medicare.gov over the phone by dialing 1-800-MEDICARE (1-800-633-4227).

» Am I eligible for Medicare Part D if I’m under 65?

If you are eligible for Medicare then you are also eligible to receive a Medicare Part D prescription drug plan. Individuals who are under 65 and have a qualifying disability or an End-Stage Renal Disease (ESRD) may be eligible to receive Medicare coverage as well as a Part D drug plan. Please call our offices at 1-800-356-3615 if you have any questions.

To get a quote for a Medicare Part D prescription drug plan please have a list of all your current medications on hand. Once you are ready, please give our offices a call at 1-800-356-3615 and one of our agents can help you find a plan that best suits your Rx needs.

*Beneficiaries in Medicare Part D prescription drug coverage plans pay premiums that vary from plan to plan. Beginning in 2011, the Affordable Care Act required Part D beneficiaries whose modified adjusted gross income exceeds the same income thresholds that apply to Part B premiums to also pay a monthly adjustment amount. In 2020, the adjustment amount ranges from $13.00 to $74.80.

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