Part D Prescription Drug Plans
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Part D
Prescription Drug Plans
Part D Prescription Drug Plans help with the costs of medications prescribed by your doctor. There are two ways to get Medicare prescription drug coverage–either through adding a Medicare Prescription Drug Plan (Part D), or getting a Medicare Advantage Plan (Part C) that offers Medicare prescription drug coverage. This offers you multiple ways of managing your prescription drug coverage.
Prescription Drug Plans
Medicare Prescription Drug Plans Have Rules:
- Formulary: Prescription Drug Plans have lists of drugs they will cover, called a formulary. Drugs are placed into different “tiers”…each tier will have a different cost. A drug in a lower tier will cost you less than a drug in a higher tier.
- Prior authorization: You and/or your prescriber must contact the drug plan before you can fill certain prescriptions. Your prescriber may need to show that the drug is medically necessary for the plan to cover it.
- Quantity limits: Limits on how much medication you can get at a time.
Step therapy: You must try one or more similar, lower cost drugs before the plan will cover the prescribed drug.
If you or your prescriber believe that one of these coverage rules should be waived, you can ask your plan for an exception.
(LEP)
Medicare Part D Late Enrollment Penalty
The late enrollment penalty is an amount added to your Medicare Part D monthly premium. You may owe a late enrollment penalty if you go without Part D or creditable prescription drug coverage for any continuous period of 63 days or more after your Initial Enrollment Period is over.
Part “D”
Medicare Model for Drug Coverage
Insurance companies that offer Medicare drug coverage must be equal to or better than the Medicare Model for Drug Coverage. The model consists of three stages:
- Deductible Stage: Medicare sets the annual limit of what plans can charge for a deductible. The insurance companies can charge anywhere from $0 to the full allowed amount for the deductible stage.
- Initial Coverage Stage: The Medicare model sets the drug coinsurance cost at 25% for all medications up to the annual maximum out of pocket. The maximum out of pocket changes annually and is set by CMS for each calendar year. The insurance companies must, on average, be equal to or better than the model. Companies have the option to charge different amounts for medications but on average, the cost to Medicare beneficiaries must be 25% or less for medications. Many people pay much less than the 25% model. Plans vary based on what state and county you live in. It is very important to review your drug coverage to ensure you are not overpaying for your medications.
- Catastrophic Coverage Stage: Once you have hit the maximum out of pocket limit, you will pay $0 for the remaining calendar year. January 1st of the following year, you will restart in the deductible stage.
Part D and Part C plans that cover prescription drugs can charge very different amounts for the same medication. The insurance companies have to follow the model that Medicare sets but they have a lot of flexibility when it comes to the actual costs to the members. It is very important to review your medication costs with a broker or CMS to ensure you are not overpaying for your medications. The Extra Help Agency is able to assist you with keeping your medication costs as low as possible.
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