What is Medicare (Part D)
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What Is a Medicare Part D Supplement Plan, and how does it work?
Medicare part D supplement plan is a federal program offered through private insurance carriers to provide drug coverage to consumers on Medicare.
2 ways to get drug coverage:
- Medicare Prescription Drug Plan (Part D): These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
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Medicare Advantage Plan (Part C): (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance)and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D) through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.
What Drug Plans Cover:
How does a Medicare Part D plan work?
Medicare part D is considered by many the most confusing part of Medicare. Since most people take a few prescriptions and we generally take prescriptions on a daily basis it is important to understand how it works.
Medicare sets a standard model for the insurance carriers to follow and that is why most plans look very similar. In the first phase most part D plans have a deductible phase. If you do not know what a deductible is? Basically it is the dollar amount set by the insurance company that you must pay before they start to pay. With most part D plans you will find that they cover drugs on tiers. Each tier represents a different cost sharing, so depending on which tier your drug falls on will decide how much each drug costs you. Typically plans have 4-5 tiers and the higher the tier the more expensive the drug. The majority of plans have some kind of drug deductible however the deductible will normally apply only to drugs labeled tier 3 or higher. Tier 1 and tier 2 drugs are generally common generic drugs and you should be able to get them without paying any deductible. Once you have met your plans deductible amount you will have copays or coinsurance to pay for all of your covered prescriptions.
Phase Two
This is considered the initial coverage phase; this is when your plan starts sharing prescription costs with you either in the form of a copayment or coinsurance. Usually the coverage phase extends to a point where retail cost of medication reaches 4,340.00 Once you meet this amount you start the next phase of coverage known as the coverage gap aka the Donut Hole.
Phase Three
During this phase you will receive a 75% discount on all covered drugs. This can be very expensive particularly for tier 3-5 drugs . This phase lasts until an individual has paid 7,050 at this point you enter the final stage of coverage. (There are some plans that cover generic drugs during the coverage gap)
Phase four
This phase is called catastrophic coverage phase and in this phase prescription cost comes down to around 5% of the retail cost. This phase lasts until the end of the calendar year.
Fortunately most people on Medicare never leave phase two, for those that do it can be quite expensive.
If you want to stay out of the coverage gap it is always a good idea to speak with your doctors about taking generic options when possible. Many drug manufacturers also offer prescription assistance for many of their expensive drugs and there are a few states that have off state pharmaceutical assistance programs that can help with costs.
Coinsurance = unlike a copayment with a defined dollar amoun coinsurance is a percentage of the actual drugs cost that a consumer will have to pay.
Tiers= Are the way Part D plans classify what a prescription will cost on their plan. Most plans Tiers 1,2 are generic drugs and Tiers 3,4 are name brands with Tier 5 being specialty drugs.
Quanty Limits >= this is when a Part D provider puts a number limit on how much of a prescription you can get typically in a 30 day period.
Step Therapy = Is a method Part D plans use to try and get a consumer to use a cheaper drug before they will approve a more expennsive one.
Donut hole or Gap = This is when you have reached a certain dollar amount in spending with your drug plan that moves you from a copay tiered system into coinsurance. When you enter this Gap you will be responsible for 25% of all drug costs.
SPAP or State Pharmacutical Assistance Program = This is a program that helps people pay for prescription drug costs. As of now there are 13 states that offer such programs, in NY it is called EPIC.
Medicare Part D Page Q & A
Does Original Medicare cover my prescriptions?
No original Medicare Part A & B do not cover daily prescriptions that you get at the pharmacy. Original Medicare will cover your medications taken while in the hospital, some vaccinations and infusions but not your daily medications.
How much will my Part D plan cost?
That really depends on a few things, most states will have twenty or so choices for Part D Plans and each one will have different premiums and out of pocket cost associated with them.
Currently in NY state there are 19 plans offered ranging between $10.90- $116.80
Will Medicare Part D cover all of my prescriptions?
Part D plans follow a formulary model from CMS (Center of Medicare & Medicaid Services) No plan will cover all drugs but each plan has to cover the minimum of two drugs in each therapeutic category. So you should be able to find a drug plan that covers the prescription you need. If you no one covers the necessary drugs you can file an appeal to have it covered by your plan.
Do I have to pay a deductible?
Many Part D plans will have a deductible in 2023 they can be as high as $505.00, but ot all plans have a deductible and many popular prescriptions can be purchased without having to meet a plan deductible.
What happens if I get a new drug prescribed in the middle of the year and my plan does not cover it.
If this happens you can do a few things, ask your doctor for a substitute that is covered. You can request a formulary exception. If they deny your exception you can file an appeal. Lastly you can change your plan if you have an enrollment period to do so.
What is the Medicare Part D penalty?
The Medicare Part D penalty occurs when someone who could have enrolled in Medicare Part D coverage but chooses not to enroll in a plan later. Those who enroll late will be assessed a life time penalty of 1% of the cost of the national average for a Part D drug plan for each month they were not enrolled.
What are drug tiers?
Drug tiers are simply the way that a Part D plan decides to classify their prescriptions. It is fairly typical for plans to have up to 5 tiers. Most plans Tier 1= preferred generic drugs tier 2 = non preferred generic drugs tier 3 = preferred brand names tier 4 non preferred brand name drugs and tier 5 = specialty drugs.
My doctor told me I should take vitamins to help with some conditions I have will my Part D plan help cover my vitamins?
NO most likely most Part D plans do not cover vitamins. The only one I see covered regularly if Vitamin D.