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Did you know that seniors are responsible for 77% of all prescription drug purchases?http://kff.org/medicare/fact-sheet/the-medicare-prescription-drug-benefit-fact-sheet/
Medicare has several moving parts (pun intended) that are all essential to having great health coverage. While Medicare Part A covers hospitals and Part B covers Doctors, the last piece of the puzzle is prescription drug coverage. Medicare Part D, the prescription drug coverage part of Medicare, is administered by insurance companies and plans vary in cost and coverage. Your premium is paid directly to the insurance company and the company will provide you with a card to bring to the Pharmacy. It is required all Medicare beneficiaries have creditable drug coverage.
Eligibility & Enrollment in Part D Plans
You qualify to enroll in a Part D plan in the same ways you qualify for Medicare Part A and Part B: by turning age 65 (and having enough work credits), by collecting Disability, or due to certain illnesses. You may enroll in Part D any time during your Initial Election Period or during the Annual Election Period each year, which occurs October 15 through December 7. Enrollment is a Part D plan is never automatic, and therefore it is important you contact a licensed agent to sign up for prescription drug coverage. Unless you have another form of creditable drug coverage, you must enroll in a Medicare Part D by law or you could face penalties.
Prescription drug plans can often be the most confusion part of your Medicare journey. My Medicare Partners will research your medications and the available plans to provide you with estimated costs, ways to avoid the donut hole, and tips on saving money! We’ll also check to see if you qualify for Extra Help and lower drug costs. Call us now for your free Annual Rx Checkup and for an easy explanation of the donut hole!
Our licensed Medicare Agents go through 40 hours of annual certification to ensure they are qualified to assist our members and provide an annual Rx checkup each year – at no cost to you!
Be sure to check out our report, “Revealed: The Six Secrets Insurance Agents Don’t Want You To Know,” so you’re equipped with information that could save you money and headaches!
Choosing a Part D Plan
Prescription drug coverage greatly reduces the cost of medications. Premiums, deductibles, co-pays, and the list of covered drugs can vary greatly between plans, and may also change dramatically each year. Also, your medication needs could change at any time. Each Autumn, Part D insurance companies notify beneficiaries of changes that may affect their plan — and those changes can be overwhelming if you don’t seek advice of a trained agent!
Just like it’s important to consider more than just premium price when selecting a Medicare Supplement plan, assessing all of a plan’s attributes and costs is also important when selecting a Part D plan!
Because Part D plans — as well as your health needs — can change, it’s important to assess your prescription drug plan annually!
We are happy to provide an annual prescription drug checkup for all our members — at no cost! Rest easy knowing you will always have the lowest out of pocket cost for your current and future prescription drug needs.
Plan prices vary and some people qualify for lower drug costs through financial assistance. My Medicare Partners works with dozens of companies offering Part D coverage, and we will spend individual time with you to find a plan that covers your drugs and lowers your out of pocket costs.
Costs between Generic and Brand Name drugs can mean a cost savings of thousands per year. It’s best to speak with your physician and pharmacist about the availability of Generic medications to help cut down on costs. Taking the Generic version of a Bran Name drug could save you thousands of dollars, depending on the medication!
Using Your Part D Plan
Part D drug plans can be used at most major and local pharmacies. Many plans also offer mail-order, so you can even have your prescriptions delivered right to your door.
There are several categories of drugs that must, by law, be covered by all Medicare Part D plans. However, there are some medications that are not covered by plans. My Medicare Partners collaborates with with Drug Discount companies as well as Patient Assistance Programs to ensure you’re able to access the medications you need, even when they’re not covered by your plan.
Most vaccinations are covered by Part D (or sometimes, Part B), and many vaccines cost you nothing out of pocket.
Why Should I Get Part D?
Medicare beneficiaries are required to have drug coverage, but unlike Part A and Part B, you are not automatically enrolled in a drug plan. Unless you have “creditable coverage” through an employer plan or Medicare Advantage with Prescription Drug (MAPD) plan, all Medicare beneficiaries must have drug coverage, even if you are currently not taking medications! There are three good reasons why you should get drug coverage – no matter what – when you become eligible for Medicare.
#1 THE PENALTY: It may sound silly that you are required to have drug coverage, even if you’re not taking medications…However there is a penalty for not obtaining drug coverage when you become eligible for Medicare.
#2 THE UNKNOWN: While someone may be in perfect health today, things may change at a moment’s notice. Without insurance coverage, most seniors are unable to afford the expensive modern medicines we’re lucky enough to have available to us. Every day we hear of people having to ignore their doctor’s orders to take medications due to prohibitive costs.
#3 THE DEADLINE: Just like other types of Medicare and health insurance, Prescription Drug Plans have certain enrollment periods during which you can enroll in a Part D plan. Outside of the Part D Annual Election Period, you may be locked out from buying a plan. Click to enroll in our Medicare deadline reminder service. It’s free and there are no obligations.
Auditing Your Prescriptions
There are five key components to assessing your prescription drug needs: the plan’s premium, deductible, tiers of drugs, formulary, and your medical needs.
- 1. Premiums, which are paid each month to the insurance carrier, can change each year. They are set by the insurance companies and may change due to a variety of factors, including features listed below. Although Part D plan costs on average are low, they can change and it’s important to make sure your plan still fits your budget.
- 2. Deductibles can fluctuate, like premiums. Sometimes people get scared when a deductible increases….but they don’t realize that co-pays have decreased (or vice versa). Take the guesswork out and let us research the plans for you.
- 3. Prescription Drug Plans categorize drugs into Tiers, or groupings of medications, and each Tier is assigned a co-pay fee. The main factor affecting a particular drug’s tier is its price. Tier 1 medications, usually generic meds, are lower cost than Tier 4 and 5, which are name brand drugs. Drug X could be a Tier 2 in one plan, and a Tier 3 in a different plan – which could be a huge difference in co-pays! Also Drug X could be a Tier 2 on your plan this year, but be moved to a Tier 5 next year!
- 4. The formulary is the list of medications a plan covers. While all plans are required to cover certain medications, there are other drugs that the insurance company decides if they are covering or not. Just like the other factors, Formularies can change year to year. One critical change to look out for in annual Formulary changes is the addition of Step Therapy requirements to a drug (this means you must try the less expensive version of a medication before “stepping up” to the Brand Name medication). It’s vital to ensure your drugs are covered each year – don’t make assumptions!
- 5. Your medical needs can change in the blink of an eye. Whether you become diagnosed with a new illness, or overcome an illness, the drugs you are prescribed by your doctors can be every-changing. Remember, there are certain times of the year when you are allowed to change drug plans. It’s important to always have a robust drug plan in place, just in case.
Many times , the plan with the lowest monthly premium will not save you the most money in out of pocket prescription drug costs. Sounds counter intuitive, right?
Contact My Medicare Partners so we may provide you a FREE, personalized Annual Rx Checkup to see which plan will save you the most money in drug costs. We’ll compare plans, generic vs brand name costs, and pharmacies for you. We’ll even give you some tips on how to keep your drug costs low.
Don’t be intimidated by choosing a drug plan that provides you the lowest costs. And remember: the lowest premium does not always equal the best value for you!
Always take into account the five factors to determine if your drug plan is a good fit for your and your wallet. Read our report here on what to watch for when your Annual Notice of Changes (ANOC) is sent in the mail, highlighting changes to your drug plan each year.
The Dreaded Donut Hole
Everyone likes donuts; no one likes the prescription drug donut hole! Also known as the coverage gap, the prescription drug donut hole exists in all Medicare plans, whether we like it or not. Rest assured knowing that the donut hole is never reached by a large majority of Medicare beneficiaries.
First, let’s talk about your coverage before the Donut Hole. First, before drug coverage begins, you are responsible to pay your Part D deductible. Deductibles in plans vary, and some plans even offer $0 deductibles. The maximum allowable Part D deductible in 2017 is $400. Before you reach your deductible, you do pay discounted prices for medications because you are enrolled in a plan.
Enrolling in a Part D plan that has a $0 deductible makes picking up medications hassle-free!
After the deductible is paid, you enter the Initial Coverage Period. During this time, you pay co-pays for each medication you receive. The co-pay amount is determined by a Tier system. Tier 1 drugs (generic) are low cost, whereas Tier 4+ drugs (name brand) cost much more. Once you and the insurance company have spent a combined total of $3,310 or more, you fall into the Donut Hole, also known as the Coverage Gap.
So what is the donut hole anyways? Think of it as a limited period of time when Medicare covers less of the costs of your drugs, and therefore your out of pocket share of the cost increases. Once the coverage gap ends, the Medicare beneficiary then enters “catastrophic coverage.”
Remember, most people never reach the donut hole! The donut hole is reached once the combined cost you and your plan have spent on drugs in a calendar year totals $3,310. The drug plan you select will keep you updated on your drug costs monthly, so you will be aware of how close to the donut hole you could be.
Even while in the donut hole, you still may pay less for drugs than if you had no coverage whatsoever. Medicare requires drug manufacturers to give discounts to people in the donut hole.
Formally known as the coverage gap, if you the Donut Hole, you will experience higher drug prices:
- Brand name drugs – you pay 45% of the plan’s cost for the drug
- Generic drugs – you pay 58% of the plan’s cost for the drug
- These are paid until the total drug out of pocket costs reach $4,850
- (A bit of good news: The costs for drugs while in the Donut Hole will be greatly reduced in the coming years! Each year, the out of pocket costs to you will decrease until in year 2020, when the Cover Gap’s cost of drugs is only 25%!)
Once in the donut hole and you’re spending 45% on Brand name and 58% on Generic drugs, and your total out of pocket costs amount to more than $4850, you enter Catastrophic Coverage. At this point, you’ll pay $2.95 for generic drugs and $7.40 for Brand name drugs, or 5% coinsurance (whichever is more). In other words, your Part D plan covers 95% of drug costs and greatly limits your financial risk.
Remember, the donut hole is only reached if your portion of your drug costs plus the insurance company’s portion of your drug costs reach $3,310. Once in the donut hole, your out of pocket costs for drugs increases. But, your out of pocket costs then decrease again once you arrive in Catastrophic Coverage.
Also keep in mind that by the year 2020, your out of pocket costs while in the Donut Hole will be reduced to only 25% for both Brand name and Generic drugs. And it’s steadily decreasing every year until then!
Other Part D Rules
Some plans have restrictions, while others feature more benefits than comparable plans. It’s important to understand a few key things when deciding on a Part D plan to cover your medications:
- Brand Name vs Generic drugs: Prices between Brand Name and Generic drugs can vary greatly. Consult with your Doctor and Pharmacists to find out about the Generic equivalent of your drugs to potentially save big!
- Prior Authorization: Some plans require a doctor provide reasoning for prescribing a particular drug. You primary care doctor may need to write a referral providing reason why they are prescribing you a particular medication if Prior Authorization is requested from the Part D insurance company. Without prior authorization, your medication’s claim will be denied.
- Quality Limits: to help cut down on illicit drug use and waste, quantity limits ensure the patient is the one receiving the medications!
- Step Therapy: Most plans require you try a generic medication before a name brand medication. Step therapy requires you to try less expensive, but nearly identical, medications before they will cover the most expensive drugs.
Medicare requires that drug plans cover at least two drugs in each category of medications. Insurance companies can decide which two drugs they cover per category, in each plan they offer.
There are six categories, however, that Medicare requires all plans to cover all medications in these categories:
- Anticonvulsants (seizure drugs)
- Antineoplastics (cancer drugs)
- Antiretrovirals (HIV drugs)
Prescription Drug Assistance for Those In Need
Medicare provides Extra Help for those who qualify, based on their income, to subsidize the costs of their medications.These folks don’t have to worry about the coverage gap, have reduced premiums for their drug plan, and pay less than 5% of the total cost for their medications.
Pharmaceutical companies also offer Patient Assistance Programs for some medications, especially medications not covered by insurance plans. While we cannot guarantee you qualify, your Medicare Agent will gladly research any medications you take that are not covered by your Part D plan to see if a manufacturer discount applies. My Medicare Partners also works with Drug Discount programs that may be used in lieu of a Part D plan to lower some drug costs.
We know firsthand how quickly medication expenses can add up. Our goal is to always keep your prescription drug costs as low as possible.
Although most medications are covered by your Part D Prescription Drug Plan, there are some drugs that Medicare does not require carriers to include in their formularies.
- Cosmetic drugs (such as those that claim to restore hair growth or change body size)
- Erectile dysfunction medications
- Infertility drugs, in vitro fertilization medications, and other drugs to treat infertility
- Over the counter items (such as cold medicine)
- Weight loss, weight gain, and eating disorder medications
Some insurance companies do offer plans that cover these drugs. If you are prescribed any of these medications, we recommend you tell your personal Medicare Agent so they may find the best plan to meet your pharmaceutical needs. (Remember, the information you share with us stays private!)
Certain medications fall under Medicare part B rather than Part D. Part B medications are those typically administered by a doctor or medical professional. As long as you have Part B coverage (Original Medicare only, Medicare Supplement, or Medicare Advantage), these drugs will be covered – just by a different Part of your plan. The amount of coverage varies based on the type of Medicare plan you have. Medicare Supplement plans have the most robust coverage for Part B medications.
Part B medications include, but are not limited to:
- Blood clotting medications
- Chemotherapy and Radiation
- Diabetic supplies (test strips, syringes)
- End-Stage Renal Disease (ESRD) medications
- Injectable and infused drugs (such as immunosuppressants)
- Osteoporosis medications
- Pumps (internal and external)
- Vaccines administered by a physician (flu, pneumonia, and Hepatitis B shots)
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