Medicare Part D prescription drug coverage, often referred to as Part D, is provided and coordinated by Medicare-approved private insurance companies. Any beneficiary who is eligible for Original Medicare, Part A and/or Part B, and permanently resides in the service area of a Medicare Prescription Drug Plan, can sign-up for Medicare Part D.

Medicare Part D coverage is optional, but if you don’t enroll in Part D as soon as you’re eligible, you might pay a late-enrollment penalty if you enroll later.

Key Points to Part D – Prescription Drug Plan:

  • Medicare Part D is simply insurance for your medication needs
  • Beneficiaries can enroll in a standalone Part D drug plan that goes alongside your Original Medicare benefits
  • Some Medicare Advantage plans have a built-in Part D drug plan
  • You pay a monthly premium to an insurance carrier for your Part D plan. In return, you use the insurance carrier’s network of pharmacies to purchase your prescription medications. Instead of paying full price, you will pay a copay or percentage of the drug’s cost. The insurance company will pay the rest.

 

Below is the current Prescription Drugs Statistics in our Nation (according to Kaiser as of 2019):

  • 58% of Seniors are currently taking at least one prescription medicine
  • 27% say they take four or more prescription drugs
  • 35% of those taking 4 or more prescription drugs say it is difficult for them to be able to afford prescription medication
  • 30% claim they did not take any prescription medication as directed due to cost
  • 45 Million beneficiaries have prescription drug coverage through medicare
  • 20.6 Million are in Stand-Alone Part D plans as a supplement to traditional Medicare
  • 17.4 Million are enrolled in a Medicare Advantage Prescription Drug Plans

 

In 2020, Medicare Part D members are facing a relatively large increase in out-of-pocket drug costs before they qualify for catastrophic coverage. This is due to the expiration of the Affordable Care Act provision that constrained the growth in out-of-pocket costs for Part D members by slowing the growth rate in the catastrophic threshold between 2014 and 2019. For 2020, the out-of-pocket spending threshold will increase by $1,250, from $5,100 to $6,350.

Part D members will also face higher out-of-pocket costs in 2020 for the deductible and in the initial coverage phase, as they have in prior years. The standard deductible is increasing from $415 in 2019 to $435 in 2020, while the initial coverage limit is increasing from $3,820 in 2019 to $4,020 in 2020. For costs in the coverage gap phase, beneficiaries will pay 25% for both brand-name and generic drugs, with plans paying the remaining 75% of generic drug costs—which means that, effective in 2020, the Part D coverage gap will be fully phased out. For total drug costs above the catastrophic threshold, Medicare pays 80%, plans pay 15%, and members pay either 5% of total drug costs or $3.60/$8.95 for each generic and brand-name drug, respectively.

Again, enrollment in Medicare Part D plans is voluntary, with the exception of seniors who are eligible for both Medicare and Medicaid and certain other low-income beneficiaries who are automatically enrolled in a prescription drug plan if they do not choose a plan on their own. Unless you have drug coverage from another source that is at least as good as standard Part D coverage also known as “creditable coverage”, you could face a penalty equal to 1% of the national average premium for each month you delay enrollment.

 

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Part D drug plan stages is as follows:

  1. Annual Deductible– in 2019, the allowable Medicare Part D deductible is $415. Plans may charge the full Part D deductible, a partial deductible, or waive the deductible entirely. You will pay the network discounted price for your medications until your plan tallies that you have satisfied the deductible. After that, you enter initial coverage.
  2. Initial Coverage– during this stage of Part D drug coverage, you will pay a copay for your medications based on the drug formulary. Each drug plan will separate its medications into tiers.  Each tiers has a co-pay amount that you will pay. The insurance company also tracks the spending by both you and the insurance company until you have together spent a total of $3820 in 2019.
  3. The Coverage Gap– after you’ve reached the initial coverage limit for the year, you enter the coverage gap. During the gap, you will still generally have significant discounts for generic medications. You will pay only 25% of your brand name medications, and 37% of generic. Your gap spending will continue until your total out of pocket drug costs have reached $5100 in 2019.
  4. Catastrophic Coverage– after you’ve reached the end of the coverage gap, your plan will kick in to pay 95% of the costs of your formulary medications for the rest of the year. This feature in Part D drug plans helps you limit your potential spending if you have expensive medications.

Medicare Tracks Your Part D Spending

Medicare tracks your True Out of Pocket Costs (TrOOP) for each year. This can protect you from paying certain costs twice. For example, say you have already satisfied the deductible on one plan. Then later you switch mid-year to a different Medicare Part D plan because you moved out of state. Your new plan will already see that you have paid the deductible for that year. The costs for coverage gap and catastrophic coverage work the same way.

Part D drug plans also changes from year to year.  Your plan’s benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1st of each year. You can however, change plans during the Annual Election Period that runs from October 15th thru December 7th each year.

Medicare allows drug plan carriers to apply certain rules for safety reasons and also for cost containment. The most common utilization rules that you may run into are:

  • Quantity Limits– a restriction on how much medication you can purchase at one time or upon each refill. If your doctor prescribes more than the quantity limit, then the insurance company will need him to file an exception form to explain why more is needed.
  • Prior Authorization– a requirement that you or your doctor must obtain plan approval before allowing a pharmacy to dispense your medication. The insurance company may ask for proof that the prescription is medically necessary before they allow it. This usually affects medications that are expensive or very potent. The doctor must show why this specific medication is necessary for you and why alternative drugs might be harmful or ineffective.
  • Step Therapy– the plan requires you to try less expensive alternative medications that treat the same condition before they will consider covering the prescribed medication. If the alternative medication works, both you and the insurance company save money. If it doesn’t,  your doctor to help you file a drug exception with your carrier to request coverage for the original medication prescribed. He will explain need to explain why you need the more expensive medication when less expensive alternatives are available. Often this requires that he show you have already tried less expensive alternatives that were not effective.

Your overall Medicare prescription costs can be affected by these restrictions. Always check your medications in the plan formulary to see if restrictions apply to any of your important medications.

Restrictions are part of ALL Part D prescription drug plans

A lot of people think that changing from one drug plan to another will help. In some cases it can, however, nearly all Part D carriers have restrictions on pain meds. They are especially common with pain medications, narcotics and opiates. If you take a significant amount of pain medication, know that you will deal with extra paperwork on a regular basis no matter which drug plan you choose. No matter which plan you are on you will encounter this.

There are also some medications which are not covered by Part D. If you take a medication that is not on the formulary, such as a compound medication, we urge you to contact us:

  • We have procedures in place to help you file the required exception to try to get that drug approved.
  • We have also helped so many beneficiaries lower their out of pocket cost simply by assisting them in filing a Tier exception on their medication.

Not all exceptions are approved, so be aware that you may pay out of pocket for any medication that is not covered by your plan or by Part D as a whole.

Part D drug plans are among the most confusing Medicare topics. We’ve had clients that joined a plan before Nevada Medicare and the would be medicare expert signed them up without checking to make sure the formulary includes their medications. Some also missed one of their medications that has step therapy rules applied. The best you can do is contact us and we will help you pick a carrier with the lowest overall annual anticipated spending.

At Nevada Medicare we can make it easy for you – call us for a hassle-free help in understanding your benefits and what’s available to you. Contact Us today.

Yes, you pay a monthly premium to the insurance company whose Part D plan that you enroll in. Everyone pays for Part D unless you qualify for Nevada’s Extra Help Program – Low Income Subsidy.

The monthly premiums are set by the insurance carriers and they vary.

Call us for a hassle-free help in understanding your Part D coverage and what’s available to you. Contact Us today.

Any Medicare beneficiary enrolled in either Part A and/or B can enroll in Medicare Part D. You must live in the plan’s service area as well.

We do not recommend skipping Part D.  Why risk it when there are plans available for as low as around $18/month? Keep in mind that Part D is insurance coverage not just for your medications today. It also insures you for any new medications that your doctors may prescribe to you in the future.

There are some medications that cost hundreds and thousands of dollars per year. These medications can become extremely difficult if not impossible to afford without coverage.

Part of our services that we assist our clients is we go through and review your current medications on a  Prescription Drug Plan database analysis where we identify which plan will give you the least amount of restriction and the lowest cost for the year. All this we provide exclusively at $0 cost to you.

At Nevada Medicare we can make it easy for you – call us for a hassle-free help in understanding your benefits and what’s available to you. Contact Us today.