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Medicare Part D
Many names have been used to describe Medicare Part D Prescription Drug Program, however, easy to understand is not one of the names I have ever heard mentioned. Medicare Part D is a federal government program enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This program is subsidized as a result of legislation and took effect on January 2006. It is the primary program which retired seniors on Medicare receive their prescriptions drug coverage.
Medicare Part D program and plans are over seen by the Centers for Medicare and Medicaid Services that has set forth minimum standards for all plans. Standard minimum benefits for Medicare Part D are not determined by drug lists but rather by benefit structure. The 2010 Standard Defined Benefit Plan minimums are:
• Initial Deductible $310.00
• Coverage Limits $2830
• Out of Pocket Limits or Threshold $4550
• Minimum Cost-sharing Catastrophic Benefit
$2.50 for generic or preferred generic drug to $6.30* for all other drugs in 2010
• Maximum Co-payments for certain Low Income Full Subsidy Eligible Beneficiaries
$2.50 for generic or preferred generic drug that is a multi-use drug and $6.30* for all other drugs in 2010
Many of Part D plans offered today is enhanced standard benefit plans that reduce or eliminate the deductible all together. Part D Plan carriers many times offer co-pays as oppose to co-insurance for tier levels preset by the insurer. Four tier levels and or combinations are most common. From least to most expensive are Generics, Preferred Brand, Brand Drugs, and Specialty Drugs. Specialty Drugs are defined as Drugs with a minimum cost of $600.00 or more in 2010 pricing. This tier mostly set up with a co-insurance of 25% to 33% cost share.
Part D out of pocket costs in 2010 begins when your coverage limits of $2830 have been paid out on your behalf by the insurance carrier minus any co-pays you have paid. When this occurs you are responsible for the next $4550.00, starting at dollar 1 out of your own pocket. This is referred to as reaching and participating in the Donut Hole or reaching the coverage GAP. Catastrophic coverage begins there after and you then begin to pay a small co-pay coinsurance until the rest of the year. See Catastrophic Benefit
Persons eligible through Social Security can receive Extra Prescription Drug help when their income and assets meet 2010 guidelines of:
| |
Income |
Assets |
| Single |
$16,245 |
$12,510 |
| Married |
$21,855 |
$25,010 |
You still may qualify for extra help with your drug costs if you:
• Live in Alaska or Hawaii
• Have additional earnings from work
• Receive additional money or support
from family living with you
Primary Residence, Automobile and Life insurance is not considered an asset to be counted toward qualifications. However, all other retirement funds and liquid assets to include:
• Stocks , Bonds, IRA
• Bank Accounts
• Mutual Funds
• Other real estate besides primary residence
• Persons eligible through Social Security can receive prescription Drug help when their income and assets meet 2010 guidelines:
Extra Help with Medicare prescription drugs can be applied for at anytime during the year. Applying earlier will be better for all who are eligible.
Types of Medicare Part D Plans
Two types of plans individuals have to choose from.
1. Stand alone drug plans that are separate from your Original Medicare. These Medicare Part D plans have a plan premium associated with your enrollment into the plan and are referred to as PDP plans.
2. You may receive your Part D Prescription plan through a MAPD Medicare Advantage Prescription Drug plan that combines hospital and medical services with your drug coverage. MAPD plans are consider Medicare Part C and have their own tier levels for prescriptions inside the plan. No additional or separate premium will be required for the Prescription drug plan. It comes with whatever the premiums are charged for the Medicare Advantage plan.
Are Your Medications Covered?
Formularies can be defined as drug list that are approved for coverage under any given plan. Formularies are created by private insurance companies and approved by CMS. Centers for Medicare have certain drugs that must be included on all drug lists as well as drugs that are blacklisted from all Medicare approved plans. Medicare reviews and approves all plans before they can be offered to the public. All Medicare Part D Drug plans offer a minimum of two or more approved drugs in any defined therapeutic drug classification. This is a criterion that must be met and maintained to receive an approval for there Part D plan from CMS. So in the event your specific drug is not covered under one plans formulary you have an option to check with your doctor to see if another drug option in the same therapeutic class would work just as well or just look for another plan. If your drug is not on the Part D plan you have, you will be responsible for paying full price for that drug. It is always a good idea to check to see if your medications are listed in the Plan Providers Formulary before you determine if that plan is best for your situation.
Drug restrictions for each plan must be known in advance. Common restrictions for drugs are:
• QL- Quantity Limits can be set on a certain drug or drug category. Often you will find this on pain medication with a maximum quantity limit of 30. You will not be able to take advantage of mail order discounts when this restriction is placed on your drug.
• ST – Step Therapy requires you try an alternative drug, usually from a less expensive tier level like Generic and have documentation of results from doctors office before being approved for the drug you have been prescribed. If it does not work or is not as effective then approval can be obtained for original prescription drug.
• PA- Prior Authorization is when a drug requires an insurance carriers’ approval before it can be dispensed. Not all Prior Authorizations are immediately approved.
Exceptions to Drug Formularies
Lastly, not all drugs are on all plans. If you find your drug is not on your plan you can ask for a formulary exception. Sounds easy enough, however, most exceptions are denied by carriers unless your doctor can make a compelling case as to why no other drug in that therapeutic class would be an acceptable alternative.
Some situations can be found when a member (new or current) is stabilized on medications that belong to one of the Special Medication classes listed below:
• Cancer Chemotherapy
• Anti – Depressants
• Anti – psychotics
• Anti – Seizure
• Immunosuppressant’s
• HIV/ Aids
Eligibility
Anyone can join a Stand Alone Part D Plan once they begin receiving Medicare Part A. You do not need Part B coverage to enroll in a Part D Plan. However, you would still need the Part B Coverage to qualify for enrollment into a Medicare Advantage with a Prescription Drug benefit (MAPD).
Turning Age 65 and receiving Medicare Part A & B, medical you have three month before the birth month, the actual birth month, and three months there after for a total of 7 months to choose a Part D Prescription Drug Plan.
After initial enrollment, you may change your plan once a year during the Annual Enrollment Period, Nov. 15th – Dec. 31st of each year with an effective date of January 1st of the following year.
Special election Periods occur from Jan 1 – Nov 15th of each year when Medicare beneficiaries are eligible if one or more circumstances prevail.
1. Loss Credible coverage from employer drug plan or equivalent.
2. Recently moved out of coverage area
3. Approved for or lost Extra Drug Coverage Assistance
4. New Beneficiary to Medicare
5. Admitted or Discharged from Long Term Care Facility or Rehab due to Illness
Late Penalties
Electing not to join a plan when eligible for Medicare Part D and not maintaining credible coverage can be costly in the event you would decide to enroll in a plan later on. There will be a 1% late penalty added on to your monthly premium for each month after May 2006 that you were eligible, and did not participate in a plan. This is cumulative and for the life time of you remaining in the Medicare Part D Plan. This year the base plan cost that is used to assess penalties is right around $31.50 per month. As a result of the late penalty for each month you’re out of the plan in year 2010 you would be assessed a late penalty fee of 31.5 cents per month. This totals $3.78 for this year would then be added on to any additional future premiums charged in the Part D Medicare program.
How can I locate the best plan based on my current prescriptions?
• May Go to www.Medicare.gov website and locate Drug Plan Finder (enter in your drugs by name, dosages and monthly quantities.
• Call Medicare and ask representative for their help. Have all details of drug scripts available. Medicare offices call 800-633-4227 and be prepared for a 45 minute wait on the phone.
• Call our staff and we will immediately help you with your individual needs.888-508-5426
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