The Medicare Part D prescription drug coverage is confusing and has you all stressed out. Which one do I choose?
The one with the deductible or the one without?
The one with the lowest monthly premium?
The one that all my friends have?
The one that has a familiar name?
Will all my scripts be covered?
Will I fall into the donut hole? What is the donut hole?
These are just a few concerns on the minds of seniors today when enrolling onto Medicare. Pick the wrong plan and it could cost you hundreds of dollars more a year if not thousands. Let me put your mind at ease. As a free service your BGA Insurance agent will find the most cost effective plan for you, and not only that, we will review your prescription plan every year during the Annual Enrollment Period (AEP) to make sure you are saving the most money as you possibly can.
Reviewing Your Plan
When I sit down with a prospective client and assist them in their Medicare needs, I always mention that not only will I help you find the right Part D plan but as long as you either call or email me (email preferred) in October or November (October preferred) during AEP and update me on your current scripts I will review your plan and discuss with you whether you need to make a change for the new year or let you know that your current plan is still the most cost effective for the new year.
You may ask why would I need to review my current plan and why I may need to change? I say this because every year the Part D plans change, they may change their formulary, copays, deductibles, monthly premiums etc. And as a senior living on a fixed income, I’m almost sure you would like to save the most money as possible.
Sometimes I am asked why I provide this free service, “doesn’t it take up a lot of your time?” Yes and no. During AEP as a broker I am concentrating on bringing new business into my agency but at the same time it is the time of year that seniors can change their prescription coverage regardless of health. No, it doesn’t take a lot of time to review a single plan for someone, but Yes it does take a lot of time to review a lot of plans for all my clients during a two-month window.
But I make it work because I know how important it is for seniors to save money while living on a fixed income. Most seniors are confused about how to go about reviewing their coverage, but for me because I review hundreds of plans a year I can navigate through all of it a lot faster and I know it brings peace of mind to my clients. I also know first-hand because my parents are Medicare recipients and if I didn’t assist my father with his prescription needs it would put them in the poor house.
One thing I will always stress, please don’t take advice from someone who is not licensed to sell Medicare insurance. Just because your friend or spouse has a certain Part D plan that doesn’t mean that plan is going to work for you. Everyone’s prescription needs are different.
Let’s look at how the Part D plan is structured for 2017. There are about 40 plans to choose from which adds to the confusion, all-the-more reason to work with a BGA agent for your Medicare planning.
After your Initial Enrollment Period (IEP-when you originally enroll onto Medicare) you may only change your coverage once a year during Annual Enrollment Period from October 15 to December 7.
If you do not sign up during IEP, a penalty will take effect when you do sign up unless you have proof of creditable coverage (usually employer coverage). That penalty is 1% for every month that you did not sign up for a Part D plan.
The first phase is the Initial Deductible phase: Some plans have a $0 deductible but the maximum any plan can charge is $400. If you sign up for a plan with a deductible you pay out of pocket the full cost for your prescriptions until reach your deductible limit whether it be $50, $250 or the maximum of $400.
After your deductible is met or if you don’t have a deductible you go directly to the Initial Coverage Limit phase. This is where you share the cost with Medicare, your shared cost is combined up to $3,700. This cost sharing is known to most folks as copays. Medicare pays 75% and you are responsible for 25% during this period.
The Coverage Gap also known as the donut hole begins once you reach your Medicare Part D plans initial coverage limit of $3700 and ends when you spend a total of $4,950. The Part D enrollee will receive a 60% discount on the total cost of their brand-name drugs purchased while in the donut hole.
The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole, however the additional 10% paid by your Medicare Part D plan will not count toward your TrOOP (true out of pocket costs).
Let’s look at an example, if you reach the donut hole and purchase a brand-name medication with a retail cost of $100, you will pay $40 for the medication, and receive $90 credit toward meeting your 2017 total out-of-pocket spending limit. Enrollees will pay a maximum of 51% co-pay on generic drugs purchased while in the coverage gap (a 49% discount). For example: If you reach the 2017 Donut Hole, and your generic medication has a retail cost of $100, you will pay $51. The $51 that you spend will count toward your TrOOP.
The Catastrophic Coverage portion of the Part D structure is after you reach the donut hole maximum of your out of pocket costs, during this time Medicare will pay 95% and you pay 5% of the costs for the remainder of the year.
Now I know reading this may still look very confusing but don’t be too hard on yourself because I have a lot of clients who are lawyers and they read long drawn out documents for a living and they also request my help with this. Once I sit down with you and show you the chart and explain it verbally you will have a better understanding how it will work for you.
Every BGA Agent is extensively trained to assist your journey into, and through, retirement by utilizing top rated insurance carriers and delivering old-fashioned personalized service. Read more about Medicare Part D Costs.
BGA Insurance can assist seniors in the following areas: