Medicare can be complicated. Do you go with Parts A and B? Or do you opt for Medicare Advantage? What do you qualify for? What’s available in your area?
Adding to this, Medicare Part D, otherwise known as the Medicare Drug Plan, is completely separate from both Original Medicare and Medicare Advantage.
How do you know if you need the Medicare Drug Plan, or if you’re even eligible for it? Here we’ve got some of the basic information that you need to know to make sure your medications are appropriately covered, as well as what you need to know about changes to the plans in 2020.
Let’s look at how the Part D plan is structured for 2020. 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.
What is Medicare Part D?
Medicare Part D – also known as the Medicare Drug Plan – is additional coverage that Medicare recipients can opt to get that helps with the cost of prescription medicines. The plan is not automatic in the same ways that Parts A and B are. You must opt into Part D, and it is an additional and separate cost.
Like Medicare Advantage, there are different Part D providers in different areas, and each of the providers have some flexibility in what they are allowed to provide, or not. It’s very important that Medicare recipients look closely at the Part D plans they are considering signing up for to understand the coverage offered, what the co-pay or coinsurance amounts are, and all plan policies.
Can I Use it With Parts A and B? What About Advantage?
The Medicare Drug Plan is intended to be used as a supplement to Medicare Parts A and B, and as such they fit naturally together. The parts of the Original Medicare program offer very limited drug coverage, generally limited to what is prescribed in a hospital or administered at a doctor’s office.
Part D is intended to extend the coverage of the Original Medicare Parts A and B to include drugs prescribed by your doctor or after hospital care, typically the kinds of drugs you pick up from a pharmacy.
Am I Eligible for Part D?
If you are a Medicare recipient and are covered under Original Medicare (parts A and B), they you are eligible to receive additional coverage with Medicare Part D.
What is the Cost?
The cost of a Part D plan is dependent on a number of variables, including your location, the copay or coinsurance rates of the plan, and what your needs are. Instead of using a plan finder, you should talk to an agent that can directly assess your needs.
It’s also dependent on your income – for most people, the amount is simply the plan premium, but there is an added charge for those whose income, as a single filer, is more than $85,00/year or more than $170,000 if filing jointly.
In addition to the plan premium, different plans have different deductibles. Once the deductible is reached, there is also typically a copay or coinsurance amount. Medicare caps deductibles at $400.
Medicare Part D can help save you significant money if you have a need for regular prescriptions, or have costly prescriptions outside of a hospital stay, if you are on Medicare Parts A and B. It’s important to take the time to review what is offered as part of a Medicare Drug plan available to you to make sure you are getting the greatest value for your particular needs.
There are four components that are structured in all Part D prescription plans that some Medicare recipients may experience throughout a calendar year.
- Deductible Phase. Most Part D plans will expect to pay the full cost of your prescriptions out of pocket until it reaches the deductible limit, this could be $50, $250 or even $400 depending on the plan you choose. Some Part D do not have a deductible and therefore you will not pay the full cost of your prescriptions.
- Initial Coverage Limit. Once you have reached your deductible limit, your expenses after this point will be shared by between you and your Medicare Part D provider. So for example, for a particular generic drug you could pay a $1 to a $5 copay and a brand name drug you could pay a $25 to $45 copay.
- The Coverage Gap, also called a “donut hole,” begins when you meet your Medicare Part D plants coverage limit in a calendar year. During this period, you will pay a much larger cost for brand name prescriptions until you reach a certain amount out of pocket.
- The Catastrophic Coverage period is after you reach the donut hole maximum of your out of pocket costs, during this time Medicare will cover 95% of the costs and you will be responsible for only 5% for the remaining year.
Top Rated Medicare Part D Plans
SilverScript Choice. This plan has a very affordable monthly premium and has a $0 deductible. The plan also has a mail order option and the formulary works very well with generic prescription costs. Available in most counties in Pennsylvania, New Jersey and Delaware.
SilverScript Plus. This plan has a higher monthly premium and has a $0 deductible. The plan also has added coverage if you reach the “donut hole”. Available in most counties in Pennsylvania, New Jersey and Delaware.
Aetna MedicareRx Select. This plan has a very low monthly premium, a much higher deductible with added “donut hole” coverage. It does not have an option for mail order. Available in most counties in Pennsylvania, New Jersey and Delaware.
Aetna MedicareRx Saver. This plan has a higher monthly premium with a lower deductible and has basic PDP coverage. Available in most counties in Pennsylvania, New Jersey and Delaware.
EnvisionRx Plus. This plan has the least expensive monthly premium on the market, has a deductible and works great with generic drug costs. Available in most counties in Pennsylvania, New Jersey and Delaware.
First Health Part D Value Plus. This plan has a higher monthly premium with no deductible. This plan also has enhanced PDP coverage and “donut hole” coverage. Available in most counties in Pennsylvania, New Jersey and Delaware.