Why are There so Many Plan Options?
When Medicare Part D was first made, the government requires certain things to be covered in the plan. From there, private insurance companies were allowed to provide part D coverage, so long as they met or exceeded the original requirements established by Congress. Insurance companies then have a lot of room to offer plans that appeal to all kinds of customers.
How do I Pay for My Coverage?
The first cost to Part D is a monthly premium, and the amount varies depending on the plan.
Payment for covered prescriptions is handled in four different parts. Your plan may start you with a deductible or in the initial coverage stage. Which stage you’re in depends on pay limits that are established by your plan.
Just like deductibles for Medical Savings Accounts and PPO plans, you are responsible for all costs until the pay threshold is reached. Some plans may not have a deductible, but any prescriptions you fill will be put towards your deductible.
At this level, subscribers pay coinsurance and copayments up to another level. Copays are a common coverage option. They are used with PFFS, PPO, and HMO plans. Copayments are usually a flat fee but will increase in price depending on the drug. For example, generic drugs usually have lower copays, while specialty drugs will have the highest copays.
Coverage gap or “donut hole”
As of 2017, Part D subscribers cover 40 percent of the plan’s price for brand-name drugs. In terms of generic prescriptions, subscribers cover 51 percent of the plan’s price. Another advantage of this plan is the discounted price for prescription drugs. In terms of brand-name prescriptions, the drug manufacturers provide half of the discount. On the other hand, the federal government provides the discount for generic prescriptions.
This is the final level of coverage under Part D. Usually, subscribers only hit this level when they face serious medical needs. From here on, the subscriber only pays minimal copayments for prescriptions. The average amount is around 5 percent of the total cost. One reached, these terms last until the coverage cycle restarts at the end of the year.
What Drugs Are or Are Not Available?
When Part D was organized by Congress, they established baseline prescription drug coverage. This meant that plans must include a combination of two of the following medications types:
- Anti-cancer drugs
If your plan does not cover the medication type you need, you can apply for a coverage determination or exception. Before granting this exception, your plan will likely have you try similar medications that they do cover. If your application does not go through at first, you can always ask again.
There are certain drugs that Medicare will not cover by law. These medications include over-the-counter drugs, weight management pills, cosmetic medication, fertility medicine, and erectile dysfunction prescriptions.
Coverage Limits for Medicare Part D Prescription Drugs
When filling prescriptions on a Part D plan, you may run into these additional limits. If your prescription falls under one of these categories, you may have to jump through a few hoops before your plan will cover your prescription. The terms for these limits are quantity limits, prior authorization limits, and step therapy limits.
Quantity limits mean that the plan will only cover prescriptions that they see as normal treatment for a condition. For example, a plan may not cover an antibiotic for 20 days, when normally it is prescribed for 10 days.
Prior authorization limits usually trigger when you need a prescription outside of the plan’s approved list. Normally, this happens with expensive or stronger medications. If this happens to you, work with your doctor and get specific documentation for why this medication is essential to your health.
Step therapy limits are when your plan requires you to try cheaper or generic medications in place of your prescription. These are in place to help you and your insurance save money. Should these options prove ineffective, your doctor can help you get the first prescription.
Main Information Source: Aarp.org “How Medicare Part D Works”
Working With a Health Advisor
As you can see there are many facets to Medicare Part D plans. Here at Buffalo Health Advisors, we know getting the right coverage can be a confusing and overwhelming process. Our expert health advisors are here to help. Reach out and let us work with you to get you the right health insurance.
Call us at 888-218-4543 and set up an appointment today!
Let Us Help You Find The Right Plan
At Buffalo Health Advisors, we believe in providing solutions to seniors as they transition to Medicare plans. Not only can Medicare Advantage work to protect your health, choosing the right plan can go a long way toward protecting your wealth. This plan is critical if you are going to be living on a fixed income during your retirement years.
It will cost you nothing to learn more about the options available to you. Call or stop by our Nashville, TN office to discuss your Medicare plan options with one of our experienced agents.