The Secrets of Part D Perscription Plans

(WHAT I WISH SOMEONE WOULD HAVE TOLD ME AT AGE 65)

Here are some general “good things to know about Medicare Part D Prescription Plans”:

-There are two ways to get Medicare prescription drug coverage:

  1. Medicare Prescription Drug Plans: These plans (sometimes called “PDPs”) add drug coverage to Original Medicare.
  2. Medicare Advantage Plans and other Medicare health plans that offer Medicare prescription drug coverage.

I get all of my Part A and Part B coverage, and prescription drug coverage (Part D), through theses plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs”.

  • The second option above are the pre-packaged plans we discussed in Article 9 and if I am in a MAP, then the insurance company has already chosen my Part D prescription plan for me. Consequently, the rest of this article applies only to those who are in Original Medicare.
  • If I am in Original Medicare, participation in a Medicare Part D prescription plan is voluntary.

However, if I do not enroll in a Part D prescription plan when first eligible (within the first 63 days of turning 65 and going on Part B), and do not have creditable coverage, then I may owe a late enrollment penalty fee.

Consequently it is wise to seriously consider enrolling in a Part D prescription plan whether you take prescription drugs or not.

  • If I have creditable prescription drug coverage which could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, Department of Veterans Affairs, etc. then in most cases, the creditable coverage is better than the Medicare Part D plan and I should keep the creditable coverage.
  • If I have creditable coverage, I will receive a letter to that effect and should keep that letter in case I have to apply for Medicare Part D coverage at a later date. If so, by showing that letter, I will avoid paying the late enrollment penalty fee.
  • The cost of the late enrollment fee depends on how long I didn’t have creditable prescription drug coverage.

Currently (2011) the late enrollment penalty is calculated by multiplying 1% of the national base beneficiary premium ($32.34) times the number of full, uncovered months that you were eligible but didn’t join a Medicare drug plan and went without other creditable drug coverage.

This amount is rounded to the nearest $.10 and then added to your monthly premium from then on, as long as you have a Medicare Part D plan.

-To determine the best Part D plan for you, go to www.medicare.gov and click on “Find a Drug Plan”. Then follow the steps which include entering your Medicare card number (if you have one) along with all of your prescriptions and dosages.

At step four, enter “Find a prescription drug plan (PDP)” and sort by lowest annual retail cost.

The website will then give me all the Part D prescription plans in my state sorted from least expensive to most expensive.

On that website, I can compare plans as well as find plan details such as premiums, deductibles, co-pays, donut hole information, and how to contact a plan to apply for coverage.

Most Medicare drug plans have a coverage gap (also called the “donut hole”).

This means that after I and my drug plan have spent a certain amount of money for covered drugs, I have to pay all costs out of pocket for my prescriptions up to a yearly limit.

My yearly deductible, co-payments, and what I pay in the coverage gap all count toward the out of pocket limit. This limit does not include the drug plan premiums or what I pay for drugs that are not covered by Medicare.

  • Some companies offer “gap coverage”, but in many cases the coverage is for generic drugs only. If I am in the coverage gap, I did not get there because I take generic drugs. Therefore, paying a higher premium for gap coverage is often not worth it.
  • The formulary is a list of prescription drugs covered by a prescription drug plan.

Formularies can change from year to year. Therefore it is important to enter my prescription information into the Medicare website each fall to determine the best Part D plan for the upcoming year.

-Part D prescription drug plan coverage runs for the calendar year. Once the calendar year starts, I am, in most cases, locked into that plan until the end of that calendar year.

-I can generally save money by using mail order. Usually, the savings is 33%.

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