Medicare’s prescription drug coverage — the Part D plan — is a voluntary program for those enrolled in either Medicare Part A or Part B, or those enrolled in any of the Medicare Advantage plans that don’t already include prescription drug coverage. With the stand-alone Part D plan, beneficiaries will usually pay a monthly drug plan premium, as well as copayments, co-insurance, and possibly a deductible.
Here is a list of 11 important facts about Medicare Part D to help you better counsel your clients.
- Each Medicare drug plan has a formulary, which is a list of approved drugs that the plan will cover. A plan can make formulary changes throughout the year as long as the changes are approved by the Centers for Medicare and Medicaid Services (CMS) and are posted on the drug plan’s Web site at least 60 days before the change is effective. Those enrollees already taking a drug that is removed from the formulary may continue to have coverage for the drug through the end of the calendar year. Individuals should make sure their current prescription drugs are included on the formulary of any Medicare drug plan in which they are enrolling.
- Part D beneficiaries can request that a drug plan make an exception and cover a non-formulary drug under certain circumstances. In the event that such a request is denied, there is an appeals process.
- Medicare drug plans do not cover nonprescription drugs, prescription vitamins, drugs for weight loss or weight gain, etc. While some plans may cover some excluded drugs, those drug costs will not count toward meeting out-of-pocket limits.
- The standard Part D plans have an initial annual deductible, which is $310 in 2010 and will be $305 in 2011. The plan will then cover 75 percent of the next $2,405 of drug costs, followed by a termination of coverage until total drug costs (including the deductible) have exceeded $6,153.75. At that point, for each prescription, the beneficiary will pay the greater of either 5 percent of the prescription cost or $2.40 for generic medications or $6 for a brand-name drug.
- Many Medicare drug plans cover much more than the standard plan. Some plans have no deductible, some have no coverage gap, and some have a tiered copayment structure. Medicare drug plans use a network of providers to dispense medications. All plans must use walk-in pharmacies; some may also offer mail-order options.
- The average standard Medicare drug plan cost approximately $38 per month in 2009. Variations in the cost of the plans will depend on the drugs covered, copays, deductibles, pharmacies used, etc.
- The initial enrollment period is the seven-month period that includes the month of eligibility (typically when a beneficiary turns 65) and the three months before and after that date.
- No one can be denied coverage because of income level or for health reasons. However, agents and their clients should be aware that if an eligible individual does not enroll in a Medicare drug plan at the time of initial eligibility, there is a penalty unless the individual had prior creditable prescription drug coverage with no coverage gap of more than
63 days, if prior coverage ceased.
- The government-sponsored Web site www.medicare.gov has a program to help each individual choose the appropriate Medicare drug plan, as needs vary depending on several factors.
- Enrollees can change Medicare drug plans without evidence of insurability during the open enrollment period each year (Nov. 15 to Dec. 31). New coverage becomes effective on Jan. 1 of the year following this period. Each year, agents should review all the plan options with their clients to ensure that the client is still on the best plan for their needs.
- There are also special election periods when certain events take place. These include moving out of a plan’s service area, losing creditable prescription drug coverage, returning to original Medicare from a Medicare Advantage plan, or any other reason that is not the beneficiary’s fault. If you have a client who has experienced a life-changing event, check with CMS to see if it qualifies for a special election period. If it does, you want to sit down with the client and review all of their Medicare options.
The many components of Medicare’s Part D plan can be difficult to keep track of, but with these 11 tips on hand, you won’t get lost.
Nancy P. Morith is an adjunct faculty member at The American College. She can be reached at 800-793-4422.