Prescription Drug Plans

Medicare Part D Program Overview and History

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established the Medicare Part D plan. It was put into effect in 2006. Medicare Part D offers voluntary drug benefits for about 56 million elderly and disabled individuals using private healthcare plans approved under strict guidelines set by the federal government.

The purpose of Medicare Part D is to help make prescription drugs more affordable for the elderly and disabled. Plans may provide coverage in the form of “stand-alone” Part D plans that cover just prescriptions, or they may be part of a plan that provides both Medicare health and prescription coverage, which is known as a Medicare Advantage plan (MA or Medicare Part C).

Medicare Part D Prescription Drug Plans is coverage for retail prescription drugs or the medications that you pick up at a pharmacy. This is a voluntary program that allows you to access medications at an affordable rate and insures yourself against any prescriptions you may need in the future.

All Medicare Prescription Drug plans cover the types of drugs most often prescribed for people enrolled in Medicare. This is decided by the U.S. government. But it’s up to each plan which specific brand name and generic drugs they will cover within those types. You can find this information by viewing the plan’s drug list.

The cost of Medicare Part D prescription or Medicare Advantage plans

The monthly premium that you will pay for each type of plan depends specifically upon your plan, the state you live in, and a few other factors specific to your situation. You may pay anywhere from a few dollars a month to $100 or more for a Medicare Part D prescription plan. Medicare Advantage may charge nothing for added drug benefits.

Choosing your drug plan should never be based purely on the plan’s monthly premium because every plan has its own separate premium, drug formulary, and copay.  Just enrolling in the cheapest plan without checking the plan’s formulary could lead you to pay higher out-of-pocket costs for the year. This could be an expensive mistake, especially if you learn later that the plan does not cover one of your medications. Remember, the least expensive monthly premium is not necessarily the least expensive plan when figuring out total prescription costs. Also, do not forget, that all Part D plans, the benefits, formulary, pharmacy network, provider network, premium, and/or copayments/co-insurance may change on January 1 of each year.

What does your Medicare Part D plan cover?

The prescription drugs that your Medicare Part D plan covers will vary from plan to plan. That is why you will always be provided with a list of formulary drugs and their amount that is covered by your plan.

You must check with each Part D plan, as one plan may cover more than another plan. Some plans may not cover the prescriptions you need at all.

In addition to covering prescription drugs based on multiple tiers, many Medicare Part D prescription plans offer a separate tier for injectable drugs, like insulin. The cost-sharing options for injectable tiers tend to be higher.

Extra Help

The federal government offers extra help with paying for your Part D drug plan and paying for your medications if you qualify and is based on income. This is what is called a Low-Income Subsidy. Anyone can apply for this from Social Security at any time. Help is only awarded based on proving low income and limited resources. You must have an annual income that falls below 150% of the Federal Poverty Level based on your household size.

Beneficiaries who qualify may receive assistance with paying their monthly Part D premiums, their annual Part D deductible, and their co-payments on retail medications. There are various levels of qualification, and your subsidy level determines how much assistance you will get toward your premiums. Someone qualifying with a full subsidy would have 100% of their Part D premium paid for, up to the benchmark allowed by Medicare for that particular year.

A drug list—sometimes called a formulary—is a list of drugs covered by a plan.

• A drug list can change from year to year.

  Part D plans may add or remove drugs from their drug list each year. Changes may also be made during the year, for example, if a drug is taken off the market. Your plan will let you know if a change affects a drug you are taking.

• Many Part D plans have a tiered drug list where drugs are divided into groups based on cost.

  In general, drugs on low tiers cost you less than drugs on high tiers. Plans may charge a deductible for certain drug tiers and not for others, or the deductible amount may be different depending on the tier.

There are rules for some prescription drugs that limit how and when a plan will cover them. These are called requirements or limitations. If you don’t follow these rules or don’t get permission from the plan saying you don’t have to (called an exception), you may have to pay the full cost of the drug out of your pocket.

WHAT IS ‘THE DONUT HOLE’?

The Medicare Part D coverage gap, also known as the “donut hole” is a benefit structure that applies both to stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans, however, not everyone enters it. If you’re presently or will sometime in the future be taking medications or are concerned about lowering your prescription drug costs, it may be helpful for you to understand what the Medicare ‘Donut Hole’ is and ways to avoid it.

Donut Hole (Coverage Gap) Explained

Some Texas Medicare Advantage Prescription Drug plans and stand-alone Medicare Prescription Drug Plans provide partial or full coverage during the coverage gap. For example, some plans may not have a gap at all, while others may offer generic drug coverage in the gap. Plans with gap coverage may charge a higher monthly premium, so you should only consider one of these plans if you have high prescription drug costs and know you will reach the coverage gap.

There is a Late Enrollment Penalty for not having creditable prescription coverage. 

Ashford Insurance also offers Medicare Advantage (Part-C) and Medicare Supplements (Medigap) Insurance Plans.