When people think of Medicare Part D, they understand what it is but they don't always understand the actual plan. It's hard for people to work with what they don't understand. As people sign up for these plans, it's important for them to know what they are signing up for and how it benefits them.
A Medicare Part D plan helps Medicare recipients pay for their prescription medications. These plans are offered by private insurance companies that have contracted with Medicare and have agreed to follow their rules and regulations in order to offer these plans. Although they are offered by private insurers, Centers for Medicaid and Medicare Services still oversee the program.
With these plans being another piece of the Medicare puzzle, there is a separate premium in most cases. The prices for these premiums can vary, depending on what state a person lives in, what plan they pick and how much they earn. The premium has to be paid every month in order to keep the coverage active and benefit from it. There are many that choose to send the premiums independently each month and others that choose to have their premiums deducted directly from their Social Security checks.
Phases of the Part D Plans
There are some plans that have a deductible. A deductible is the amount of money that is paid at the pharmacy before the insurance will begin paying a portion of the cost for the medicines. Many people feel that they aren't getting any benefits until after the deductible has been paid. That isn't true. When people enroll into a Medicare Part D plan, they are contracting with the insurer and entitled to get the negotiated prices of those medications as long as they have the correct insurance information on file. While people are paying for medications while they are in the deductible phase, they are paying the negotiated price for medications, not the retail price. Once people have reached a predetermined amount, they automatically move into the next phase of coverage.
Once the deductible has been paid, beneficiaries move into what is called the initial coverage period. During the initial coverage period, the beneficiaries of the plan will pay a copay for their medicines and the plan will pay the rest. During this time, they are only paying the copays they agreed to. There are a couple things that are important to remember during this phase. The negotiated price is still being charged to the insurance provider. The difference is that the member is only paying a part of the cost, not the entire amount. Once the total of all the medications bought, what you paid and what the insurance provider has paid, reaches $2930, beneficiaries go into the next phase of coverage, the coverage gap.
The coverage gap or donut hole is one of the most dreaded times for people with Medicare Part D plans. When the total cost of the medications has reached exactly $2930, the costs change dramatically. Instead of paying a small portion of the negotiated price, the beneficiary will begin paying for most of it. During the coverage gap, those that take generic medications will pay about 86% of the generic price. If a generic medicine costs $10 for a one month supply, the member will pay $8.60 instead of whatever their plan's copay was for those generic medicines. When people take brand name medicines, the costs could get a little scary. For each brand named medicine, the member is responsible for at least 50% of the medications' negotiated price. The drug manufacture is supposed to give a 50% discount on those medications to help lower the cost during the coverage gap. If a brand named medication has a negotiated price of $100, the member is responsible for $50 every time they get that prescription filled.
For many, the coverage gap is worse than a nightmare. There are many medications that don't have an alternative or a generic that are very necessary for millions of people. When people go into the coverage gap, they do have a chance to get out of it. Once they go into the gap, they have to spend up to a total of $4700 to get out of the gap. That is a price that seems pretty high to get to for some but it's not always hard to reach. The negotiated prices of those medications are what will determine how fast people go into the coverage gap and come out of it. Once the total of $4700 has been met, the relief comes.
After the coverage gap is catastrophic coverage. When beneficiaries go into the coverage gap, they are normally angry about the costs they have just had to pay for their medications and can't pay any more than they already have. Many Medicare Part D plans have their catastrophic coverage set up to cover most of the costs of the medications from the time they enter this phase until the end of the calendar year. The members are only responsible for a small portion of the costs. Those costs are determined by each plan respectively. If a member enters into catastrophic coverage in August of that year, they will stay in catastrophic coverage until December 31 of that year.
What? Who Can Afford This?
There are many people that hear the costs of these plans and look at the costs of expensive medications and think they shouldn't even bother with the insurance. That is the biggest mistake that people can make and it will often lead to financial ruin if there are a lot of medications taken.
Not everyone taking medications reaches the coverage gap. They may only take generics and the costs of generic medications are very low. Even with a combination of generic and brand name medications, it is possible to avoid the gap. It depends on each plan, how they have classified their medications and most importantly, their negotiated prices for medications.
When a person is talking to a company about their prescription drug plans, it is important to make sure they have all their current medications covered on the formulary, they know the cost of those medications during the coverage gap and what they are responsible for during that time. There is nothing worse than signing up for a plan that doesn't cover the necessary medications or finding the cost during the gap is too much for them to handle. Once the plan has started, it will take a special circumstance to end it or CMS to interrupt it themselves.
There are many ways to receive help with the cost of a Medicare drug plan. Those that meet certain income restrictions have can apply for Low Income Subsidy. There are also programs that drug manufactures offer to help with the cost of medications. The cost for medications can be expensive but there are programs to help.
Whenever a person has questions about their Medicare Part D plans, it is important for them to get their questions answered. They can call their plan provider or they can call Centers for Medicare and Medicaid Services directly. All questions deserve an honest answer and they can't be answered if they aren't asked.