Phases of Medicare Part D: The Initial Coverage Period

Now that the deductible has been satisfied, owners of Medicare Part D plans have now entered into the initial coverage period. This is a different phase of the prescription drug plan and often the most anticipated portion of the plan. This is where the cost of medications are more predictable.

The initial coverage period begins when the specified deductible ends. This is the period of time that insurance providers begin to pay a portion of the cost of medications rather than the member paying the entire cost of the negotiated price for their medication. This is a time that most people begin to pay a copay for their medications and are able to predict what their regular medications will cost them each month.

As people go into their initial coverage period, there are things they should know. Although their out of pocket costs have gone down, their negotiated prices are still the same. Instead of them paying the full negotiated prices for medications, insurance members are only paying a portion of the cost. These members are only paying the copayment they agreed to and the insurance is paying the balance. This is a very important concept for people to understand.

When people are in their initial coverage period, the negotiated price of the medications they are receiving is being tallied and kept track of. If the medication is covered by their insurance and the provider pays a portion of the costs, it is being tracked. When the total combined costs of medications reach a total of $2930, they are no longer be in their initial coverage period.

Not many people realize what happens when they go to the pharmacy and have prescriptions filled. When a medication is requested, there is a price for that medication. When a person has Medicare Part D insurance, the price is a negotiated price, the price the insurance provider agreed to pay for the medication. When that prescription is filled, the insurance information is run and the medication is documented in the pharmacy's system as well as the insurance company's records. The total negotiated price of that medication is listed in those records. As the insurance information requested from the insurance provider comes back to the pharmacy, the members will only pay the copay that has been agreed upon. That portion of the negotiated price is shown as paid by the member and the balance of the bill is paid by the insurance provider.

Although the payments for the medications are split between two people, the member and the insurance provider, the entire negotiated price is placed on the member's account. As the cumulative cost of the medications increase, the closer people get to the end of their initial coverage period. Once the cumulative total reaches $2930, the initial coverage period ends.

Many people are confused about where they stand with the cost of their medications, how much their medications are costing them as well as how to track their spending. There is one simple document that should be sent to each member each month when they have an active prescription drug plan. Each month, members should receive an explanation of benefits. This is an important document to read each month because it provides so much information and will help members avoid costly mistakes.

An explanation of benefits is exactly what it sounds like, an explanation of benefits that have been used. On this document, members can see the amount of money they have used each month in prescription benefits as well as a year to date total. These statements go further to tell their members the negotiated prices of their medications and some also show the retail prices of medications. Not only are these statements important because they show the cumulative amounts of medications filled, they will show each medication that has been filled for that specific month under the insurance. It is for these reasons that people should read their explanation of benefits and call their insurance provider with any question or disputes.

There is no easy way of learning how a prescription drug plan works. It takes time and one has to have each piece explained to them as they go along. Although it takes time to understand, it is possible to understand it. When people begin to pay a copay for their medications, they are in their initial coverage period. As their cumulative medication costs go over $2930, that period ends and the coverage gap begins.

Whenever there is a question about a medication on the explanation of benefits or if it is a medication they can have, there should be no hesitation in calling the prescription drug plan provider. These representatives have a full understanding of how their prescription drug plans work and can explain many different things to their members. Not only can the insurance provider give their members explanations, so can the Centers for Medicare and Medicaid Services.

There is no reason that a member can't have their questions answered by a knowledgeable professional. There are many different sources of information and well trained experts available to explain and teach beneficiaries about their plans. Whenever a question of medications isn't self-explanatory, there is a way to get a logical answer. The initial coverage period is an important time in the Part D Prescription Drug Plan cycle. If there is a question, demand an answer.

Jul. 15 12'

It is simply not true that Medicare Part D insurance companies are trained, or willing to give accurate and complete explanations. I had the worst time with a company, Silverscript, two years ago. They said one thing and then when it came time to cover my medications they wouldn't fill them. My pharmacist and doctor did everything they could to work with the insurance company to no avail. It was a horrid year for me and I paid at least 3 times as much that year than I have any other year, and as was promised by the plan. 

I study the plans every year and pick the one that sounds the best after many calculations and comparrisions. But rules change without warning. Or the warning comes after you try to fill the prescription that *is* on the fomulary.

I know all about step therapy and quantity limits but none of these applied as to why they wouldn't fill my medications. I appealed and was denied more times than I can remember. My excellent doctor finally thew up his hands in defeat.

Why should a doctor have to spend so much of his precious time dealing with insurance companies like these? They have more important things to do that fight with insurance companies, treating patients for instance.

Their answers I received were simple, "No, we can't cover it." said the company rep.
I asked why, "It's not covered." they said.
"May I ask why?", "No, it isn't covered." they siad.
"What can I do about it?" The company rep said,  "Nothing. Wait until we decie to cover it again.
I asked, "And when might that be?" Answer," We don't know.." said the rep.

Each so called answer to my questions was ended with, "Is there anything else we can help you with?" I said, "You haven't helped me with answering my first question". They didn't say anything in reply. Talk about fighting a losing battle.

Dec. 3 12'

Hey Rob sorry to comment here, didn't see ahtenor obvious way to contact you. I moved your q. to github, and I have to kill all the comments on the Imagemapster web site because I screwed something up with the disqus config. Or just email me directly if you prefer.
Jul. 7 15'


Get in on the discussion!