Medicare Part D - Prescription Drug Plans

Medicare Drug plans are provided by private companies, and seniors have many choices as to which plan they’ll use. Once enrolled, most plans can only be changed annually during open enrollment with the change becoming effective January 1st of the next year.

There are Part D plans with premiums of as little as $6.00 per month – and ones that cost over $100.00 per month. The cheaper plans often don’t cover a whole lot of medications until the patient has met a hefty deductible, but all it takes is one illness – not necessarily a hospitalization – to increase medication costs to hundreds, if not thousands, of dollars each month. Like all other Medicare plans, Part D has an open enrollment period. If a senior hasn’t elected a plan and suddenly develops a need for prescription drug coverage, he might have to wait months for open enrollment to get his medications covered. It’s possible that a senior can get temporary help with prescriptions through state or county social service programs, but they don’t cover the costs as completely as a Medicare Part D program does. Pharmaceutical companies also have low-cost programs, but there are financial eligibility requirements with no guarantee of acceptance. Part D can be viewed like auto insurance – it’s important when you really need it, otherwise it feels like just another unnecessary expense.

Each Part D provider has a Formulary, which is a list of medications that the plan will cover. This helps keep their costs down by providing a less expensive equivalent of many medications. If a plan refuses to cover a medication and insists upon a substitution, it is possible to make a formal appeal and ask for an Exception. During the time that it takes for the appeal process the patient must go without the medication, pay out of pocket, or use the substitute they are appealing. Some physicians can provide samples to their patients that will last during the appeal process, but it’s not possible to stock every medication in their office. If the plan’s formulary doesn’t cover a medication and the company will not approve an Exception, the beneficiary will have to change to another plan or provider during open enrollment.

Like all other Medicare related issues, prescription drugs are big business and companies will do anything they can to get physicians to prescribe their product. Sales representatives are paid quite well to sell new medications, offering lunches, golf tournaments, retreats and use other marketing tactics to constantly remind the doctor and his office staff about their. Even if the product is the best treatment option available, it’s possible that the medication won’t be covered by a Medicare Part D prescription plan. It’s important to remember that a medication or treatment may not be covered no matter whether or not the doctor has prescribed it.

Part D plan providers can’t legally stop providing an ongoing medication without notifying the patient at least 60 days ahead of time, and most of the time they’re required to provide the medication until the end of the calendar year. After that, the patient can switch to a plan that does cover the medication or will need to pay the full cost of the prescription out-of-pocket.

The original plan idea was fairly simple; after a beneficiary pays $2,830.00 out of pocket in a calendar year (not including the premium that is paid to the Drug Plan Administrator each month), he will have to pay the full cost of his prescriptions until he has paid a total of $6,440.00 out of pocket (this is called the donut hole, or coverage gap). After that, there’s only a small co-insurance or co-payment for any other medications. This is supposed to cover medications for patients who are very sick and take many medications, usually referred to as catastrophic coverage. In other words, under the guidelines of the plan the beneficiary has to pay almost $7,000 out of pocket (also called Cost Sharing) every calendar year before all medications are covered at a smaller, affordable amount to the patient. According to recent healthcare reform, the donut hole will be eliminated by the year 2020.

Those beneficiaries who are receiving prescription drug coverage from a past employer or a retirement plan will receive a notice from their plan at the time that they are eligible for Plan D prescription drug coverage – those plans are obligated to tell the client if the current plan is equal to or better than the prescription drug coverage offered by Medicare. If a beneficiary chooses not to use his retirement insurance provider for his Part D plan, it’s possible that his retirement insurance carrier will completely drop him as a customer even if his Part D is bundled with a Medigap policy. This information is something they may not mention to a senior, due to the higher costs to the company. Once a retirement plan provider drops a customer, it’s nearly impossible to get that coverage back; it’s always best to read the fine print.

Clients who have Medicare Advantage Plans, such as HMO’s and PPO’s may have prescription drug coverage under their current plan, and may not need to find a separate provider that can meet their drug needs. A separate Medicare Part D plan would not cover anything for the patient at all – and Medicare usually catches these types of errors and won’t allow them to occur.

For those beneficiaries who are lower income, there is a plan called “Extra Help” that greatly reduces their out-of-pocket costs. To find out if a beneficiary is eligible for “Extra Help,” call the Medicare number at (800) 633-4227. The application for the Extra Help program is refreshingly easy to complete, and in larger letters so that seniors can read them easier. Seniors who qualify for Extra Help can switch drug plans at any time during the year.

Medicare Part D providers have contracts with several local pharmacies for patient convenience, and most also offer to provide 3 months worth of medications at a time by a mail-order pharmacy at a much lower cost to the patient.