There Are Two Types Of Plans
Plans come in two basic types. The most simple is a prescription drug plan , which covers only drugs and can be used with your traditional Medicare and/or a Medicare supplement plan. The other type combines a prescription drug plan with a Medicare Advantage plan and includes medical coverage for doctor visits and hospital expenses. This kind of plan is called Medicare Advantage plus Prescription Drug, or MA-PD.
What Is The Part D Late Enrollment Penalty
The Part D late enrollment penalty is an amount thats permanently added to your Part D premium. You might have to pay this penalty if after your IEP, there are 63 days in a row where you dont have Medicare drug coverage or other creditable drug coverage. Creditable drug coverage refers to a drug plan that pays at least as much as Medicare Part D on average.
To avoid paying the late enrollment penalty, its important to enroll in Medicare Part D or have other creditable drug coverage during your IEP. Make sure to enroll in Part D if you lose your creditable drug coverage. If you keep your creditable drug coverage, its a good idea to keep records proving that you are enrolled.
Costs You Could Pay With Medicare Part D
With stand-alone Part D plans, you will pay a monthly premium and may also pay an annual deductible, copays and coinsurance.
Some plans charge deductibles, some do not, but Medicare sets a maximum deductible amount each year. In 2022, the annual deductible limit for Part D is $480. In 2023, the annual deductible limit for Part D is $505.
Copays are generally required each time you fill a prescription for a covered drug. Amounts can vary based on the plans formulary tiers as well as what pharmacy you use if the plan has network pharmacies.
Some plans may also set coinsurance rates for certain drugs or tiers. In this case the plan charges a percentage of the cost each time you fill a prescription.
Also Check: What Are Tax Benefits Of Roth Ira
What Are The Enrollment Options
A person can enroll in Medicare, including Part D plans, during several different periods:
- The initial 7-month enrollment periodstarts from 3 months before someones 65th birthday month, includes the birthday month, and the following three months. Once people enroll in original Medicare parts A and B, they have 63 days to enroll in an add-on Part D plan or a bundled Medicare Advantage plan. If someone does not register at this time, they must wait for specific enrollment periods.
- A person can enroll in, swap, or drop Part D plans during the open enrollment period. The period is from October 15 to December 7, with coverage starting on January 1 of the following year.
- From January 1 to March 31, during the Medicare Advantage open enrollment period, a person can drop an Advantage plan and enroll in Original Medicare with a Part D plan.
- From December 8 to November 30 of the following year, a one-time special enrollment period offers a person the chance to choose a 5-star rating plan.
Where Can A Person Get Their Medication
Medicare requires that Part D plans cover all prescription drugs in these categories:
- anticancer medications
- HIV and AIDS medications
- immunosuppressant medications
Each Part D plan must cover a minimum of two medications in each category. However, the plans can develop their own list of drugs they cover, called formularies. Plans often cover vaccines with no copay.
If doctors prescribe medications that the formulary does not include, they can request an exception. They must send a formal letter to the Part D provider explaining why their patient needs the specific medication. Medicare decides on an individual basis if they will allow the exception.
Plans may use specific pharmacies or network of pharmacies. They may offer options for both retail and mail-order pharmacies that cover the plan holder.
A person can use the online plan finding tool to compare plans, including drug coverage.
Medicare Part D has different associated costs, including a monthly premium, deductibles, and copays. The exact cost of each of these depends on the individual plan.
Premium
A basic premium applies to Medicare Part D, although it varies by plan, and a person pays it in addition to the Medicare Part B premium.
A person may also pay an extra amount, called a Part D income-related monthly adjustment amount , depending on their income level.
Deductible
Most, but not all, Part D plans have a deductible that a person pays out-of-pocket. In 2020, the maximum deductible is $435.
Recommended Reading: Average Cost Of Health Benefits Per Employee
Most Part D Enrollees Face Relatively Low Cost Sharing For Preferred Generic Drugs But Higher Amounts For Generics Not On The Preferred Tier
Figure 7: Distribution of Medicare Part D Enrollment by Cost Sharing for Generic Drugs in 2019
Around one-fourth of Part D enrollees pay $0 for preferred generics in 2019, but many pay $10 or more for generics that are not on the preferred tier. For preferred generics, 24 percent of PDP enrollees and 28 percent of MA-PD enrollees have a $0 copayment, while 74 percent of PDP enrollees and 63 percent of MA-PD enrollees face copays greater than $0 but less than $6. For generic drugs that are not on the preferred generic tier, nearly 4 in 10 PDP enrollees and 66 percent of MA-PD enrollees pay between $10 and $20.
How Does A Tiered Formulary Work
Many plans have a tiered formulary where the plan’s list of drugs are divided into groups based on cost. In general, drugs in low tiers cost less than drugs in high tiers. Additionally, plans may charge a deductible for certain drug tiers and not for others, or the deductible amount may differ based on the tier.
Formulary tiers:
Also Check: First Time Home Owner Tax Benefits
How Do Medicare Enrollees Get Medicare Part D Prescription Drug Coverage
All prescription drug coverage for Medicare beneficiaries is provided by private insurance companies, as Medicare A and B dont cover outpatient prescriptions. Most Medicare Advantage plans do include prescription drug coverage .
If youre enrolled in a Medicare Savings Account plan or Private Fee-for-Service plan that doesnt include Part D coverage, you have the option to enroll in a stand-alone Part D plan to supplement your coverage.
However, a stand-alone Medicare Part D plan cannot be used to supplement a regular Medicare Advantage plan that doesnt include prescription drug benefits. Medicare Advantage enrollees who want prescription drug benefits need to enroll in a Medicare Advantage plan that has integrated Part D coverage.
Most Healthcare Providers Accept Medicare
Medicare gives you many options regarding access to doctors, hospitals, specialists, and healthcare providers since its a Federal government program. Original Medicare allows you to get services from any provider who accepts the program. With a Medicare Supplement plan from an insurance company, you can choose the service thats right for your needs. Youll pay lower out-of-pocket costs like deductibles and copays.
Conversely, employer insurance plans have a limited number of hospitals and health providers they contract with, forming a network of individuals and locations. Outside this network, you get no or limited coverage from your health insurance provider, making it difficult to get an appointment, even though you have insurance. For instance, astudy by The Commonwealth Fund shows that 9 percent of individuals with employer insurance struggled to get a referral to a specialist compared with 2 percent of 65-plus individuals with Medicare.
Read Also: Who To Talk To About Social Security Benefits
Explaining Medicare Part D: What You Need To Know
Medicare Part D is a federal program that provides prescription drug coverage to individuals who are enrolled in Medicare. It helps cover the costs of medications prescribed by your doctor, as well as preventive and immunization services. This article will explain the definition of Medicare Part D, the eligibility requirements, coverage benefits, and cost considerations. We will also discuss how to choose the right plan for you and how to enroll in Medicare Part D.
People Are Also Reading
The Inflation Reduction Act also makes adult vaccines recommended by the Advisory Committee on Immunization Practices including the shingles vaccine available with no deductible and no cost-sharing to individuals with Medicare prescription drug coverage . This makes coverage of vaccines under Medicare Part D consistent with coverage of vaccines under Medicare Part B, such as the flu and COVID-19 vaccines.
Individuals can schedule their Shingrix vaccination by contacting their local Hy-Vee Pharmacy. Shingrix is a two-dose vaccine that is recommended for individuals 50 years and older. Individuals should get their second Shingrix dose 2 to 6 months after their first dose.
Read Also: Aarp Medicare Advantage Dental Benefits
How To Enroll In Medicare Part D
Typically, if you qualify for Medicare, you qualify for Part D prescription drug coverage. But its important to keep in mind that you may enroll in Part D coverage only in a few specific periods:
- Your Medicare Initial Enrollment Period : You can enroll in a Part D plan in the 3 months you turn 65, the month of your 65th birthday or 3 months after.
- The Medicare Annual Enrollment Period : This runs from Oct. 15 to Dec. 7 every year. During the AEP, you may make changes to your Medicare Part C and Part D coverage. They will take effect on Jan. 1 of the following year.
- The Medicare Advantage Open Enrollment Period : This lasts from Jan. 1 to March 31 each year. You may add, drop or change your Part D coverage during this time.
- Special Enrollment Period : You may be able to enroll in a new Part D plan if youre eligible for an SEP. You may qualify for an SEP under certain circumstances, such as if you make changes to a job-based drug coverage plan, or if you have or lose Extra Help.
What Is Medicare Part D Prescription Drug Coverage
Medicare Part D helps cover the cost of prescription drugs. Part D is optional and only provided through private insurance companies approved by the federal government. However, Part D is offered to everyone who qualifies for Medicare. Costs and coverage may vary from plan to plan. Read on to learn more about Medicare Part D prescription drug coverage, how to get it and what it covers.
Also Check: View My Social Security Benefits Online
How To Get Prescription Drug Coverage
There are 2 ways to get :
Protect Yourself Against Fraud
Companies approved to offer the Medicare prescription drug benefit can only contract with state licensed agents to sell their plans. Agents are required to follow state and federal laws when selling these plans. Ask agents to show proof of their license and verify the information by calling our Help Line at 800-252-3439.
If you believe you’ve been the victim of insurance fraud or attempted insurance fraud, report it to TDI.
You May Like: Do Teachers Get Retirement Benefits
When Should I Sign Up For Medicare Part D
Even if youre not currently taking medications, the best way to avoid costly, lifetime late-enrollment penalties in the future is to enroll in Medicare Part D as soon as youre eligible for Medicare.
The time of year you choose to sign up for Medicare Part D is important and can impact both costs and eligibility. The seven months of enrollment eligibility framing your 65th birthday apply to Parts A and B, as well as Part D. However, there are a few windows of opportunity for making changes, as follows:
During this Annual Enrollment Period , people may join a new plan or switch from traditional Medicare to Medicare Advantage plans. Their new drug coverage will begin on the first day of the following year. If your plan isnt rated 5-stars, now is the time to switch to one.
During this Medicare Advantage Open Enrollment Period , a person can leave a Medicare Advantage plan and enroll in a Medicare Part D plan alongside traditional Medicare.
Special Enrollment PeriodDuring a Special Enrollment Period , people can sign up for Medicare Part D plans. Reasons for entering SEPs include moving out of a coverage area or entering a nursing home.
During this one-time SEP, a person can choose to join a plan with a 5-star rating from Medicare.
The Medicare Drug Plan: 6 Key Facts
Anyone who has Medicare Part A or Part B can get Part D coverage regardless of income or health.
You are not obligated to enroll, but there may be consequences if you dont sign up when you are first eligible to do so.
To get Medicare drug coverage, you must select one approved private drug plan among many offering different choices. There is no single government plan.
Is your income limited? If you qualify for a part of the program known as Extra Help. youll pay very little for your medications.
Are your drug costs very high? Youll pay no more than 5 percent of the cost of each prescription after youve spent a certain amount of money out-of-pocket in any one year.
Do you have better drug coverage already? You probably wont need Medicares Part D coverage. But its wise to check.
- Access to hundreds of discounts and programs
- Subscription to AARP The Magazine
- Free second membership for any adult in your household
Continue Enjoying Your Member Benefits!
- Hundreds of discounts, programs and services
- Subscription to AARP The Magazine
- Free membership for your spouse or partner
Start Getting Your Member Benefits Today!
- Hundreds of discounts, programs and services
- Subscription to AARP The Magazine
- Free membership for your spouse or partner
You May Like: Is Social Security Survivor Benefits Taxable
An Overview Of Medicare Part D Benefits
Medicare Part D provides coverage for prescription drugs, preventive and immunization services, and certain extra benefits. Heres an overview of whats covered:
- Prescription drug coverage Part D plans cover both generic and brand name medications prescribed by your doctor.
- Preventive and immunization services Part D plans cover certain preventive services, such as annual wellness visits, screenings for diabetes and cancer, and immunizations.
- Extra benefits Some Part D plans may offer additional benefits, such as coverage for over-the-counter medications and dental services.
Medicare Part D Benefits
When it comes to prescription medications, Original Medicare doesnt cover much. Medicare Part A only covers medications prescribed while in the hospital. To get Part D benefits for prescription drugs, you will need to sign up for a Medicare prescription drug plan. Medicare beneficiaries have two options for coverage:
Both options differ in cost, coverage, and benefits so its best to compare plans to find out which is the right fit for your needs. In this article, we will be discussing Medicare Part D and its coverage. Also known as Prescription Drug Plan , Medicare Part D is the part of Medicare that covers most outpatient prescription medications. Private carriers offer Part D as stand-alone plans as well as other Medicare plans. They are available to anyone 65 years or older, or those with a qualifying disability. To be eligible for coverage, you must enroll in Medicare Part A and/or Part B and live in the plans service area. For a more in-depth look at what Medicare Part D covers, visit: What Does Medicare Part D Cover.
Recommended Reading: Social Security Give Back Benefit
Medicare Part D Coverage Is Offered Through Private Plans That Are Approved By The Federal Government Beneficiaries Who Enroll In Medicare Fee
Established in 2006 by the Medicare Modernization Act , more than 42 million, or roughly 73% of all Medicare beneficiaries, are now enrolled in Medicare Part D coverage, either through standard PDPs or Medicare Advantage Prescription Drug plans .
While Part D was considered controversial at the time of its passage, primarily due to the cost to government and the use of private plans to operate the new benefit, Part D has been a successful program. It greatly expanded coverage for prescription drugs to millions of Medicare beneficiaries, and the annual costs of the program have been below spending projections.
#ValueOfMAPD
Understanding The Cost Of Medicare Part D
The cost of a Medicare Part D plan depends on the plan you choose and the medications you need. Generally, Part D plans have premiums, deductibles, and copayments. The premium is the amount you pay each month for your plan. The deductible is the amount you must pay before your plan begins to cover your medications. Copayments are the amounts you pay when you fill a prescription.
Don’t Miss: Is There Any Benefit To Filing Taxes Jointly
Return Of The 48 Hour Soa Rule
For those of you who were writing Medicare Advantage and Part D prescription drug plans prior to 2018 will remember that once you obtained the completed Scope of Appointment form that you had to wait 48 hours before you could meet with the prospect. In 2018 this requirement was reduced to allowing the agent to get the completed SOA even on the day of the appointment .
The Centers for Medicare & Medicaid Services has proposed the returning to the 48 hour rule which will once again require agents to obtain the completed SOA at least 48 hours prior to the sales appointment. In addition, the SOA will be valid only for 6 months from the Medicare beneficiarys signature date on the form.