Medicare Prescription Drug Plan
The Comprehensive Guide to Medicare Part D
Medicare Prescription Drug Plan – Medicare Part D is the federal government’s prescription drug program; that covers both brand-name and generic prescription drugs at participating pharmacies in your area. The coverage is available to all people eligible for Medicare, regardless of income and resources, health status, or current prescription expenses. Medicare prescription drug coverage provides protection for people who have very high drug costs.
Find a Medicare Part D plan in Oregon to help cover your prescription drug costs.
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What Is Medicare Prescription Drug Plan?
The Medicare Prescription Drug Plan (Part D) is a standalone insurance plan that provides coverage for prescription drugs. It is an optional plan that is offered by private insurance companies that contract with Medicare. The plan helps seniors and individuals with disabilities to reduce the cost of prescription drugs, which can be quite expensive.
Medicare Part D in Oregon
- All Oregon Medicare recipients have access to a Medicare prescription drug plan in 2023.
- There are 24 Part D prescription drug plans available in Oregon in 2023.
- Eight Part D prescription drug plans in Oregon participate in the Part D Senior Savings Model, which offers lower out-of-pocket insulin costs than other plans.
Do you need Medicare Prescription Plan (Part D)?
If you use few or no drugs right now, you may be asking yourself if you really need to sign up for a prescription plan. When this dilemma arises, just keep in mind that Medicare Part D is not just a government benefit. It primarily works like insurance.
It ensures that you are protected against high drug costs if and when you need it in the future. On this instance, you can opt for a Part D plan that has the lowest premium which can give you coverage at a lower price.
How Medicare Part D works
Medicare beneficiaries across the country have the choice to register for their prescription drug costs in Medicare Part D.
There are two methods for Medicare prescription drug coverage. Medicare Part D is not automatically included if you have Original Medicare (Part A and Part B). Instead, you can get this coverage by enrolling in a standalone Medicare Prescription Drug Plan that works alongside your Original Medicare benefits.
Who is eligible for the Medicare Prescription Drug Plan (Part D)?
All individuals who are enrolled in Medicare Part A and/or Part B are eligible to enroll in the Medicare Prescription Drug Plan (Part D). This includes senior citizens and individuals with disabilities.
How to get prescription drug coverage?
There are two options for getting Medicare Part D prescription drug coverage:
- By enrolling in a standalone prescription drug plan with Medicare. If you already have Medicare Part A and Part B, you can add a Part D prescription drug plan to your existing coverage.
- By enrolling in a Medicare Advantage plan (Medicare Part C), which typically includes all your Part A and Part B coverage, as well as prescription drug insurance. However, not all Medicare Advantage plans include prescription drug coverage, and you must have Part A and Part B in order to qualify for Medicare Advantage.
What does the Medicare Prescription Drug Plan (Part D) cover?
Each Medicare Part D plan has a list of approved drugs, called a formulary, which determines what medications are covered and what are not. The formulary can vary between plans and some plans categorize their covered drugs into different levels called “tiers.”
Generally, drugs in lower tiers have lower cost-sharing than drugs in higher tiers. Here is an example of a typical Medicare drug plan’s tier system, but it’s important to note that your plan’s tier system could be different:
- Tier 1: Preferred, low-cost generic drugs
- Tier 2: Nonpreferred and low-cost generic drugs
- Tier 3: Preferred brand-name and some higher-cost generic drugs
- Tier 4: Nonpreferred brand-name drugs and some nonpreferred, highest-cost generic drugs
- Tier 5: Highest-cost drugs including most specialty medications.
- HIV/AIDS treatments,
- antidepressants,
- antipsychotic medications,
- anticonvulsive treatments for seizure disorders,
- immunosuppressant drugs
- and anticancer drugs (unless covered by Part B).
- Also, most vaccines must be covered by the plans except for those that covered by Part B.
What drugs are not covered by Part D?
Certain drugs are not covered by Medicare by law, such as drugs used for weight loss or gain and over-the-counter drugs. It’s worth noting that under specific circumstances, your drugs may be covered by Part A or Part B.
Medicare Part D restrictions and limitations
Medicare Part D plans may have certain limitations and restrictions on certain medications, these include:
- Prior authorization: where a doctor may need to get approval from your plan before prescribing certain medications. This is done to ensure that the drug is medically necessary or only approved for certain conditions.
- Step therapy: where plans may require you to try a cheaper medication on the formulary first before moving up to a more expensive drug in cases where the cheaper medication does not work or produces bad side effects for your condition.
- Quantity limits: where plans may limit the amount of medication prescribed over a period of time, this is done to ensure safety or to cut down on costs.
What to do if your drug isn’t covered by Part D?
If you are having difficulty getting coverage for a desired medication, you can try appealing. Your doctor can assist you in submitting a formal request for an exception to a coverage rule, such as requesting coverage for a non-formulary drug or waiving a step therapy requirement for a lower-tier drug.
How much does Medicare Part D cost?
Your costs for Medicare Part D consist of several different payments. The exact amount of these costs may vary depending on your plan, what tier a drug is in or what pharmacy you use.
Monthly Premium
A premium is a regular fee paid on a monthly basis, which is typical for most prescription drug plans. This premium is in addition to the one you pay for Medicare Part B.
Monthly Adjustment
Additionally, If your income exceeds a specific limit, you may be required to pay an additional monthly adjustment payment along with your prescription drug premium. Information about the Part D monthly costs based on income can be found on the Medicare website.
Yearly Deductibles
A yearly deductible is an annual amount that you pay for your prescription drugs before the Medicare drug plan begins to cover the costs. This is a common feature in many plans. The maximum deductible for Medicare drug plans in 2023 is $505.
Copayments or coinsurance
After reaching your yearly deductible, your plan may ask you to pay a portion of the cost of your prescriptions, this is known as copayment or coinsurance. In 2023, once you and your insurance company spend a combined amount of $4,660 (including your deductible), you will not be required to pay more than 25% of the cost for prescriptions. This 25% limit will remain in effect until your out-of-pocket spending reaches $7,400.
Understanding the “donut hole” coverage gap
The “donut hole” coverage gap is a temporary limit on what most Medicare prescription plans cover. This limit is triggered once you and your plan spend a combined total of $4,660 on covered medications. In 2023, once you reach this limit, you will be required to pay a maximum of 25% of the cost for brand-name drugs in your plan. However, even though you only pay a fraction of the cost of your prescriptions, the full price of the drugs will count towards your out-of-pocket costs.
Catastrophic coverage
Once you have reached $7,400 in out-of-pocket expenses in 2023, you will have exited the coverage gap, and will be eligible for catastrophic coverage. Under catastrophic coverage, you will only be responsible for a small percentage or copayment for covered drugs for the rest of the year.
How to get Extra Help for Medicare Part D?
If you earn less than $1,719 per month (or $2,309 for couples) and have limited assets in 2023, you may qualify for Extra Help. Check the income and asset limit chart for more information. Keep in mind that the SSA automatically deducts a $20 disregard from your monthly unearned income when determining eligibility.
When your income is calculated, governmental assistance such as food stamps, housing assistance, and home energy assistance aren’t counted.
Even if your income is higher than the limits, you should still apply for Extra Help if you think you qualify. Some scenarios where you’d still be eligible for Extra Help even though your income is over the limit include if you and/or your spouse:
- Provide financial support for other family members currently living with you
- Earn money by working
- Reside in Alaska or Hawaii
Some people get Extra Help automatically.
These include people who:
- have dual eligibility (enrolled in both Medicaid and Medicare)
- receive Supplemental Security Income (SSI)
- qualify for a Medicare Savings Program
How do I enroll in the Medicare Prescription Drug Plan (Part D)?
Typically, if you are eligible for Medicare, you are also eligible for Part D prescription drug coverage. However, there are specific times when you can enroll in Part D coverage:
- Your Medicare Initial Enrollment Period (IEP): You can enroll in a Part D plan during the three months before or after your 65th birthday.
- The Medicare Annual Enrollment Period (AEP): This is an annual window from Oct. 15 to Dec. 7 during which you can make changes to your Medicare Part C and Part D coverage. Changes made during this period will take effect on Jan. 1 of the following year.
- The Medicare Advantage Open Enrollment Period (OEP): This is another annual window from Jan. 1 to March 31, during which you can add, drop, or change your Part D coverage.
- Special Enrollment Period (SEP): In certain situations, such as changes to job-based drug coverage or changes to Extra Help, you may be able to enroll in a new Part D plan during a SEP.
What is the Part D late enrollment penalty?
The Part D late enrollment penalty is an additional fee that is added to your Part D premium permanently. This penalty may apply if you go 63 consecutive days without having Medicare drug coverage or other creditable drug coverage. “Creditable drug coverage” refers to a drug plan that, on average, pays as much or more than Medicare Part D.
To avoid the late enrollment penalty, it is important to enroll in Medicare Part D or have other creditable drug coverage during your Initial Enrollment Period. If you lose your creditable drug coverage, make sure to enroll in Part D. Additionally, if you continue to have creditable drug coverage, it is important to keep records of your enrollment.
How does Medicare Part D work with other Insurance?
If you are already enrolled in a prescription drug coverage plan, there is usually coordination of benefits between that plan and Medicare. The level of coordination will depend on your current coverage, and Medicare will be either the primary or secondary payer for your prescription drug coverage.
How to find the right Medicare Part D plan?
When choosing a Medicare Part D plan, it’s important to find the one that best suits your needs. Be sure to check the plan’s formulary, which is a list of approved drugs, and the pharmacy network.
Frequently Asked Questions
1. Is the Medicare Prescription Drug Plan mandatory?
No, the Medicare Prescription Drug Plan is not mandatory. However, beneficiaries who do not enroll in the program when they are first eligible may be subject to a penalty if they enroll at a later date.
2. Can I change my Medicare Prescription Drug Plan?
Yes, beneficiaries can change their Medicare Prescription Drug Plan during the annual enrollment period, which runs from October 15th to December 7th.
3. Does the Medicare Prescription Drug Plan cover all prescription drugs?
No, the Medicare Prescription Drug Plan does not cover all prescription drugs. Beneficiaries should check with their insurance plan to determine what medications are covered.
4. How do I know if my prescription drug is covered under the Medicare Prescription Drug Plan?
Beneficiaries can check their prescription drug coverage through the Medicare website or by contacting their insurance plan directly.
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