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Medicare Part D: What You Need To Know

Ruzanna Harutyunyan's picture

Ms. Chandler began by giving a brief history of the Medicare Rights Center (MRC): Founded in 1989, it is a nonprofit organization that helps older adults and people with disabilities obtain high-quality and affordable health care. It is the largest independent source of Medicare information and assistance in the United States.
What is the Medicare prescription drug benefit (Part D)?

While drugs that you get during overnight stays in a hospital or nursing home are covered by Medicare Part A, and other drugs that your doctor administers to you or that you get at a dialysis facility are covered by Medicare Part B, Part D of the Medicare plan outlines outpatient prescription drug coverage through your pharmacy or by mail order. It is available only through private insurance plans.

Details include the following:

* It is not income-based. Anyone who receives Medicare is also eligible for this plan.
* It is voluntary for most Medicare recipients.
* The decision to enroll should be made in consideration with one’s current needs and coverage.

How does it work?

A private drug plan must be chosen that works with your Medicare coverage. There are two types of arrangements – Original Medicare and Medicare Advantage – that provide this coverage.

* Original Medicare: This combines a private health plan’s stand-alone prescription drug plan (PDP) with Original Medicare coverage of doctor and hospital services. (If you keep Original Medicare, it is necessary to have a private, separate drug plan through a medical insurance company.)

* Medicare Advantage: This is a comprehensive Medicare private health plan that (with some exceptions) provides all benefits (doctors, hospitals, drugs) under the same plan (MA – PDP). This arrangement may require that you pay an additional monthly premium for medical benefits. (This is the plan that is discussed in this presentation. PDP refers to “private drug plan.” This is the Managed Care portion of Medicare.)

Drug plans vary widely and there are many from which to choose (New York has 55). Each plan has different costs, covers different lists of drugs (formularies), and has its own network of pharmacies.

Note from the MRC website: If you are in an HMO or PPO you must receive all of your medical and drug coverage through that plan. If you are in a Private Fee-for-Service (PFFS) plan that does not offer drug coverage, or have a Medicare Medical Savings Account (MSA) or Medicare Cost Plan, you can enroll in a stand-alone prescription drug plan. Prior authorization is required. (Approval must be obtained from your plan before it will pay for some drugs.)

What is the cost of Medicare D?

Each plan has a different cost. Each plan’s coverage offers at least the basics of the general plan in general Medicare, but most plans under Medicare D look very different from Medicare’s basic plan. This can be discussed with your pharmacist, or you may contact a Medicare Rights Center counselor and discuss the benefits and drawbacks of the plan that is being considered.

Each plan charges different premiums, deductibles, and co-pays, and there are four different “tiers” of drugs:

* Tier 1: Generics
* Tier 2: Preferred Brand-Name
* Tier 3: Non-Preferred Brand-Name
* Tier 4 and above: “Specialty” Drugs

The national average premium for 2008 is $27.93, but if your income and assets are very low, you can get help with the costs of Medicare D through a federal program called Extra Help.

Are all drugs covered under Medicare D?

Each plan has its own list of drugs that are covered (formulary) and its own list of in-network pharmacies. Drugs in the formulary are covered only when purchased from in-network pharmacies.

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Each plan must cover almost all drugs in the following classes:

* Antidepressants
* Anticonvulsants
* Antipsychotics
* Antiretrovirals (AIDS medications)
* Immunosuppressants
* Anticancer meds

Even if your drug(s) is in one of these classes, you should still check that it is included in your plan’s formulary list.

The following are drugs that are not covered by Medicare:

* Drugs for anorexia, weight loss, or weight gain
* Fertility
* Cosmetic purposes or hair growth
* Drugs for relief of cold symptoms (congestion or cough)
* Erectile dysfunction
* Prescription vitamins and minerals, except prenatal and fluoride
* Over-the-counter drugs
* Barbiturates (phenobarbital, valium, xanax)

There are limitations to this coverage. In general, brand-name drugs will cost more than generic ones. Also, many drugs that are covered may have restrictions:

* Step-therapy: you must try certain medications before the plan will pay for the more expensive ones.
* Prior authorization: approval must be obtained from your plan before it will pay for some drugs.
* Quantity limits: there may be a certain amount of a medication that a plan will approve each month.

What if drugs you need are not covered in your plan?

It can be a very complicated process to request a transition period, but your pharmacist should be able to help with this, and your doctor can request an exception to obtain continued coverage or to change to a drug that is covered. If your plan denies your exception request, get professional help to appeal (Medicare Rights Center can help).
Is help available to pay for Medicare D?

Extra Help is a federal program that helps pay for some or most of the cost of Medicare drug coverage. Here are some points to consider:

* You are eligible if your income is below $1,301 a month, $1,751 for couples and if your assets are below $11,990 or $23,970 for couples.
* You would have low or no premiums and deductible.
* Co-payments cannot exceed 15% of the cost of the drug.
* The level of Extra Help for which you are eligible (full or partial) depends on your income and assets.

“Full” Extra Help:

* As long as you choose a plan that has a premium below your state’s “benchmark” (the premium amount that Extra Help will pay in full in your state), there is no premium or deductible.

* The co-pay amount depends on your income and if you have full Medicaid, but it can range from $1.05 to $5.60, at the maximum.

* After the total (co-pay plus plan payout) cost reaches $5,726.25 (catastrophic coverage), you pay nothing.

“Partial” Extra Help:

* There is a sliding-scale premium based on income.
* Deductible is up to $56.
* You pay the maximum of 15% for each drug; if the standard co-pay for the drug is lower, then you pay the lower amount.
* After total of $5,7626.25 (catastrophic coverage), then co-pay ranges from $2.60 to $5.60.

The EPIC program:

* Is a program for those 65 and over (NY State has just passed a law to include those 55 and over, but this has not yet gone into effect) that is for New York State residents only.
* It is designed to help those with higher income levels and do not meet “Extra Help” requirements.
* It will serve as a type of “discount” card for drugs.