Medicare Part D Prescription Drug Plans
Part D adds prescription drug coverage to Original Medicare and some Medicare Advantage plans. These plans are offered by private companies approved by Medicare, and must follow guidelines established by The Centers for Medicare and Medicaid Services.
When to enroll in Medicare Part D
If you are enrolled in Medicare Part A and/or Part B and live in your plan’s service area, you can enroll in the Medicare drug benefit (Part D) during your Initial Enrollment Period (IEP).
Your IEP for Part D will usually be the same as for Part B: the seven-month period that includes the three months before the month you become eligible for Medicare, the month you are eligible, and three months after the month you become eligible. For example, if you become eligible for Medicare when you turn 65 on May 15, your IEP will be February 1 to August 31.
- Note: If you are disabled and are turning 65 you will qualify for a new Part D IEP. That IEP will last seven months including the three months before you turn 65, the month you turn 65, and the three months after you turn 65. If you were paying a Medicare drug benefit premium penalty because you signed up late for Part D before you turned 65, you will no longer have to pay this once your Part D IEP begins.
If you join a Medicare drug plan during the three months before you are eligible for Medicare, your coverage will start the month you become eligible. If you join a Medicare drug plan during the month you become eligible, or during the three months afterward, your drug coverage will start the first of the month after you enroll. You should enroll early during your IEP to make sure that your coverage begins as soon as you are eligible.
If you do not join a Medicare drug plan during your Initial Enrollment Period, you may not be able to enroll until Fall Open Enrollment. Open Enrollment begins October 15 and ends December 7. Changes and enrollments made during Open Enrollment become effective January 1. You may also have to pay a premium penalty.
You may also have a Special Enrollment Period to enroll in Part D under exceptional circumstances, including if:
- you get Extra Help; or
- you lose employer drug coverage.
How to get drug coverage
Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to get Medicare drug coverage when you're first eligible, you'll likely pay a late enrollment penalty unless one of these applies:
- You have other creditable prescription drug coverage
- You get Extra Help: Low-Income Subsidy (LIS) or Medicaid
To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
What’s the Part D late enrollment penalty?
The late enrollment penalty is an amount that’s added to your Part D premium. You may owe a late enrollment penalty if, at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Part D coverage.
- Note: If you get Extra Help, you don’t pay a late enrollment penalty.
3 ways to avoid paying a penalty:
- Join a Medicare drug plan when you’re first eligible. Even if you don’t take many prescriptions now, you should consider joining a Medicare drug plan to avoid a penalty. You may be able to find a plan that meets your needs with little to no monthly premiums.
- Don’t go 63 days or more in a row without a Medicare drug plan or other creditable coverage. Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs, or health coverage. Your plan must tell you each year if your drug coverage is creditable coverage.
- Tell your Copeland agent about any drug coverage you had if they ask about it. If you don’t tell the agent about your creditable prescription drug coverage, you may have to pay a penalty for as long as you have Part D coverage.
How much more will I pay?
The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” by the number of full, uncovered months that you were eligible but didn’t join a Medicare drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium. Since the “national base beneficiary premium” may increase each year, the penalty amount may also increase each year. After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be.
Consider all your drug coverage choices
Before you decide, learn how Part D works with your other drug coverage. For example, you may have drug coverage from an employer or union, TRICARE, the Department of Veterans Affairs (VA), or the Indian Health Service. Compare your current coverage to Medicare drug coverage. The drug coverage you already have may change because of Medicare drug coverage, so consider all your coverage options.
If you have (or are eligible for) other types of drug coverage, read all the materials you get from your insurer or plan provider. Talk to your Copeland licensed agent before you make any changes to your current coverage.
What’s the coverage gap?
Some Medicare drug plans have a coverage gap. This means that after you and your drug plan have spent a certain amount of money for covered drugs, you may have to pay more for your prescription drugs up to a certain limit.
Each month that you fill a prescription, your drug plan mails you an “Explanation of Benefits” (EOB) notice, which tells you how much you’ve spent on covered drugs and if you’ve reached the coverage gap.
Over the next several years, you’ll pay less in the coverage gap until it’s closed in 2020. By 2020, you’ll pay no more than 25% for covered brand-name and generic drugs during the gap—the same percentage you pay from the time you meet the deductible (if your plan has one) until you reach the out-of-pocket spending limit (up to $4,950 in 2017).
Brand-Name Prescription Drug Savings in the Coverage Gap
Your Plan Pays
Generic Drug Savings in the Coverage Gap
Your Plan Pays
These costs (sometimes called true out-of-pocket, or “TrOOP,” costs) all count toward you getting out of the coverage gap:
- Your yearly deductible, coinsurance, and copayments
- The discount you get on covered brand-name drugs in the coverage gap
- What you pay in the coverage gap
The drug plan premium and what you pay for drugs that aren’t covered don’t count toward getting you out of the coverage gap.
Some plans offer additional cost-sharing reductions in the gap beyond the standard benefits and discounts on brand-name and generic drugs, but they may charge a higher monthly premium. Check with the plan first to see if your drugs would have additional cost-sharing reductions during the gap.
Once you get out of the coverage gap, you automatically get “catastrophic coverage.” With catastrophic coverage, you only pay a coinsurance amount or copayment for covered drugs for the rest of the year.
Should I review my Medicare Part D plan choice every year?
It is very important that you review your drug plan every year. Medicare drug plans can change their costs and the list of drugs that they cover every year.
Most people can only change Medicare drug plans during Open Enrollment (also called the Annual Enrollment Period), which runs from October 15 to December 7 each year.
You may also be able to change your Part D plan during the Medicare Advantage Disenrollment Period (MADP) if you have a Medicare Advantage Plan. The MADP occurs every year, from January 1 to February 14. If you have a Medicare Advantage Plan you will be able to switch to Original Medicare with or without a stand-alone prescription drug plan. Changes made during this period will become effective the first of the following month. For example, if you switched from a Medicare Advantage Plan to Original Medicare and a stand-alone prescription drug plan in February, your new coverage would begin March 1.
Even if you are satisfied with your current Medicare coverage, you should check if there is another plan in your area that offers better coverage at a lower price. Have a Copeland Insurance agent look at other Medicare options in your area and compare them with your present coverage to see which plan will best suit your needs in the upcoming year. Research shows that people with Part D plans could lower their costs by shopping among plans each year. For example, another Part D plan in your area may cover the drugs you take with fewer restrictions and charge you less.
When choosing a Medicare drug plan, make sure to look at all the costs, not just the premium. Your costs throughout the year will depend on what drugs you take, whether your plan covers them, and whether there are any coverage restrictions. Another plan may have lower copays, cover more of your drugs, have fewer restrictions or offer some coverage during the coverage gap.
If you are considering joining a Medicare Advantage Plan to get drug coverage, remember that you will get all your Medicare benefits from that plan. Look beyond the drug coverage; make sure the plan covers you to go to the doctors, hospitals, and pharmacies you prefer to use at a cost you can afford.
How to review your current plan:
- Review your plan’s Annual Notice of Change. Each fall, your Medicare drug plan will send you a notice explaining how your plan’s coverage and costs are changing for the next year. Your plan must send you this notice before September 30th. If you do not receive it by this time, call your Copeland sales agent.
- Find out whether your drugs will be covered next year. You should call your agent and ask, as plans are only required to send you a shortened list of covered drugs (formulary). Also, find out if your copays will change and whether the plan is adding any coverage restrictions that will require your doctor to ask for special permission before the plan will cover your drugs.
If your doctor had to make a special request for your plan to cover a drug for you this year (such as a prior authorization or exception request), and you will need the same medication next year, call your agent and find out what you must do to make sure your plan keeps covering your drug. Your doctor may have to make a new request, and he may be able to do so before the end of this year to ensure your drug will still be covered next year.
If your plan will no longer cover a drug you are taking, your plan must help you complete the exception process or change to another formulary drug before the end of the year. If the plan fails to do this, your plan must provide you a 30-day supply of the drug during the first 90 days of the year, and send you a notice explaining that the prescription is temporary and that you must file an exception to continue taking it.
Once you have reviewed your current plan, see what other options are available in your area. Call Copeland Insurance Group and a licensed sales agent can help you find what you have available.
Changing your Medicare Part D Plan
In most cases, you will only be able to change your Medicare prescription drug plan once a year during Fall Open Enrollment. Fall Open Enrollment occurs between October 15 and December 7 of every year. If you make a change during this time, your new coverage will begin January 1. You can change plans as many times as you need during Fall Open Enrollment, with your last choice taking effect January 1. However, to avoid enrollment problems, it is best to make as few changes as possible.
You may also be able to change your Part D plan during the Medicare Advantage Disenrollment Period (MADP) if you have a Medicare Advantage Plan. The MADP occurs every year, from January 1 to February 14. If you have a Medicare Advantage Plan you will be able to switch to Original Medicare with or without a stand-alone prescription drug plan. Changes made during this period will become effective the first of following month. For example, if you switched from a Medicare Advantage Plan to Original Medicare and a stand-alone prescription drug plan in February, your new coverage would begin March 1.
You may also be able to change plans during a Special Enrollment Period (SEP) if any of the following events takes place:
- You have or lose Extra Help.
- You move out of your plan’s service area.
- You are admitted into or reside in a qualifying institution.
- You choose to change your employer, retiree, or union prescription drug coverage for any reason.
- You disenroll from your Medicare Advantage Plan and go back to Original Medicare if you joined the plan when you first qualified for Medicare based on age and want to disenroll within the first year you joined the plan.
- Your Medicare prescription drug plan stops offering coverage, fails to provide benefits on a timely basis, or misled you about what benefits you would get.
- You receive inadequate information about whether your existing prescription drug coverage is comparable to Medicare’s.
- You enroll or fail to enroll in a Medicare prescription drug plan because of a federal employee’s error.
- You enroll in an All-inclusive Care for the Elderly (PACE) program.
- You become eligible for a Special Needs Plan (SNP).
- There is a five-star plan in your service area you would like to switch join. You have an SEP to switch into a five-star plan from your current plan. The five-star SEP encourages Medicare Advantage and stand-alone Part D plans to improve their quality ratings. You can enroll into a new Medicare Advantage Plan or stand-alone Part D plan that was given an overall plan performance rating of five-stars once per calendar year.
After the first 60 days of the year, a Medicare prescription drug plan can change the drugs it covers (its formulary). However, your plan should continue to cover the drug until the end of the calendar year unless there are safety issues or there is a generic form of your drug.
You do not have the right to a Special Enrollment Period if your plan stops covering a drug you need.
To switch plans, you should usually enroll in your new plan without disenrolling from your old plan. Enroll early during an enrollment period to make sure that your new coverage starts when it should. You will be automatically disenrolled from your previous Medicare drug plan when your new coverage starts.