Prescription Drug Plans
Medicare Prescription Drug (Part D) Plans
Did you know that prescription drugs were not included as a part of Medicare until 2006? That’s right! In 2003, Congress approved the Medicare Prescription Drug, Improvement, and Modernization Act which gave CMS a couple years to develop parameters and guidelines for prescription drug plans as they pertain to Medicare. Now we have Medicare Part D, also known as Medicare Rx. These are plans that help you pay for your outpatient prescription drugs purchased at retail stores, mail order, and long-term care facilities. Part D plans are privatized, meaning that they are approved by Medicare, but administered by private insurance companies. These companies are subsidized and regulated by Medicare, who monitors each plan to ensure they are providing certain levels of coverage.
So how do Part D plans work? Let’s simplify things a bit for you… Part D plans are all unique, meaning that there is not a one size fits all. The private insurance carrier that administers the plan determines what coverage they offer. Granted, there is some standardized coverages that exist, typically you can have issues when it comes to formularies. Plans revise their formularies every year, adding new drugs, eliminating others, and generally charging higher co-pays and co-insurance for drugs. This is why it is important to re-evaluate your plan each year to ensure you are properly covered!
Are there any costs associated with Part D plans? Glad you asked… Yes, there are! Part D plans will have an additional monthly premium on top of your Original Medicare, an annual deductible (sometimes waived), co-payments, co-insurances, and a gap in coverage called the Donut Hole. Yes, that is a real thing. This means there’s a temporary limit on what the drug plan will cover for drugs.
Not everyone needs a Prescription Drug Plan. If you have a Medicare Advantage Plan for example that already includes a prescription drug benefit, then your covered! Typically, Part D plans are used when a person wants to stay on Original Medicare (Part A and Part B).
Late Enrollment Penalty for Part D
Just like Part B, you could get a late enrollment penalty if you have a period of 63 days without Part D or other creditable drug coverage. The late enrollment penalty is calculated each year by multiplying 1% of the national base beneficiary premium by the number of full, uncovered months you were eligible. We know that is a lot to take in… To simplify things, give us a call. We can walk you through this whole Part D stuff and make sure that you have the coverage you need moving forward!
Have A Licensed Independent Insurance Agent Help You…
At Greystone Insurance Solutions, we are here to help navigate the complexities of Medicare to ensure you have the coverage you need! With things like coverage limitations and no out-of-pocket maximums, it is important to make sure you know all of your options! Contact us today for a free Medicare review. Together, we will discuss things like your current healthcare needs, prescription drugs, preferred physicians, and more. Then, we can help you understand what each plan offers and what is going to benefit you more in the long run!