By Caitlin Granfield November 16, 2019 07:00 AM
Choosing a Medicare prescription drug plan under Open
Enrollment can be difficult. Picking the plan that works best for your
medications will save you money. Dreamstime
TNS
Under
Medicare Part D, which covers prescription medications, plans are offered by
insurance companies, and seniors select the plans during open enrollment period
each fall.
Last
year, according to the Centers for Medicare & Medicaid Services (CMS), 43
million of the 60 million people covered through Medicare had prescription drug
coverage under a Medicare Part D plan. Most of those (58 percent) are covered
under a stand-alone prescription drug plan (PDP) but a growing share (42
percent) are enrolled in Medicare Advantage prescription drug plans (MA-PDs).
The
annual Medicare Open Enrollment period began on Oct. 15 and continues until
Dec. 7, for 2020 coverage. During the annual enrollment period, you can make
changes to various aspects of your coverage, including switching from one
Medicare Advantage plan to another, or from one Medicare Part D (prescription
drug) plan to another.
When in the Donut Hole
Most
Medicare drug plans have a coverage gap, also called the “donut hole” or
“doughnut hole,” which places a emporary limit on what the drug plan will cover
for drugs.
The
coverage gap begins after you and your drug plan have spent a certain amount
for covered drugs. This year, once you and your plan have spent $3,820, you’re
in the coverage gap. The amount may change each year. Those with Medicare who
qualify for Extra Help, an income-based program, won’t enter the coverage gap.
When
in the donut hole, the amount you pay for your prescriptions increases.
However, as a result of the Affordable Care Act, federally funded discounts are
available, which helps pay for drugs during the donut hole.
This
year, there is a 75% discount for most brand-name drugs, paid for by the
manufacturer and the federal government — with the enrollee responsible for
covering the remaining 25% of the cost. For generic drugs, the government
provides a 63% discount — the remaining 37% is paid by the enrollee.
Getting Out of the Donut Hole
In
all Part D plans, after you have paid $5,100 in out-of-pocket costs for covered
drugs, you leave the donut hole and reach catastrophic coverage. During this
period, you pay significantly lower co-pays for your covered drugs for the
remainder of the year.
Per
MedicareInteractive.org, an information website by the Medicare Rights Center,
the out-of-pocket costs that help you reach catastrophic coverage include: your
deductible; what you paid during the initial coverage period; nearly the full
cost of brand-name drugs (including the manufacturer’s discount) purchased
during the coverage gap; and amounts paid by State Pharmaceutical Assistance
Programs (SPAPs), and other drug assistance programs.
Costs
that do not help you reach catastrophic coverage include monthly premiums, the
cost of non-covered drugs, the cost of covered drugs from pharmacies outside
your plan’s network, and the 63% generic discount. During catastrophic
coverage, you will pay 5% of the cost for each of your drugs, or $3.40 for
generics and $8.50 for brand-name drugs (whichever is greater).
Your
Part D plan tracks how much you have spent out of pocket for covered drugs, and
you will receive a running total in the monthly statements that you receive
from the insurance company.
Paying More Out of Pocket
Increasingly,
Medicare recipients are paying more out of pocket expenses on their
prescription drugs through the donut hole.
Medicare
is a health insurance program for people age 65 or older, those under age 65
with certain disabilities, and for those of all ages with End-Stage Renal
Disease (permanent kidney failure requiring dialysis or a kidney transplant).
Specialty-tier
drugs for multiple sclerosis, cancer and other conditions — defined by Medicare
as those that cost more than $670 a month — account for more than 20 percent of
total spending in Part D plans, up from about 6 percent before 2010, according
to a report by the Medicare Payment Advisory Commission, a nonpartisan agency
that advises Congress about the program.
Just
over 1 million Medicare beneficiaries’ in Part D plans who did not receive
low-income subsidies had drug costs that pushed them into catastrophic coverage
in 2015, more than twice as many as the 2007 total, an analysis by the Kaiser
Family Foundation (KFF) found.
“When
the drug benefit was created, 5 percent (what people are responsible for during
catastrophic coverage) probably didn’t seem like that big a deal,” said
Juliette Cubanski, associate director of the Program on Medicare Policy at the
Kaiser Family Foundation, in an article published on Kaiser Health News.
“Now
we have such expensive medications, and many of them are covered under Part D —
where, before, many expensive drugs were cancer drugs that were administered in
doctors’ offices and covered by other parts of Medicare,” she said.
Closing the Donut Hole
Prior
to 2011, Medicare Part D enrollees paid the full cost of their medications
while in the donut hole.
Since
then, the Affordable Care Act (ACA) has been steadily closing the donut hole,
and it will be fully closed by 2020, when enrollees in standard Part D plans
will pay 25 percent of the cost of their drugs all the way up to the
catastrophic coverage threshold, according to medicareresources.org.
The
Bipartisan Budget Act of 2018 (BBA 2018) closed the donut hole one year early —
this year, for brand-name drugs. As a result, out-of-pocket costs for
brand-name drugs are limited to 25 percent of the cost in 2019 (down from the
30 percent that was originally scheduled) and 37 percent of the cost of generic
drugs (down from 44 percent in 2018).
The
cost of closing the donut hole one year early was shifted onto drug
manufacturers. The donut hole will also close for generic drugs in 2020, when
enrollees will pay no more than 25 percent of the cost of generics.
The
Medicare Part D maximum deductible will be $435 in 2020, according to
medicareresources.org.
What Drug Plans Cover
Each
Medicare drug plan must give at least a standard level of coverage set by
Medicare. Plans can vary the list of prescription drugs they cover (called a
formulary) and how they place drugs into different “tiers” on their formularies.
Every
Medicare Prescription Drug Plan has a formulary — that is, a list of covered
drug. The formularies vary among plans and may change at any time. Enrollees
should be notified by mail or email when these changes occur.
Plans
cover both generic and brand-name prescription drugs. The formulary includes at
least two drugs in the most commonly prescribed categories and classes, but
plans can choose which specific drugs they cover.
The
formulary might not include your specific drug, but in most cases a similar
drug should be available. If you or your doctor believes none of the drugs on
your plan’s formulary will work for your condition, you can ask for an
exception, according to Medicare.gov.
As
drug therapies change, new drugs are released, and new medical information
becomes available, your plan may change its drug list during the year.
Plans
may also suddenly remove drugs from their formularies after the Food and Drug
Administration (FDA) considers them unsafe or if their manufacturer removes
them from the market, according to Medicare.gov.
Plans
also can immediately remove brand name drugs from their formularies and replace
them with new generic drugs, or they can change the cost or coverage rules for
brand name drugs when adding new generic drugs. If you’re currently taking any
of these drugs, you’ll get information about the specific changes made
afterwards.
For
other changes involving a drug you’re taking, your plan must either give you
written notice at least 30 days before the date the change becomes effective,
or provide a written notice of the change and at least a month’s supply under
the same plan rules as before the change, at the time you request a refill.
If
you use a drug that isn’t on your plan’s drug list, you’ll have to pay full
price instead of a co-payment, unless you qualify for a formulary exception.
Tiers of medications
To
lower costs, many plans place drugs into different “tiers” on their
formularies. Here’s an example of a Medicare drug plan’s tiers, as shown on
Medicare.gov’s website:
Tier
1 Lowest co-payment: most generic
prescription drugs
Tier
2 Medium co-payment: preferred, brand-name
prescription drugs
Tier
3 Higher co-payment: non-preferred, brand-name
prescription drugs
Specialty
Tier Highest co-payment: very high cost
prescription drugs
In
some cases, if your drug is in a higher (more expensive) tier and your medical
provider thinks you need that drug instead of a similar drug on a lower tier,
you can file an exception and ask your plan for a lower co-payment, according
to Medicare.gov.
You
can get Medicare Part D coverage through a stand-alone Medicare Prescription
Drug Plan if you’re enrolled in Original Medicare. If you’re enrolled in a
Medicare Advantage plan, you can get this coverage through a plan that includes
drug benefits, also known as a Medicare Advantage Prescription Drug Plan.
Different
insurers offer different types of plans, so your monthly plan premium and
out-of-pocket expenses for prescription drugs will vary from plan to plan.
Get Help Paying for Prescriptions (Medicare
Savings Programs)
State
Medicare Savings Programs (MSP) programs help pay premiums, deductibles,
coinsurance, co-payments, and prescription drug coverage costs.
In
some cases, Medicare Savings Programs may also pay Medicare Part A (Hospital
Insurance) and Medicare Part B (Medical Insurance) deductibles, coinsurance,
and co-payments if you meet certain conditions.
Medicare
beneficiaries receiving the low-income subsidy (LIS) can get assistance in
paying for their Part D monthly premium, annual deductible, coinsurance, and
co-payments. The amount of subsidy depends on the individual’s income compared
to the Federal Poverty Level and resource limitations set by the Social
Security Act.
To
see if you qualify for a Medicare Savings Program in your state, call the State
Medical Assistance Office /Florida Agency for Health Care Administration, toll
free at (866) 762-2237, or call 1-800-MEDICARE (1-800-633-4227).
Contact Information
▪ SHINE
(Serving Health Insurance Needs of Elders) is a free program offered by the
Florida Department of Elder Affairs and the local Area Agency on Aging.
Specially trained volunteers can assist with Medicare, Medicaid, and health
insurance questions by providing one-on-one counseling and information. Call
1-800-96-ELDER for to talk with a volunteer.
▪ To
enroll in Part D, you can do so directly through Medicare at www.Medicare.gov.
If you are currently enrolled in Medicare, you are eligible for a Medicare Part
D prescription drug plan.
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