The Centers for Medicare and Medicaid Services (CMS) recommends
that seniors use the Medicare Part D Plan Finder for 2020 to compare drug
plans. Here are some things to consider when doing so.
Medicare Part D plans offer a
standard level of drug coverage that’s set by Medicare. They are an
optional benefit for anyone eligible for Medicare. To get Medicare drug
coverage, you must first join a Medicare plan that offers prescription drug
coverage.
Drug coverage can differ based on the list
of prescription drugs a plan covers (called a formulary). The
formulary determines how drugs are placed in different “tiers” and priced.
Drugs in a lower tier cost less than those in a higher tier.
For example, here is a description of tiers from Medicare:
·
Tier 1 — Lowest copayment: Most generic prescription drugs
·
Tier 2 — Medium copayment:
Preferred, brand-name prescription drugs
·
Tier 3 — Higher copayment:
Non-preferred, brand-name prescription drugs
·
Specialty tier — Highest copayment:
High-cost prescription drugs
It’s important to note that a formulary might not
include the prescription medications you need. Because of this, it’s
important to determine which drug plan and formulary is best for you.
What
Are the Costs for Medicare Part D Plans?
Some of the costs associated with Medicare Part D include:
·
Premiums
·
Deductibles
·
Copays or coinsurance
·
Late enrollment penalties
Premiums
Depending on the Medicare Part D plan you choose, you’ll pay a premium every
month. The basic cost for the minimum Part D plan in 2020
is $32.74 each month. However, plans with additional coverage will be
more expensive.
There are different ways for you to pay your premium:
·
Have it deducted from your checking
or savings account
·
Charge it to a credit or debit card
·
Have your plan bill you each month
directly
·
Have your premium deducted from your
social security payment each month
Deductibles
The deductible is what you spend for your drugs before your
plan begins to pay. In 2020, no Medicare drug plan is allowed to
charge a deductible of more than $435. There are some plans that
don’t charge a deductible.
Copays or Coinsurance
You will have copayments or coinsurance for
your medications after you pay the deductible if required. You pay
your share, and your Medicare Part D plan will pay its share for covered
drugs.
Late Enrollment Penalties
The Open Enrollment Period for Medicare Part D drug plans is
from October 15 to December 7 every year. This is the time you should enroll.
If you decide to enroll outside this period of time, you will have to pay a late
enrollment penalty.
Late enrollment penalties are calculated by multiplying a 1
percent penalty rate by the national base beneficiary premium (which is $32.74
in 2020) and the number of months you were eligible for Medicare Part D but
didn’t enroll. This is rounded to the nearest 10 cents and added to your
monthly premium.
Are
There Coverage Gaps? What Is The Donut Hole?
The Medicare Part D donut hole is
the term for a coverage gap. This is a temporary limit on what your
plan will cover.
·
The coverage gap takes place when
you’ve spent a certain amount of covered prescription medicines. This amount
can vary each year.
·
In 2020, you’ll enter the donut hole
when your Medicare Part D plan covers $4,020 of your prescription drugs.
·
After you’ve spent $6,350 out
of pocket, you’ll be out of the donut hole.
During this time, you should have to pay no more than 25% of
the cost for your plan’s covered brand-name prescription drugs. This is true
whether you purchase your prescription medicines at a pharmacy or through a
prescription drug mail program.
When it comes to generic drugs, Medicare pays 75% of the
price. In this case, you must pay the remaining 25%. However, unlike with
brand-name drugs, with generic drugs, only the amount you pay counts toward
getting out of the coverage gap.
What
Medications Aren’t Covered by Medicare Part D Plans for 2020?
Some of the drugs that aren’t typically covered by Medicare
Part D include:
·
Non-prescription and
Non-FDA-approved drugs
·
Medications already covered by
Medicare Part A or Part B
·
Over-the-counter medicines
·
Most vitamins and minerals
·
Some anti-anxiety and anti-seizure drugs
·
Drugs that improve fertility or
for sexual dysfunction
·
Medications for weight loss,
anorexia or weight gain (except to treat physical wasting)
·
Drugs for cosmetic purposes and hair
growth
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