If you’re 65 or older, you probably have a Medicare Part D prescription drug plan. If you don’t — and you’re not signed up for other Medicare-approved creditable coverage — you’re most likely accruing a penalty.
And if you think you don’t need to sign up for a plan because you aren’t currently taking prescription drugs, you’re mistaken. It doesn’t matter.
It’s been 11 years since Medicare Part D was enacted, and the program has evolved.
To get up to speed on the rules and regulations, we turned to John Ward, a certified Medicare health insurance counselor with the Metropolitan Area Agency on Aging, an outstanding Minnesota resource that offers free information through its Senior LinkAge Line.
According to Ward, here are some things you need to know:
Drugs, premiums and deductibles
Medicare Part D regulations come directly from the Centers for Medicare and Medicaid Services (CMS), but plans are run and administered by individual insurance providers.
Medicare requires certain drugs to be placed in the formularies of the insurance companies; the rest may differ from plan to plan. All plans have premiums and copays, but they can also charge deductibles of up to $400. Fees vary for both brand-name and generic medications, so it’s important to research availability and costs based on your prescriptions.
Every year, providers can make changes to formularies during the year, according to guidelines set by Medicare. If the change involves a drug you’re taking, your plan must provide written notice to you at least 60 days prior to the date the change becomes effective. Also, at the time you request a refill, your plan must provide written notice of the change and a 60-day supply of your current medication under the same plan rules, prior to the change.
If you disagree with a coverage or payment decision made by Medicare, your Medicare health plan or your Medicare prescription drug plan, you can file an appeal.
Two years into the program, Medicare began imposing penalties. Americans are eligible for Medicare Part D coverage up to three months before and three months after turning 65. If you don’t sign up during this time-period, you’re charged 1 percent of the national base premium ($35.63 in 2017) times the number of months you go without creditable coverage — and it’s a lifetime penalty.
There are fewer Medicare Part D plans available today than in the past, but you still have several creditable options with service provisions to meet your needs. (“Creditable” means the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage.)
Creditable providers are determined by the CMS and provide annual notice (usually in September) as to the current creditability of your plan: This is the best time to review your plan, confirm that it’s meeting your needs and shop for cost comparisons — during the Open Enrollment Period, Oct. 15 to Dec. 7.
There are also other creditable prescription drug plans offered by private companies that contract with Medicare. These Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans and Medicare Medical Savings Account Plans. Health Partners, Blue Cross Blue Shield and Medica also have Cost Plans that include Medicare Part D, so you can choose to keep it all under one roof or choose a separate, stand-alone drug plan.
In Minnesota, the costs of Medicare Part D plans range from $17 a month to more than $100 a month and can change from one year to the next. The rule of thumb is to choose a plan that covers your medications, knowing that premiums will vary, depending on your drugs.
If you’re eligible for veteran’s benefits, you may have special options. Check with your veteran’s clinic, hospital or contact your County Veterans Service Officer.
The donut hole
Comparing dollars to donuts is appropriate here. Most Medicare prescription drug plans have a coverage gap, also called the donut hole. This means there’s a temporary limit on what drugs your plan will cover.
The coverage gap begins after you spend a certain amount for covered drugs.
This year, $3,700 spent by you and your plan will put you in the donut hole. But guidelines now include giving prescribers a discount on brand-name drugs, once in the donut hole.
Monitor your monthly Explanation of Benefits statement from your drug plan, so you know when you’ve reached it. If you do, you’ll pay no more than 40 percent of the plan’s cost for covered brand-name prescription drugs.
People with Medicare who get extra help with paying for Medicare Part D coverage through a low-income subsidy aren’t impacted by the coverage gap.
For more than 25 years, Kari Logan has helped Minnesotans find the words to educate, promote and inspire readers across multiple industries, state government and non-profit organizations. She lives in Falcon Heights with her husband, Ian, and is the proud mother of a daughter who is following in her writing and public relations footsteps.