The Ins & Outs Of Medicare Prescription Drug Coverage
Posted Mar. 3, 2013, 9:09 am
Ron Pollack / Familes USA Executive Director
Since 2006, everyone with Medicare has had access to outpatient prescription drug coverage. As there are a lot of options and choices to be made, the path to that coverage can be complicated. In an effort to lessen some of those complications, here are answers to some of the most commonly asked questions about Medicare prescription drug coverage.
What are the different ways that Medicare offers prescription drug coverage?
Most people with Medicare get coverage through Medicare Part D. If you have Original Medicare (Parts A and B), you can add a Medicare Part D prescription drug plan for an additional premium. If you have a Medicare Advantage plan (sometimes called Medicare Part C), it probably includes Part D drug coverage, but you should check the plan to be sure. Some people have prescription drug coverage through a former employer. If this coverage is as good as or better than Part D coverage, you can keep it and you don’t need to sign up for Part D.
When can I join or change drug plans?
When you first become eligible for Medicare (usually around your 65th birthday), you can sign up for a Part D plan or a Medicare Advantage plan when you enroll in the rest of Medicare. Be sure to sign up within three months of your 65th birthday to avoid a penalty. Then, each year between Oct. 15 and Dec. 7, Medicare has an open enrollment period during which you can change Part D plans or switch in to or out of a Medicare Advantage plan.
What is a formulary?
A formulary is a list of medicines that your prescription drug plan covers. This list determines how much you will have to pay out of pocket for a prescription (your copayment). The amount varies depending on the category of drug: Generics are usually the cheapest, preferred brand-name drugs are more expensive, and non-preferred brand-name drugs are the most expensive. Some plans have four or more levels of copayments. Drugs that are not listed on the formulary are not covered at all. If drugs that you currently take aren’t on a plan’s formulary, or if they are very expensive, you should check out other plans.
What will I pay in premiums, deductibles, and copayments?
Premiums for prescription drug plans vary widely. In 2013, the national average is $30 per month, but there is a big range across geographic areas and for different Medicare Advantage and Part D plans. Deductibles, which refer to how much you must pay out of pocket every year before your plan will kick in, range from $0 to $325 in 2013. Copayments vary from plan to plan.
So what is the “doughnut hole?”
The doughnut hole – a feature of Medicare Part D since 2006 – is a big gap in drug coverage. Before the Affordable Care Act became law, when you reached an initial limit of total drug expenses ($2,970 in 2013), your drug coverage stopped – meaning you had to cover 100 percent of your drug costs – until you spent $3,764 out of your own pocket.
But there’s good news: Thanks to the Affordable Care Act, the doughnut hole is shrinking. In 2013, you will save 52.5 percent on brand-name drugs and 21 percent on generics at the pharmacy while you are in the doughnut hole. By 2020, the doughnut hole will be completely eliminated.
What if I can’t afford a Part D plan?
You might qualify for the Extra Help program that’s run through Social Security. You can find out more at the Social Security website, www.socialsecurity.gov/prescriptionhelp, or by calling 1.800.MEDICARE (633.4227). Some states also have their own programs to help people with high drug costs.
Where can I get help choosing a plan?
Selecting the right plan can be difficult. Try the Plan Finder at Medicare.gov, or call 1.800.MEDICARE (633.4227). For personalized assistance, ask for a referral to a counselor at your state’s SHIP program.