Medicare Part D

Medicare Part D

Created in 2006 with the passing of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)

Designed to offer prescription drug coverage to everyone enrolled in Medicare

There are 2 ways to receive coverage;

• Stand alone policy purchased through a private insurance company in conjunction with Original Medicare
• Purchased along side or with a Medicare Advantage Plan

Either way that is selected the plans are still labeled as “Medicare drug plans”

Covers;

Each plan has its own list of covered drugs (called a formulary). Many Medicare Part D plans place drugs into different “tiers” on their formularies. Drugs in each tier have a different cost. Currently there are 4 “tiers”, they are;

• Tier 1 Generic Drugs
• Tier 2 Some Brand Name Drugs and some Generic Drugs
• Tier 3 All Brand Name Drugs
• Tier 4 Drugs chosen by the Insurance Companies to be not subject to any of the rules & regulations set forth by Medicare.

Costs;

• Monthly premiums
  • Varies by plan from Private Ins. Company. If part of a Medicare Advantage Plan the monthly premium paid may include the amount for prescription drug coverage.
  • In 2012 the average expected premium is $30 a month which is also the base premium (base premium is what is used to calculate the late enrollment penalty)
  • Subject to income rules (the more income earned may mean higher premiums for coverage)
• Yearly deductibles
  • Set by Private Ins. Company
• Copayments or coinsurance
  • Set by Private Ins. Company

Eligibility;

•  Must have Medicare Part A and / or Part B
• Must live in the plan’s service area (can’t have a different state’s plan)
• If covered with an Advantage Plan must be covered for Parts A & B

 Note;

• Can NOT have more than one Plan at a time
• Those that live outside of the US & territories and those incarcerated are NOT eligible

 Enrollment;

•  When to Join
• When first eligible for Medicare
• Annual Enrollment Period; Oct 15 thru Dec 7 (Changes are effective Jan 1)
• Disenrollment Period – Jan 1 thru Feb 14 to leave an Advantage Plan & switch back to Original Medicare – may also join a Drug plan

• Special Enrollment Periods
  • Permanently move out of area
  • Lose other credible drug coverage
  • Enter or leave Long Term Care facility
  • Qualify for extra help / lose qualification for extra help

• 5 Star Plans
  • Can enroll one time only at any point per year in any plan that is ranked by CMS as a 5 star

• Late Enrollment Penalty; for those that decided to wait past enrollment period and who did NOT have credible coverage or reason
  • Multiply 1% on to base premium by the number of months NOT covered (in 2012 the base premium is $30) then add that amount to monthly premium.
  • If disagree on ruling must fill out reconsideration form & provide proof of coverage
  • Example of penalty – went without coverage for 7 months and the base premium is $30 a month then the total penalty amount will be 7% x 30 = $2.10 which will be added to the monthly premium payment for coverage

Extra Help;

For those with limited or little income will receive help

• Costs;
  • There will be no premiums, deductibles and may have little to no co-pays
• Qualifications
  • Medicaid – automatic
  • Receive Supplemental Security Income (SSI)
• Income & Resource Limits
  • Income
    • Below 150% of Federal Poverty Level
      • $1,361.25 per month per individual
      • $1,838.75 per month per married couple
  • Resources
    • Up to $12,640 for individual
    • Up to $25,260 for married couple

Comparing / Choosing Plans

• Medicare Plan Finder
  • www.medicare.gov
• Will need;
  • Current list of prescription drugs, doses, & strengths
  • Medicare card
  • Zip code

Selecting Plan & Enroll

• Once a plan is selected need to call the company that is offering the plan & ask how to join

Annual Notice of Change

• Notifies beneficiaries of any changes to plan for the upcoming year and will include
  • Summary of Benefits
  • Formulary
  • Changes
    • New premiums
    • Cost sharing (co-pays & coinsurance)
    • Usually arrives with Evidence of Coverage

Residents in a Long Term Care Facility

• Facilitates tend to contract with one pharmacy to supply prescription drugs for all residents
• Residents have continuous Special Enrollment Period can change plans ANYTIME
• No deductible of co-pay for those enrolled in a Medicare Part D plan or have full Medicaid benefits

For more information see www.medicare.gov