Medicare Part D Special Edition

Posted by radadmin
October 29, 2015

Well, it’s that time of year, again!  Open Enrollment for Medicare Prescription Drug Plans (Part D) starts October 15 and runs through December 7, 2015. This is the period when you can enroll in a plan for the first time or change your plan for the 2016 calendar year.

Current Medicare Part D enrollees will likely have received, or will soon receive, a renewal packet from their existing carrier. This packet will describe any changes to their plan for next year. This year, more than any, you should take the time to carefully review your drug plan options. Most plans are increasing their premiums, with many increases over 50%!

Read your renewal packet thoroughly and check for changes. These changes may include premium increases, a change in covered drugs, revised copays, coinsurance or deductibles, drug restrictions, network pharmacy changes and more. I encourage you to read this information carefully to understand how these changes will impact your out-of-pocket costs for 2016.

To review other plans, Medicare’s Plan Finder is an excellent tool that ranks plans based on your personal drug needs. The web page includes a step-by-step video to guide you through the process of evaluating and choosing a plan.

For those who would like our assistance in sorting out options and making recommendations, we will again be offering our fee-based consulting service. Visit our website to learn more about how we can help you with Medicare Part D. For a good Medicare Part D “primer” watch our Medicare Part D Video.


A Closer Look – Medicare Part D Plan Benchmark

Enrollment in Medicare’s Part D plan runs from October 15 through December 7 each year. Prior to the beginning of each Open Enrollment period, Medicare releases its standard benefit level parameters. Our diagram above describes the four standard benefits levels for the 2016 plan year. Definitions for each stage of the diagram are listed below. All Part D Plans must follow these parameters.

Enrollment in Part D is strictly voluntary. You are not required to enroll in a plan, but if you do enroll there are no restrictions on pre-existing conditions. This means you can’t be refused coverage based on your health, no matter how many medications you take or how expensive they are. You can also change plans every year to meet your changing prescription drug needs.

Here is a description of the four standard benefits levels, which make up Medicare’s Part D Plan.

  1. The Deductible Level can’t be higher than what Medicare allows each year. Plans are free to offer a lower deductible and many plans do. Some have no deductible at all. For 2016, Medicare’s deductible parameter has a maximum of $360.
  2. The Initial Coverage Level is the period after the deductible is met. During this period, the plan provides benefits in the form of coinsurance or copays until you and the plan have spent a specific amount as set by Medicare. For 2016, the Initial Coverage Level is $3,310 in total prescription drug costs.
  3. Once you and the plan have spent the initial coverage amount, you leave the Initial Coverage Level, you enter the Coverage Gap or “Donut Hole” until your yearly out-of-pocket drug cost reaches the 2016 set maximum of $4,850. Please note: Though very few plans provide benefits during the coverage gap, there are substantial discounts provided for brand name and generic medications by the plan and drug manufacturers. Please visit our website for the 2016 Benchmarks 
  4. The last level is Catastrophic Coverage, which starts after your out-of-pocket drug expenses reach the set Coverage Gap maximum of $4,850 and runs through the remainder of the 2016 calendar year. Please note: In this stage, your drug costs are reduced to very low coinsurance or copays until the end of the calendar year.

A Few Warnings:

  • There is no guarantee that the plan you choose will cover the medication prescribed to you during the plan year and, with few exceptions, can you change plans during a plan year for that year.
  • If you choose not to enroll in Part D plan but decide to enroll later, you may be penalized by not enrolling when you could have. Though the penalty isn’t much to start, it increases the longer you are without coverage and remains for as long as you have a drug plan.
  • In addition to the penalty, deciding to enroll later means waiting for the next annual open enrollment period (October 15 – December 7, 2016) to enroll for a January 1, 2017 start date. This means you could be without prescription coverage for many months and find you may suddenly need it.

These are just some of the many important rules and regulations about Medicare Part D. Visit OnlyHealthInsurance to learn more about Part D and how we assist our clients.


The Question Column

Q: How can I lower my out-of-pocket prescription drug costs?

A: If your share of costs spiked during a plan year, it may mean you have reached the Coverage Gap, or “Donut Hole”. This would be the result of reaching the Initial Coverage level threshold for total drug costs, which, in 2015 was $2,960 ($3,310 in 2016). You can learn more about the Coverage Gap by watching the Part D Video on our Website.

Here are a few suggestions to lowering your out-of-pocket costs:

  • Research the medications you are taking and discuss generic or lower-cost brand name alternatives with your doctor(s).
  • Obtain your plans formulary drug list and bring it to doctor visits. If drugs are prescribed, you can review those covered by your plan with your doctor and consider generic alternatives. Formulary lists have drugs in alpha order and by classification for easy look-up.
  • Consider a different pharmacy. The competitive model on which the Part D program was designed allows for price discounting by plan sponsors. Prices may vary significantly from one pharmacy to another.
  • Consider Mail Order services. Most Part D plans will offer a mail order option and provide a 90-day supply for a savings.
  • For spouses, enrolling in the same plan for convenience sake without performing personal assessments for both spouses is ill-advised. There are many factors that each person should take into account.
  • Choose the right plan. With over twenty plans available in 2016, each with different drug formularies and pricing, it’s a good idea to evaluate plans every year to stay current.

The Medicare Plan Finder tool allows you to evaluate your options by entering your medications, dosages, and quantities, as well as your preferred pharmacies. You can save your work using a plan ID and password date for future access. Medicare’s website also includes a link to a “how-to” video.

You can also contact us and we’ll do the research and prepare recommendations for you. To learn more about our Part D consulting services, please e-mail Phil Dougherty or contact us by phone at 415-898-0212.