Medicare Part D: What You Need to Know

Summary of a presentation to the Myositis Education and Support Program at HSS


Iris Chandler
LINCS (Linking Individuals in Need with Care & Services) Coordinator, Medicare Rights Center

Introduction

Ms. Chandler began by giving a brief history of the Medicare Rights Center (MRC): Founded in 1989, it is a nonprofit organization that helps older adults and people with disabilities obtain high-quality and affordable health care. It is the largest independent source of Medicare information and assistance in the United States.

What is the Medicare prescription drug benefit (Part D)?

While drugs that you get during overnight stays in a hospital or nursing home are covered by Medicare Part A, and other drugs that your doctor administers to you or that you get at a dialysis facility are covered by Medicare Part B, Part D of the Medicare plan outlines outpatient prescription drug coverage through your pharmacy or by mail order. It is available only through private insurance plans.

Details include the following:

  • It is not income-based. Anyone who receives Medicare is also eligible for this plan.
  • It is voluntary for most Medicare recipients.
  • The decision to enroll should be made in consideration with one’s current needs and coverage.

How does it work?

A private drug plan must be chosen that works with your Medicare coverage. There are two types of arrangements – Original Medicare and Medicare Advantage – that provide this coverage.

  • Original Medicare: This combines a private health plan’s stand-alone prescription drug plan (PDP) with Original Medicare coverage of doctor and hospital services. (If you keep Original Medicare, it is necessary to have a private, separate drug plan through a medical insurance company.)
  • Medicare Advantage: This is a comprehensive Medicare private health plan that (with some exceptions) provides all benefits (doctors, hospitals, drugs) under the same plan (MA – PDP). This arrangement may require that you pay an additional monthly premium for medical benefits. (This is the plan that is discussed in this presentation. PDP refers to “private drug plan.” This is the Managed Care portion of Medicare.)

Drug plans vary widely and there are many from which to choose (New York has 55). Each plan has different costs, covers different lists of drugs (formularies), and has its own network of pharmacies.

Note from the MRC website: If you are in an HMO or PPO you must receive all of your medical and drug coverage through that plan. If you are in a Private Fee-for-Service (PFFS) plan that does not offer drug coverage, or have a Medicare Medical Savings Account (MSA) or Medicare Cost Plan, you can enroll in a stand-alone prescription drug plan. Prior authorization is required. (Approval must be obtained from your plan before it will pay for some drugs.)

What is the cost of Medicare D?

Each plan has a different cost. Each plan’s coverage offers at least the basics of the general plan in general Medicare, but most plans under Medicare D look very different from Medicare’s basic plan. This can be discussed with your pharmacist, or you may contact a Medicare Rights Center counselor and discuss the benefits and drawbacks of the plan that is being considered.

Each plan charges different premiums, deductibles, and co-pays, and there are four different “tiers” of drugs:

  • Tier 1: Generics
  • Tier 2: Preferred Brand-Name
  • Tier 3: Non-Preferred Brand-Name
  • Tier 4 and above: “Specialty” Drugs

The national average premium for 2008 is $27.93, but if your income and assets are very low, you can get help with the costs of Medicare D through a federal program called Extra Help.

It is important to note that navigating these rate plans is very confusing, and the Medicare Right Center is there to help sort this out. Their telephone number is: 1-800-333-4114, or you may visit them online. Their direct link is: http://www.medicarerights.org/.

Are all drugs covered under Medicare D?

Each plan has its own list of drugs that are covered (formulary) and its own list of in-network pharmacies. Drugs in the formulary are covered only when purchased from in-network pharmacies.

Each plan must cover almost all drugs in the following classes:

  • Antidepressants
  • Anticonvulsants
  • Antipsychotics
  • Antiretrovirals (AIDS medications)
  • Immunosuppressants
  • Anticancer meds

Even if your drug(s) is in one of these classes, you should still check that it is included in your plan’s formulary list.

The following are drugs that are not covered by Medicare:

  • Drugs for anorexia, weight loss, or weight gain
  • Fertility
  • Cosmetic purposes or hair growth
  • Drugs for relief of cold symptoms (congestion or cough)
  • Erectile dysfunction
  • Prescription vitamins and minerals, except prenatal and fluoride
  • Over-the-counter drugs
  • Barbiturates (phenobarbital, valium, xanax)

There are limitations to this coverage. In general, brand-name drugs will cost more than generic ones. Also, many drugs that are covered may have restrictions:

  • Step-therapy: you must try certain medications before the plan will pay for the more expensive ones.
  • Prior authorization: approval must be obtained from your plan before it will pay for some drugs.
  • Quantity limits: there may be a certain amount of a medication that a plan will approve each month.

What if drugs you need are not covered in your plan?

It can be a very complicated process to request a transition period, but your pharmacist should be able to help with this, and your doctor can request an exception to obtain continued coverage or to change to a drug that is covered. If your plan denies your exception request, get professional help to appeal (Medicare Rights Center can help).

Is help available to pay for Medicare D?

Extra Help is a federal program that helps pay for some or most of the cost of Medicare drug coverage. Here are some points to consider:

  • You are eligible if your income is below $1,301 a month, $1,751 for couples and if your assets are below $11,990 or $23,970 for couples.
  • You would have low or no premiums and deductible.
  • Co-payments cannot exceed 15% of the cost of the drug.
  • The level of Extra Help for which you are eligible (full or partial) depends on your income and assets.

“Full” Extra Help:

  • As long as you choose a plan that has a premium below your state’s “benchmark” (the premium amount that Extra Help will pay in full in your state), there is no premium or deductible.
  • The co-pay amount depends on your income and if you have full Medicaid, but it can range from $1.05 to $5.60, at the maximum.
  • After the total (co-pay plus plan payout) cost reaches $5,726.25 (catastrophic coverage), you pay nothing.

“Partial” Extra Help:

  • There is a sliding-scale premium based on income.
  • Deductible is up to $56.
  • You pay the maximum of 15% for each drug; if the standard co-pay for the drug is lower, then you pay the lower amount.
  • After total of $5,7626.25 (catastrophic coverage), then co-pay ranges from $2.60 to $5.60.

The EPIC program:

  • Is a program for those 65 and over (NY State has just passed a law to include those 55 and over, but this has not yet gone into effect) that is for New York State residents only.
  • It is designed to help those with higher income levels and do not meet “Extra Help” requirements.
  • It will serve as a type of “discount” card for drugs.

How do I know if I should enroll?

It is an individual choice, but here are some tips to help make that choice:

  • Learn about the benefit offered, know your options, and understand the enrollment penalty (see below).
  • If you have coverage that is at least as good as Medicare’s basic benefit (“creditable”), then you can keep this. Whoever provides your coverage should be able to tell you if your coverage is creditable in writing; if you do not have this, you can call to ask for it. The following drug coverage is known to be creditable: Federal Employees Health Benefits (FEHB), TRICARE, Veteran’s Affairs Benefits, and some state pharmaceutical assistance programs.
  • If your drug costs are high, Medicare D will probably help you save money.
  • If your income is low, you can apply for Extra Help. Likewise, if you can get Extra Help, then Medicare D is a good idea.
  • If you have Medicare and Medicaid, you are generally required to get a drug plan through Medicare.
  • If you have no drug coverage and high drug costs, you should enroll in Medicare D.
  • If you have low or no drug costs, Medicare D could cost you more now but might save you money for the future.

If you choose not to enroll in Medicare D:

  • You can enroll late, without penalty, as long as you are not without creditable coverage for more than 63 days.
  • If you do not have creditable coverage, you may enroll later but will have to pay a premium penalty of one percent of the national average premium for every month you went without coverage. The national average premium for 2008 is $27.93.
  • If you do not enroll when you are first eligible, you will have to wait until the next enrollment period (which is from Nov. 15th to Dec. 31st each year).

What if I have other drug coverage?

Some points to consider when you have drug coverage other than Medicare D:

  • If it is “creditable,” (please see the above section entitled “How do I know if I should enroll?” for more info) you can keep it and not sign up for Medicare D.
  • Some employers or retiree plans require that you sign up for Medicare D coverage or risk losing the original benefit; you would need to ask the person who administers your plan about this.
  • You can switch from employer/retiree coverage to Medicare.
  • If you are enrolled in a pharmaceutical assistance program, many programs require enrollment in a Medicare D program.

When and how can I enroll in a Medicare D program?

When you first qualify for Medicare, you have an Initial Enrollment Period (IEP) to enroll in the Medicare drug benefit (Part D). The IEP is generally a seven month period that is broken down as follows:  The three months before you are eligible for Medicare, the month in which you are eligible, and the three months after you become eligible.

Medicare health and drug coverage can be chosen during this time. Once this seven month period has ended, you are limited as to when you can disenroll, join, or change private Medicare drug plans. These additional periods are outlined below.

In addition to your IEP, you can enroll during the following periods:

  • Annual coordinated election period: November 15th to December 31st each year
  • There are special enrollment periods for some situations, such as moving out of your plan’s service area.
  • If you have Medicaid or live in a nursing home, you may change your plan monthly.

Choose a drug plan that works with your Medicare health coverage. Here are some things to consider in selecting a plan:

How much will it cost for the year?

  • What is your monthly premium?
  • What is your deductible?
  • How much will you pay for each drug you need?
  • Is there a coverage gap, and when would you reach it?

Which drugs are covered by the plan?

  • Are most/all of your drugs covered?
  • Are there restrictions on these drugs?

Where can you buy drugs?

  • Does it work at your regular pharmacy?
  • Will it cover drugs if you are traveling?

Will it coordinate with other benefits?

Weighing your options: A Summary

  • If you don’t have creditable coverage, or a plan that covers your needs, then consider Medicare D.
  • If you have creditable coverage, you can keep it.
  • If your drug costs are high, Medicare D will probably save you money.
  • If your income is low, you can apply for Extra Help, sign up for a Medicare Savings Plan, or sign up for Medicaid.

Things to remember:

  • Find out as much as possible and know your options.
  • If you choose a Medicare D plan, make certain it is affordable, covers your needs, works at your pharmacy, and - if you already have coverage - that it works with your current coverage.
  • Double-check and go over all the items of a plan to make sure it’s right for you.
  • Record all information, and get it in writing!
  • If your plan does not cover a certain drug, you can often appeal.

Contact Information

For more information, contact:

Other resources:

Make sure you check all information with the plan before you enroll.



About the Myositis Education and Support Program at HSS

Learn more about the Myositis Education and Support Program, a free support and education group held monthly at Hospital for Special Surgery.


Summary prepared by Suzan Fischbein, LMSW, Myositis Support Group Coordinator

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