Medicare Parts A and B (Original Medicare) will provide coverage for most of your healthcare needs. However, when it comes to coverage for you prescription medication, Original Medicare is lacking to say the least. That’s where Medicare Part D plans come into play.
Medicare Part D Plans - Understanding The Basics
Coverage for prescription drugs is offered through a Medicare Part D stand-alone plan or through a Medicare Advantage Plan (Part C). Medicare Part D Plans and Medicare Advantage Plans are run by insurance companies or other private companies whom Medicare has approved.
Even if you are not taking any medication when you enroll for Medicare, you should make a drug plan part of your Medicare enrollment. If you do not select a Medicare prescription coverage plan, and a physician prescribes medication for you, later on, Medicare will probably charge you a penalty for late enrollment.
Types Of Medicare Part D Plans
Each Medicare Part D stand-alone plan varies in premium costs, drug costs, and drugs covered. Drugs are listed and categorized into a tier structure. Drugs in higher tiers generally cost more than drugs in lower tiers. Coverage Rules May Apply:
- Prior authorization for certain prescriptions.
- Quantity limits for the amount of medication you can get at a time.
- Step therapy which means you must try lower cost drugs first.
- Your Medicare Part D may waive any of these coverage rules if you or your provider request an exception.
If a Medicare Part D drug plan makes any changes involving a drug you are taking, they must provide written notice to you of the change 60 days before the change becomes effective.
Vaccines not covered under Medicare Part B must be covered by Medicare Part D plans if they are necessary to prevent illnesses. Drugs received in a hospital setting such as an emergency department may be considered out-of-pocket costs. You can submit a claim for a refund to your Medicare Part D plan.
You will have to get approval from Medicare Part D if you get your drugs through an automatic refill delivery service. Some Medicare Part D plans require approval for every delivery and some only require approval once a year.
A Medicare Part D stand-alone plan adds drug coverage to traditional Medicare, as well as some other plans approved by Medicare, such as Medicare Cost Plans, Medicare Private-Pay-For-Fee-Service Plans, and Medicare Medical Savings Account Plans. These Medicare Part D options are available through insurance companies and other private companies.
Stand Alone Part D
A Medicare Part D Prescription Drug Plan (PDP) is a stand-alone plan. A Medicare Part D stand-alone plan only covers prescription drugs. There is no other health care coverage in a stand-alone Medicare Part D Prescription Drug Plan (PDP).
Medicare Advantage Drug Coverage
A Medicare Advantage Plan with drug coverage (MAPD) includes both prescription drug coverage and other health care coverage. Most Medicare Advantage plans cover prescription costs.
How Medicare Drug Coverage Works With Other Insurance
It’s important to remember that Medicare drug coverage is a supplemental part of your health coverage. These plans are designed specifically to work in conjunction with any other Medicare or health coverage that you may have. Here’s how Medicare drug coverage works with other insurance plans and programs.
Union or Employer Health Coverage
If you have drug coverage from an employer, they will notify you annually to let you know about the credibility of your drug coverage program.
COBRA
If you have a COBRA plan that includes creditable drug coverage, you will be able to join a Medicare plan during a special enrollment period for your prescriptions when your COBRA ends.
Medigap Policy With Prescription Drug Coverage
Prescription drug coverage cannot be sold with Medigap policies anymore. However, if you are a current subscriber to a Medigap policy with drug coverage, you can keep it. Your Medigap insurance plan will need to remove your drug coverage and adjust your premiums when you sign up with a prescription plan with Medicare.
Medicaid
Medicare will pay for your drugs when you join one of the Medicare Part D plans. If you do not join a drug plan, Medicare enrolls you to make sure they cover you. You can change your Medicare drug plan at any time. Most Medicaid recipients pay a little for their covered drugs.
Those who reside at a nursing home receive full Medicaid coverage, and there is no charge. People who live in an assisted living, or an adult living facility, or in a residential home will pay a minimum copayment for prescriptions.
Supplemental Security Income Benefits
If you receive SSI benefits from Medicaid that pays your Medicare premiums, you must join a Medicare plan to pay for your prescriptions. You are automatically eligible to get Extra Help to pay for your prescription costs. To assure that medications are covered, Medicare enrolls a person in one of the Medicare Part D plans if they do not enroll themselves.
State Pharmaceutical Assistance Program
Each state has its own State Pharmaceutical Assistance Program (SPAP) that coordinates with Medicare Part D plans. Extra coverage is offered by some states, and some have a different program that helps pay medical costs.
Long-Term Care Facility
The pharmacies in long-term care facilities contract with Medicare Part D plans. If you enter, live at, or leave a long-term care facility, you will have an opportunity to select or change your Medicare drug plan.
HUD Housing Assistance
Medicare Part D plans are an option for you if you get HUD housing assistance. If you are eligible for Extra Help you will not lose your housing assistance. They may, however, adjust the amount of your housing assistance according to the costs of your prescriptions.
Food Stamps
You can enroll in a Medicare Part D Plan if you get food stamps. Your food stamp benefits can decrease if you are eligible for Extra Help with drug costs. You could lose your food stamp benefits if you are near the eligibility cutoff amount.
Health Insurance Marketplace
Private insurers, including Marketplace and shop plans, who offer drug coverage, are required every year to determine if their drug coverage is credible and provide that information to you in writing. The following insurance types are considered credible. In most cases, you can keep your current coverage if you have one of these types of insurance.
- Federal Employee Health Benefits Program
- Veterans' Benefits
- TRICARE (Military Health Benefits)
- Indian Health Services
