August 9, 2010
Medicare Part D
What is Medicare Part D?
Medicare Part D is the government's prescription drug benefit for Medicare enrollees created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Medicare enrollees may access Part D benefits by signing up for a Medicare-approved prescription drug plan offered by a private insurance company. An enrollee may also access these same benefits by signing up for a Medicare Advantage plan that includes prescription drug coverage alongside its medical services. In either scenario, the enrollee is required to pay the monthly premium charged by the plan and these premiums vary by insurance provider.
Each prescription drug plan has its own list of covered prescription drugs called a "formulary." Medicare requires all Part D prescription drug plans to cover at least two medications within each therapeutic category. A therapeutic category is a classification of drugs sharing the same purpose (e.g. antidepressant, antibiotic). Part D plans may include more than two drugs from each therapeutic category. Medicare specifically excludes drug coverage for medications treating fertility, hair growth, anorexia, and some other conditions. Over-the-counter items such as aspirin and vitamins are also not covered by prescription drug plans.
Whether you take popular drugs such as Lipitor, Zocor, Glucophage, or Norvasc, you should do your homework before enrolling in Medicare Part D plan. Since each plan can cover different drugs, it is essential to evaluate plans in your area to determine:
- If your drugs are covered
- What are the estimated out-of-pocket expenses you should expect to pay during the year for your drugs and plan premiums
- If there are any limitations placed on your drugs (e.g. monthly quantity limits)
PlanPrescriber provides a free Medicare Part D plan comparison tool that can answer the above questions for your personalized medication usage.
Medicare Part D Eligibility
Anyone enrolled in Medicare Part A is eligible to enroll in a Medicare prescription drug plan. Medicare Advantage plans with prescription drug coverage require you to also be enrolled in Medicare Part B as well as Part A before you are eligible to enroll. Part D plans do not review your medical history to determine if you can enroll in a plan. However, since the Part D coverage is voluntary, you have the responsibility to select a plan and enroll.
You may only join a Medicare Part D plan during an enrollment period for which you qualify.
Medicare Part D Enrollment
Enrolling in Medicare Part D is simple. A relatively short application must be completed. This application asks for your name, address, Medicare beneficiary number, and other information. PlanPrescriber can assist you by phone (800-404-6968) or through our Medicare plan comparison tool. This tool has online forms for some plans and contact forms for others so that a licensed agent can call you and assist you with the enrollment process.
Medicare Part D premiums for 2010
Premiums for Medicare Part D insurance not only vary by plan but may also vary by region. Moreover, each year a plan may change its premium. Given this situation, the most affordable plan for you last year may not be the best buy for you this year. By reviewing your plan options annually, you are in the best position to maximize your savings.
The government has a program to assist low-income individuals with deductible, premium, and co-pay expenses. The program is known as “Extra Help” or the “Low Income Subsidy” (LIS).
Deductibles and Other Costs
A standard Medicare approved prescription drug plan has a deductible period where you are responsible to pay 100% of the drug costs until the deductible amount is satisfied. In 2010, the deductible amount may not be higher than $310. After you spend an amount equal to the deductible, you will pay a co-payment (or in some cases a co-insurance fee representing a percentage of the drug’s full price) for a covered drug. Some prescription drug plans waive the deductible.
The most affordable Medicare Part D plan for you is not necessarily the plan with the lowest monthly premium. A Part D plan also involves deductibles, out-of-pocket expenses for drugs, and the 'donut hole.' PlanPrescriber highly recommends that you use our plan comparison tool to compare objectively your annual prescription drug coverage costs (i.e. premiums, deductibles, and out-of-pocket expenses) for the drugs you are currently taking. By evaluating all your medication-related spending, you will be in the best position to make an informed choice on what Medicare Part D plan is right for you.