October 6, 2016
Medicare Part D is a federal program providing Medicare beneficiaries prescription drug coverage from Medicare-approved private insurance companies. Original Medicare, Part A (hospital insurance) and Part B (medical insurance) doesn’t include prescription drug coverage. As a Medicare beneficiary living in Minnesota, one of the ways you can receive prescription drug coverage is by enrolling in a stand-alone Medicare Part D Prescription Drug Plan. Stand-alone Part D Prescription Drug Plans are offered through private insurance companies contracted with Medicare to provide Medicare beneficiaries throughout the United States with prescription drug benefits. Medicare Part D Prescription Drug Plan costs and availability may vary, depending on the insurance company, the benefit coverage offered, and where you live. You typically pay a monthly premium and may have an annual deductible, copayments and coinsurance when you’re enrolled in one of these plans.
Common Features of Medicare Part D Prescription Drug Plans
As a Medicare beneficiary in Minnesota, you receive health coverage if you’re enrolled in Original Medicare, Part A and Part B, or a Medicare Advantage plan, which might or might not include prescription drug coverage. If you need prescription drug coverage, you may want to enroll in a stand-alone Medicare Part D Prescription Drug Plan to get help paying your prescription drug expenses. Each Medicare Part D Prescription Drug Plan in Minnesota (as in the rest of the United States) has a different cost. Most Medicare Part D Prescription Drug Plans require you pay a monthly premium, annual deductible, and copayment or coinsurance. In addition, you must reside in the service area of the stand-alone Medicare Part D Prescription Drug Plan you select.
Each stand-alone Medicare Part D Prescription Drug Plan in Minnesota shares a characteristic of all Medicare plans that offer Part D prescription drug coverage throughout the United States: each has its own list of covered prescription drugs, called a formulary. The medications in the formulary may be grouped into different benefit categories called tiers, each with a different out-of-pocket cost to you. The lower tiers include the more affordable prescriptions drugs, while the higher tiers include more expensive medications. The formulary may change at any time. You will receive notice from your plan when necessary.
Another common characteristic of Medicare plans that offer prescription drug coverage is the inclusion of generic drugs in most formularies. Generally, stand-alone Medicare Part D Prescription Drug Plans in Minnesota let you choose between brand-name drugs and generic drugs. The Food and Drug Administration defines generic drugs as having the same active ingredients, at the same dosage, strength, and with the same way of administering them, and be proven to perform as effectively as brand-name drugs. The main difference for you is that generic drugs may cost less than their brand-name equivalents, which may result in lower out-of-pocket expenses.
Eligibility and Enrollment
To sign up for a stand-alone Medicare Part D Prescription Drug Plan, you need to meet eligibility requirements and be aware of the enrollment periods. You must have Medicare Part A and/or Part B in order to sign up for a stand-alone Medicare Part D Prescription Drug Plan and you must live within the Medicare Part D Prescription Drug Plan’s service area.
It’s a good idea to sign up for Medicare Part D in Minnesota during your Medicare Initial Enrollment Period, which for most people begins three months before you turn 65, includes your birth month, and ends three months after your month of birth. If you’re eligible for Medicare due to a disability, you can enroll in a Medicare Part D Prescription Drug Plan offered where you reside in Minnesota during the 7 month period that spans from three months before until three months after your 25th month of receiving disability benefits from the Social Security Administration or Railroad Retirement Board, and includes the 25th month.
If you miss your Initial Election Period, you can enroll in a stand-alone Medicare Part D Prescription Drug Plan during the Annual Election Period, which runs from October 15 to December 7 each year. You may also drop or switch stand-alone Medicare Part D Prescription Drug Plans during this same period.
Your prescription drug coverage premium may be influenced by several factors. For example, if you delay getting Medicare prescription drug coverage, you may have to pay a late-enrollment penalty if you later decide to get this coverage. This late-enrollment penalty may apply if you remain without creditable prescription drug coverage for 63 consecutive days or more after your Initial Enrollment Period ends. Creditable prescription drug coverage means coverage that is comparable to Medicare Part D benefits. This late-enrollment penalty is calculated using 1% of the national base beneficiary premium, and the number of full months you were eligible for Medicare Part D but didn’t enroll. This amount is then added to your Medicare Part D monthly premium. The national base beneficiary premium may increase each year, which means your late-enrollment penalty may also increase annually. On the other hand, if your income is sufficiently modest, you may be eligible to receive Extra Help with the cost of your Medicare prescription drug coverage.
There are two basic types of Medicare plans that offer prescription drug coverage in Minnesota, as elsewhere in the United States.
A Medicare Part D Prescription Drug Plan is a stand-alone plan that Medicare beneficiaries may enroll in to complement the health benefits they receive from Original Medicare, Part A and/or Part B or a Medicare Advantage plan that does not include prescription drug coverage. This additional coverage helps to cover costs for prescription drugs.
A Medicare Advantage Prescription Drug plan, on the other hand, combines health and prescription drug coverage into a single plan, offering at least the same coverage as Original Medicare (except hospice care, which continues to be covered under Part A). Like the stand-alone Medicare Part D Prescription Drug Plan, the Medicare Advantage Prescription Drug plan is offered by private insurance companies contracted with Medicare. Unlike the stand-alone Medicare Part D Prescription Drug Plan, the Medicare Advantage Prescription Drug plan is an alternative way to receive your Medicare Part A and B and D benefits. In other words, with a Medicare Advantage Prescription Drug plan, you can get all your Medicare benefits through a single plan.
The other important difference between these two types of Medicare plans offering prescription drug coverage is that you must have Medicare Part A and Part B to enroll in a Medicare Advantage Prescription Drug plan. To enroll in a stand-alone Medicare Part D Prescription Drug Plan, you must have Medicare Part A or Part B, or you may have both Part A and Part B.
If you enroll in a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan, you must continue to pay your Part A, if applicable and Part B premium, along with any applicable premium you may have for the Medicare plan providing prescription drug coverage.
You may have choices where you live in Minnesota between insurance companies that offer one or both types of Medicare plans providing prescription drug coverage. When comparing Medicare plans offering Part D prescription drug coverage in Minnesota, it’s always a good idea to take your medications into consideration. Check to see if your medications are on the plan’s formulary before you enroll. Understand what you will pay out-of-pocket for your medications by reviewing benefit plan features such as deductibles, copayments and coinsurance.
If you are currently enrolled in a Medicare plan offering Part D prescription drug coverage be sure to review carefully your plan’s Annual Notice of Change and Evidence of Coverage in the fall of every year to be aware of any changes to your coverage. Medicare Part D Prescription Drug Plans in Minnesota and throughout the United States can change their premiums, copayments, deductibles, and prescription drug formularies every year. Make sure you understand whether your current plan is best suited to your health and budget needs in the coming year or change, if possible, to one that can better serve your ongoing prescription drug coverage needs.
For more information about Medicare in Minnesota, see the following articles: