As a Medicare beneficiary in Vermont, you may be worrying about the costs of your current and future prescription medications, since Original Medicare (Part A and Part B) offers only limited prescription drug coverage. Under Part A and Part B, you might be covered for medications as part of your hospital inpatient treatment, or for medications administered to you in an outpatient setting – but typically not for prescriptions you take at home. Medicare Part D is government-contracted private insurance offering prescription drug coverage. Stand-alone Medicare Part D Prescription Drug Plan in Vermont may have different out-of-pocket costs, but most require payment of a monthly premium, annual deductible, and copayment or coinsurance.
Types of Medicare Part D prescription drug coverage in Vermont
Medicare Part D is the federal program designed to assist Medicare beneficiaries like you with prescription drug coverage, whether they live in Vermont or elsewhere. Private insurance companies contracted with Medicare offer prescription drug coverage to Medicare beneficiaries in Vermont, as in the other states.
Depending on where you live in Vermont, you may be able to choose among multiple Medicare Prescription Drug Plans. Two basic types of plans exist, described below.
One way you can receive Medicare Part D prescription drug coverage is to enroll in a Medicare Advantage Prescription Drug plan. A Medicare Advantage Prescription Drug plan combines health and prescription drug coverage into a single plan. Medicare Advantage Prescription Drug plans must offer at least the same level of coverage as Original Medicare Part A (hospital insurance) and Part B (medical insurance) provide (except for hospice care, which Part A covers). Many offer additional health benefits that Original Medicare does not —such as routine dental, vision, or hearing—and prescription drug coverage. To sign up for a Medicare Advantage Prescription Drug plan you must have Medicare Part A and Part B, and you must live in the plan’s service area. You must continue paying your Part B premium, along with any premium the Medicare Advantage plan may charge.
Another way you can receive Medicare Part D prescription drug coverage is to enroll in a stand-alone Medicare Part D Prescription Drug Plan. A Medicare Part D Prescription Drug Plan is designed to work alongside your Original Medicare coverage. If you have Medicare Part A and/or Part B, you can enroll in a Medicare Part D Prescription Drug Plan to receive prescription drug benefits to complement your health benefits. You can also add prescription drug coverage from a Medicare Part D Prescription Drug Plan if you are enrolled in a Medicare Advantage plan that does not provide prescription drug coverage. To choose this option, you must have Medicare Part A and/or Part B and live in the Medicare Part D Prescription Drug Plan’s service area. You cannot combine a Medicare Advantage Prescription Drug plan and a Part D Prescription Drug Plan.
How Medicare Part D Prescription Drug Plans work in Vermont
Each Medicare Part D Prescription Drug Plan in Vermont (or any other state) has a formulary. A formulary is a list of covered prescription drugs. The formulary may change at any time. If enrolled, you will receive notice from your plan when necessary. Typically a Medicare Part D Prescription Drug Plan groups the medications in its formulary into coverage categories called “tiers”. Each tier has a designated out-of-pocket cost (e.g., copayment or coinsurance amount) for the medications within the tier. The top tier includes the most expensive drugs, while the bottom tier lists the most affordable medications. If your doctor determines that a drug in a higher tier is medically necessary for your treatment instead of a similar drug in a lower tier, you or your doctor can ask your plan for a tiering exception so that you can receive the benefit of a lower copayment for a higher tier medication.
Most Medicare Part D Prescription Drug Plans in Vermont (and the other states) permit you to choose between brand-name drugs and generic drugs. The Food and Drug Administration (FDA) defines generic drugs as having the same active ingredients as brand-name drugs, at the same strength, dosage, and with the same method of administration. The FDA also requires that generics are tested to have the same results as brand-name drugs. Generic drugs often cost less than the brand-name versions, resulting in lower out-of-pocket expenses for Medicare beneficiaries. If a generic drug is not available, your Part D Prescription Drug Plan may allow you to substitute it with a similar generic drug used to treat the same condition instead of paying more for the brand-name prescription drug, so be sure to discuss all medication options with your doctor.
If you enroll in a stand-alone Medicare Part D Prescription Drug Plan, you continue to pay any applicable Part A and/or Part B premium(s) to remain enrolled in Medicare to retain your insurance coverage. You may also have a separate monthly premium you pay to the Medicare Part D Prescription Drug Plan in exchange for prescription drug benefits.
Generally, the prescription drug benefits of Medicare Advantage Prescription Drug plans share many of the characteristics described above.
When to enroll for Medicare Part D prescription drug coverage in Vermont
A good time to enroll in a plan that provides Medicare Part D prescription drug coverage may be during your seven-month Medicare Initial Enrollment Period, which begins three months before you turn 65, includes your birthday month, and ends three months after that month. If you’re enrolled in Medicare due to a disability, you can enroll in a plan during the time period of three months before until three months after your 25th month of receiving disability benefits.
You can enroll in a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan during the Annual Election Period for Medicare Advantage and Medicare prescription drug coverage, which runs from October 15 to December 7 each year. You may also change plans during this time. The effective date of your coverage is January 1st of the following year.
January 1 to March 31 each year is the Medicare Advantage Open Enrollment Period. If you disenroll from a Medicare Advantage or Medicare Advantage Prescription Drug plan at this time and return to Original Medicare, Part A and Part B, you can add a Medicare Part D Prescription Drug Plan up untilMarch 31. You also can switch Medicare Advantage plans during this period.
Timing is an important consideration. If you go without creditable drug coverage (that is, prescription drug insurance that is at least as good as Medicare Part D coverage) for 63 days or more after your Initial Enrollment Period ends, you may be liable for a late-enrollment penalty. The Medicare Part D 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.
There may be programs available to assist you if you are concerned that you cannot afford Medicare Part D prescription drug coverage. The Extra Help program is designed to assist Medicare beneficiaries pay their prescription drug costs. To be eligible a beneficiary must be enrolled in Medicare and must have a limited amount of income and personal assets.
Compare plans that offer Medicare prescription drug coverage in Vermont
Whether you are interested in signing-up for a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan, it’s to your benefit to shop and compare. Many plans offering Medicare Part D prescription coverage may be available in Vermont. You can narrow your search by entering your zip code in the plan finder on this page.
Also, plans offering Medicare Part D prescription coverage have different costs. Premiums, deductibles, copayments, and coinsurance are likely to vary. The plan formularies, that is the lists of covered prescription drugs, may vary. So it’s important to check to see if your medications are on the plan’s formulary and, if so, on which tier before you sign up for a plan.
If you are currently enrolled in a Medicare Part D Prescription Drug Plan, it’s a good idea to review your coverage on a yearly basis to be aware of any changes. Medicare Part D Prescription Drug Plans in Vermont and the rest of the United States are allowed to change their premiums, copayments, deductibles, and formularies each year. You will receive notice of these changes in the Annual Notice of Changes and Evidence of Coverage the plan mails you in the fall before the new benefits are effective the following January 1st. By reviewing this information, and comparing what other plans are available where you live, you can make sure you are continuing to receive your Medicare Part D prescription coverage from the plan that is offers the best value for your prescription drug coverage needs.
Please refer to the following pages for additional information about Medicare in Vermont: