I’m glad I learned about the “doughnut hole.” It made my decision so much easier.
Prescription drug coverage, or part D, is one of the most complicated parts of Medicare. Two reasons for this are: there are different ways to get Part D and different levels of cost sharing involved.
The two ways to get Part D are: as a stand-alone plan with Original Medicare or built into a Medicare Advantage plan.
Let’s talk about stand-alone Part D plans first. They’re also called Prescription Drug Plans or PDPs. If you’re enrolled in Original Medicare, you must sign up for Part D separately. Part D is offered through private insurance companies, so you’ll need to look into this and decide what plan meets your needs. With a stand-alone Part D plan, you may have an annual deductible. Once you meet the deductible, the plan pays part of your costs. We’ll get more into that later.
Now let’s talk about Medicare Advantage plans. Most Medicare Advantage plans offer Part D coverage, but you must make sure before you enroll in that plan. One important difference between the two types of Part D is that most Medicare Advantage plans do not have a deductible to meet. You pay your copays for your prescriptions and your Medicare Advantage plan helps cover the rest.
However, just like with Original Medicare, cost sharing levels change during your coverage period.
Now, cost sharing. Let’s talk about standalone plans with Original Medicare. First you have to pay your deductible, if you have one. Once you meet this deductible, you will enter the second level, also known as “initial coverage.” At this point, you’ll pay 25% of the cost of a drug until you reach a certain dollar amount. When this dollar amount is met, you’ll enter the third level, called the “doughnut hole” or “coverage gap.” This is when you will be responsible for most of the full cost of your medications. But, you’ll receive a discount on both brand name and generic drugs. Finally, you’ll reach the fourth level after paying a certain amount out-of-pocket. This stage is also known as “catastrophic coverage”, where you are responsible for a much smaller amount of the drug’s cost.
With most Medicare Advantage plans with prescription drug coverage, you have no deductible to meet. During the “initial coverage,” you simply pay a copay for each prescription drug until you reach the next level. When you’re in the “doughnut” hole, you will pay more for your medicine. However, many Medicare Advantage plans have discounts and $0 copays on generic drugs to help with these costs. Finally, you enter the third level, where the plan pays most of the cost of the drug.
One thing that can help you with your decision when choosing a Part D plan is to look at the formulary of each plan you’re interested in. A formulary is the list of prescription drugs covered by a plan. This differs widely, so you want to be sure the medicine you need is covered.
These are just some of the main points of Medicare Part D. To learn more about your Medicare options, stop into an Independent Health Medicare Information Center and talk to a RedShirt. We’re here to help you.
For more information, call Independent Health at: (716) 635-4900 or 1-800-958-4405
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