Medicare Prescription Drug (Part D) Plans

What is Medicare Part D?

Medicare Part D is a prescription drug coverage that was enacted by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. It is a federal-state partnership that helps seniors and people with disabilities purchase prescription drugs from private plans. 

How does Medicare Part D work?

Medicare Part D is separate from Traditional Medicare, which is a federal social insurance program for people over the age of 65 or people that can qualify because of a disability. Medicare Part D is a private plan run by private insurance companies. Medicare pays the insurance company directly for each prescription drug purchased. The program is also known as the Medicare Prescription Drug Benefit, or simply Medicare Prescription Drug Program. There are four important phases that you have to remember for Part D coverages:

• Annual Deductible – Once you have met your deductible for a Part D drug plans, you can have a discounted price on your medications. After that, you initial coverage bgins.
• Initial Coverage – Your plan will help pay for your covered prescription drugs, with some of the cost paid by your plan and a copayment or coinsurance. The length of time you are initially covered depends on how much drug costs you have accumulated and your plan’s benefit structure. For most plans in 2022, the initial coverage period ends after you have accrued $4,430 in total drug costs.
• The Coverage Gap – When your drug costs reach a certain amount, you enter the coverage gap, also called “the donut hole.” When you enter the coverage gap you will be responsible for only 25% of the cost of your drugs. In the past, you were responsible for a higher percentage of the cost of your drugs. Although the donut hole has diminished, it may still be worth noting that there can be a difference in cost between the initial coverage period and when you fall into the donut hole. For example, if a drug’s total price is $100 and you pay your plan’s $20 co-pay during the initial coverage period, you will only be responsible for paying $25 (25% of $100) during the coverage gap.
• Catastrophic Coverage – If you spend past the coverage gap…you plan will begin to pay 95% of the costs of your formulary medications for the remaining of the year.

How To Enroll in a Prescription Drug Plan?

There are 2 ways to enroll in a Medicare prescription drug plan.

1. You will need to visit the Medicare website and complete an application. You will need to provide your full name, Social Security number, date of birth, Medicare number (MBI), and other information requested on the application. You will also need to answer questions about whether you have any health conditions that might require you to take certain medications. After you have completed the application, you will be given a decision letter or a prescription drug card which you will need to bring to your pharmacy when you get your prescriptions.

2. You can just ask your insurance agent or us (Espino Insurance Group) and we’ll be able to guide you which is the best part d plan for you.

What are the Insulin savings through the Part D Senior Savings Model?

If you’re looking for a way to find a cheaper insulin coverage, joining a Medicare Part D drug plan or Medicare Advantage with Prescription Drug Plan may be the way to go. These plans offer a variety of coverage options that include multiple types of insulin at a maximum copayment of $35 per month. This limit does not apply during the catastrophic coverage phase of Medicare drug coverage.

Which medications were exluded in the Medicare Part D formulary?

The Medicare Part D formulary is the list of medications that are covered by the Medicare Part D prescription drug program. This list is updated annually and is made available to beneficiaries and pharmacies six months in advance of the coverage start date for each year. The medications that are excluded from the formulary are those that have been found to be unsafe or ineffective.

There are certain kinds of drugs that can be very helpful for treating a variety of medical conditions, but which are not covered by Medicare. This includes drugs used to treat anorexia, weight loss, or weight gain, as well as fertility drugs and any drug used for cosmetic purposes or hair growth. Also, certain over-the-counter (drugs you can buy at the store) and prescription medications (such as erectile dysfunction medications) are not covered by Medicare.

How much does Medicare Part D cost?

Most stand-alone Part D plans in 2022 (60% of PDPs) will offer enhanced benefits, which can include a lower (or no) deductible, reduced cost sharing, or a higher initial coverage limit than under the basic benefit design. The average monthly premium for enhanced benefit PDPs is $51, which is 44% higher than the monthly premium for PDPs offering the basic benefit ($35). For the subset of enhanced PDPs that participate in the $35 copay insulin model, the average monthly premium ($63) is nearly twice as high as the monthly premium for PDPs that are not participating in the model ($34). In 2022, 82% of Part D plans will charge a deductible, including 71% charging the standard (maximum) amount of $480. Across all PDPs, the average deductible in 2022 will be $384. The average monthly premium for prescription drug plans that charge no deductible is $90, nearly three times the monthly premium for PPDPs that charge the standard deductible ($33) and twice as much as the monthly premiums for prescription drug plans charging a partial deductable ($45).

When are you eligible for a Medicare Part D plan?

You are eligible for a Medicare prescription drug plan when you have Original Medicare. Normally when you turn 65 years old. You don’t need to have any health problems to be eligible, and you can enroll 3 months before you turn 65. You will also be eligible if you have a disability or end-stage renal disease (ESRD), a condition in which your kidneys no longer function properly. If you have ESRD, you will need to have a kidney transplant before you can be covered by a Medicare Part D plan.

How does the Medicare Part D tiered formulary work?

The program has three tiers, each with its own formulary. The tier that a drug falls into is based on how much it costs and how important the drug is to the health of the Medicare beneficiary. There are 5 tiers:

The first tier is for drugs that are considered generic.

The second tier are for drugs that are higher priced generic medications.

The third tier is for drugs that are not considered brand name medications. A popular diabetic brand name drug is like Januvia or Janument.

The fourth tier are for non-preferred drugs. These drugs are also brand name drugs and have a higher costs than the brand name medications on tier 3.

The fifth tier are for specialty medications. These are the most expensive drugs and are usually treated for something like cancer, multiple sclerosis, etc. 

Are all Medicare Part D plans the same?

Medicare Part D plans are not all the same. Each type of Medicare Part D plan has different benefits and premiums.

What is the Medicare Part D Penalty? 

The Medicare Part D late enrollment penalty is a fee that is assessed when you sign up for or renew your Medicare prescription drug coverage after the deadline. The penalty is based on how late you are in enrolling or renewing. The penalty is 0.95% of the premium you paid for the month you missed the enrollment or renewal deadline. The penalty may be waived if you can show that you had a good reason for not enrolling or renewing on time. The penalty is also in addition to the cost of coverage, which may be more expensive than the penalty.

What is Medicare Part D Extra Help?

Extra Help is a federal program that helps pay for your Medicare drug plan, even if you don’t have Medicare. It’s also known as the Part D Low-Income Subsidy (LIS). This means that if your income is low enough, you qualify for a subsidy to help cover some of the costs of your drugs. You may not know about Extra Help, but it could save you a lot of money on your prescriptions.

Extra Help Eligibility

If your income is up to $1,719 in 2022, and your assets are below specified limits, you may be eligible for Extra Help. These limits include a $20 income disregard that the Social Security Administration (SSA) automatically subtracts from your monthly unearned income (e.g., retirement income).

Even if your income or assets are above the eligibility limits, you could still qualify for Extra Help because certain types of income and assets may not be counted, in addition to the $20 mentioned above.

If you are enrolled in Medicaid, Supplemental Security Income (SSI), or a Medicare Savings Program (MSP), you automatically qualify for Extra Help regardless of whether you meet Extra Help’s eligibility requirements. You should receive a purple-colored notice from the Centers for Medicare & Medicaid Services (CMS) informing you that you do not need to apply for Extra Help.

In conclusion, if you are not sure whether you are eligible for Extra Help, you should contact the Social Security Administration (SSA) at 1-800-772-1213 or visit their website at www.socialsecurity.gov/prescription-drugs/extra-help.

Or you can Espino Insurance Group so we can guide you to saving money on your Medicare drug plans.