If you are in need of Medicare Part D prescription drug coverage, we can help. We are an independent insurance agency specializing in senior health plans and we represent all prescription drug carriers direct to our clients.
Navigating Medicare insurance plans can be difficult. If you make a mistake, you can face monetary penalties and enrollment delays. We can help you shop for and enroll in the Medicare drug coverage that best fits your needs.
It is important to know that Part D rx plans compliment – and are in addition to government run Medicare Parts A and B. These are drug plans offered by private insurance companies like Aetna, Anthem Blue Cross and Blue Shield, Coventry, Envision Rx, Humana, SilverScript, United Healthcare (AARP) and several others.
In order to enroll in a Part D plan, you must also be enrolled in Medicare Part A and/or Medicare Part B. Typically, drug coverage is purchased during open enrollment at age 65 or when your Medicare Part B becomes active. You must also be aware that the supplemental coverage you choose can affect your Medicare Part D enrollment options.
Many Medicare Advantage plans will already include Part D drug coverage. There are no Medicare supplement policies sold today (by rule) that include rx coverage, however. Enrolling in one plan can void the other. For instance, if you enroll in a Part D drug plan, then also enroll in most Advantage plans, your Part D coverage will be canceled by Medicare. It’s important to know how one affects the other.
Stand alone Medicare Part D plans can be changed every year during the Annual Election Period (AEP). This window begins on October 15th and ends on December 7th each year. Enrollment in a new rx plan is guaranteed so long as you are Medicare eligible. There are no medical underwriting requirements for drug plans. You cannot be turned down for poor health or utilization.
There are four stages to most Part D plans: The Deductible Phase, Initial Coverage Phase, Coverage Gap (aka Donut Hole) and finally the Catastrophic Phase. Not all plans have a Deductible Phase, and those that do, don’t always apply it to all prescriptions. In many cases, Tier I and II generic drugs are covered without the insured needing to meet the deductible. In 2018, the maximum deductible is $405, but it can be less or even $0.
After the deductible is the Initial Coverage Phase. During this window, the insurance company pays more and you pay less for your prescriptions – 75% to 25% is a good rule of thumb. This occurs until both you can your plan have spent $3,750 combined on covered drugs.
Next comes the dreaded Coverage Gap – more commonly referred to as the Donut Hole. Most people don’t reach it, but if you do, you pay the lion’s share of your prescription amounts. This window begins at $3,750 and ends once both you and your Part D plan have total costs of $5,000 in covered prescriptions on your formulary. Some insurance companies will still cover generics at a lower percentage in the Donut Hole. There is good news, however! In 2019, the Donut Hole will be closed as mandated by Congress. This will help many who are taking expensive medications.
The final stage is the Catastrophic Coverage Phase. It begins once you and your selected Part D drug plan have paid $5,000 combined on covered prescriptions. In the Catastrophic Phase, you’ll end up paying a very small copay (or coinsurance amount) should you reach it. Most copays are under $10 in this stage.
Again, its’ very important to know about the upcoming changes. The elimination of the Medicare Part D Donut Hole in 2019 will help thousands of consumers who rely on expensive medications to maintain their health. All plans will now have either two or three phases, but no longer four with the very expensive Coverage Gap in the middle.
By rule, all Medicare supplement coverages sold today do not include prescription drug coverage of any kind. This means if you purchase a traditional Medicare supplement (like Plan A, C, D, F, G, N, etc.) and you also want a Part D plan, then you must purchase the two separately. They can be offered from the same company, but they are always going to be separate policies.
If you choose not to enroll in a traditional supplement and remain only on Medicare Parts A and B, then you can always purchase a stand alone prescription drug plan (PDP) from the carrier that best suits your needs. There are no requirements to purchase a Medicare supplement in order to enroll in a Part D plan.
If you purchase an Advantage plan that includes credible drug coverage, then you do not need to (nor should you) purchase a stand-alone Part D plan. Some Advantage plans (like Private Fee for Service, Medicare Cost, and Medical Savings Accounts) do not include drug coverage and allow for purchase of a stand-alone drug coverage.
It is important to note that there are some Medicare Advantage plans (HMO and PPO plans for instance) that do not include credible drug coverage. And these plans do not allow you to purchase a stand alone drug plan based on the HMO or PPO plan design.
If you try to enroll in a stand alone PDP plan and your Advantage plan already offers coverage (or does not allow for it) you can be automatically disenrolled from your existing Advantage plan as this overlap will be found in the Medicare (CMS) system.
When considering a Medicare Advantage plan, it is important to know if it already includes credible drug coverage, allows for purchase of a stand alone PDP plan, or neither. It can be wise to work with a knowledgeable agent to make sure you know what your Advantage plan allows for.
Most PDP carriers offer two or three drug plans to choose from. One size does not fit all so it is important to base your decision not only on the plan premiums, but also on the rx’s you take, the purchasing method you prefer, deductibles, copays, and the plan rating.
In most areas, the least expensive Part D drug plan for 2018 (based on monthly premiums only) will be either the Humana Walmart, Envision Rx, or Aetna Rx Select. SilverScript Choice and ExpressScripts Saver plans also look to be competitive. Many of these Part D insurance policies will have up to a $405 one-time deductible in 2018. It’s important to note that most lower cost generic (usually Tier I & Tier II) prescriptions are not usually subject to this deductible.
If you would rather have a plan without a deductible, then the SilverScript Choice can be a good option. Some Rx costs might be slightly higher, so it’s important to factor in the prescriptions you take before enrolling. It’s an overall picture – not just the monthly premium you’ll want to consider. You should also consider your pharmacy and mail order options with each plan. Networks matter too.
The government website www.Medicare.gov offers a very comprehensive drug pricing tool called Plan Finder. Using this software, you and/or your agent can find a plan that offers the lowest out of pocket costs over the course of a year based on your known prescription needs.
It is a very good idea to shop your Part D plan each year during the AEP Medicare Open Enrollment window from Oct. 15th through Dec. 7th. Plan premiums, deductibles, copays and drug tiers can and usually will change each year. Pricing your drugs during the AEP window can help to avoid unpleasant surprises the following year.
Like all things insurance related, there can be penalties (both in terms of time and money) for non-compliance. The Medicare Part D program was designed to encourage enrollment and participation. If you do not enroll when you are supposed to, Medicare will enforce a premium penalty when you do.
The penalty is equal to 1% of the base plan premium for each month of non-compliance. If you enroll 12 months late, then your premiums will be 12% higher from the established base premium by Medicare – not the plan you choose. The Medicare Part D base premium cost for 2018 is $35.02 – it was $35.63 for 2017. Once received, the late enrollment penalty is for life. It does not go away.
And if you are enrolling late, then you can only enroll during AEP each year. This time period runs from October 15th through December 7th – with the coverage taking effect the first day of January the next year. Unless you have a Special Election Period, you will have to wait until AEP to enroll. This delay will also increase the penalty.
Special Election Periods are for those who are on Medicaid and other government assistance as well as those who might be moving in or out of a nursing home or plan service area. Otherwise, they are not offered for many other reasons.
It is important to note that some seniors already have creditable drug coverage and do not have to purchase a Part D plan in order to avoid penalties. Most military veterans have access to creditable coverage through the VA, certain union plans will offer creditable coverage, and those who are still working and covered under their large group employer plan usually have creditable prescription plans.
If you are not sure about when or if you need to enroll then talk with an agent, your HR director and/or a Medicare agent to make sure that you are following the guidelines that apply to you individually.
If enrollment issues, penalties and plan selection weren’t enough to worry about, high income earners must also be aware of IRMAA. This acronym stands for Income Related Medicare Adjustment Amount. It’s a fancy way of saying that Part D premiums are means adjusted.
To see where you and/or your spouse may fall, please see that chart below:
2018 Part D Income Related Medicare Adjustment Table
|Individual Filers||Joint Filers||2017 Adjustment||2018 Adjustment
|AGI Less Than Or Equal To $85,000||AGI Less Than Or Equal To $170,000||$0.00||$0.00
|AGI Greater Than $85,000 And Less Than Or Equal To $107,000||AGI Greater Than $170,000 And Less Than or Equal To $214,000||$13.30||$13.00
|AGI Greater Than $107,000 And Less Than Or Equal To $160,000||AGI Greater Than $214,000 And Less Than or Equal To $320,000||$34.20||$33.60
|AGI Greater Than $160,000 And Less Than Or Equal To $214,000||AGI Greater Than $320,000 And Less Than or Equal To $428,000||$55.20||$54.20
|AGI Greater Than $214,000||AGI Greater Than $428,000||$76.20||$74.80
Simply stated, individuals with adjusted gross income exceeding $85,000 and joint filers exceeding $170,000 will pay more for their Part D premiums regardless of the plan selected. The good news is that the income adjustment is actually going down for 2018 – not up! (IRMAA fees also apply to Medicare Part B premiums as well.)
We are an independent insurance agency representing all of our many carriers direct to consumer. We specialize in Supplements, Advantage Plans, and Part D coverage.
We are a one-stop shop for your Medicare insurance needs in 2018. Contact us today to discuss your options.