Prescription Drugs Coverage
You have many options when it comes to obtaining prescription drug coverage so it’s important that wecome up with the right strategy.
Part D coverage is provided by private insurance companies and
therefore the drug formulary, pharmacy affiliation, deductible, drug tier level, co-pay, co-insurance will
vary from one company to the next.
These are the things we’ll discuss to get to the right plan.
You will want to enroll in a Prescription Drug Plan (PDP) when you are first eligible, whether that is at 65 or when you stop receiving employer benefits.
If you miss the Initial Enrollment Period, you will pay a 1% penalty for every month you could have had coverage but did not buy it.
The 1% is based of the national average Part D premium price, and you pay that for life!
After you are enrolled there is an Annual Election Period (AEP), that’s when you can change plans if you would like.
The AEP runs from October 15th to December 7th.
Here’s the deal, your Part D plan will change every year!
The premiums, deductibles, copays, coinsurance, pharmacy network, drug formulary will change.
In September you will receive your Part D Annual Notice of Change packet, it’s very important that you review the changes for the upcoming year carefully.
Or call SIBG, we’ll help you
review it B4 AEP and we can decide what to do.
Here are some of the basics and like everything on this site it’s meant to answer basic questions and provide basic information.
There is no substitute for us talking, understanding your needs and then tailoring a plan to meet those needs.
So, some basics:
There are two ways you can get prescription drug coverage.
1. A Stand-Alone PDP plan.
This would be plan you buy from a private company, you would pay a monthly premium and it would be in addition to your Original Medicare, Parts A and B, or in
addition to a Medicare Supplement Plan.
2. You can get PDP coverage through a Medicare Advantage (MA) plan.
We’ll explain MA plans later, but a MA plan will cover your Part A, Part B, Part D prescription drug needs along with
other coverage such as dental, vision, hearing.
Now you have probably heard about the dreaded Donut Hole, it’s nothing like it used to be, here are the stages.
After you have met your deductible the initial coverage starts, in 2021 CMS set the
dollar amount limit at $ 4,430.00.
This is where you and the plan share in the cost.
Coverage Gap (donut hole):
Member pays 25% for Generic and Brand name drugs until out of pocket
costs reach $ 7,050.
Once you hit the $ 7,050 stage you are out of the “donut hole” and pay a small
co-pay or co-insurance for drugs.
The amount you must pay before the PDP plan starts contributing.
The deductible amount
a PDP plan can charge will change from year to year, from provider to provider and from plan to plan, CMS puts a cap on the deductible, $485.00 in 2021.
One plan might offer three levels of prescription drug plans, with three different deductible amounts.
Like regular health insurance, typically the lower the deductible, the higher the premium.
If you need help with your prescription drug costs it’s available.
The Low-Income Subsidy (LIS) or Extra help is designed to help with making premium payments, deductible, co-pays, co-insurance.
Depending on your income and resources the amount of help you receive can vary, it’s based on the Federal Poverty Level (FPL) and your situation.
There is also a plan for people with moderate income, people who do not qualify for Extra Help but have a gross income under 38,000 a year, 52,000
for a couple.
It’s called SPDAP and it has no asset test.
We can help you with all of this planning and execution.
Ok if you made it down this down you deserve a joke
My doctor was struggling to write my
prescription when I said “Doctor that’s a rectal thermometer in your hand” He replied, “dammit! Some
A-hole’s got my pen! Hopefully you laughed, didn’t mean to offend anyone.
Initial Enrollment Period (IEP)
As you approach your 65th birthday and plan your kick a@$ party you also need to be making Medicare plans (if you’re retiring).
3 months before you turn 65, your birthday month, and 3 months after your turn 65 is the IEP time frame where you enroll in A and B.
The IEP is no joke, if you do not enroll in Part B during your IEP you will face a LEP and be SOL unless you have a SEP.
Late Enrollment Penalty (LEP) 10% increase for every 12 months you were eligible but didn’t enroll in Part B.
Special Enrollment Period (SEP) if you work past 65 and had employer coverage that ends, you have an 8-month SEP to enroll in B.
However, if you are working for an employer with under 20 employees you have to enroll in Part B during the IEP.
Did you make it this far down, thanks, there is a lot to learn when it comes to Medicare.
If you are like us, before we became insurance junkies, you might not have paid much attention to work benefits, HR gave you a couple of options, you reviewed it with your spouse and paid whatever the plan did not.