Babel Fish Translation Babel Fish logo Spanish Flag Russian Flag Korean Flag

Basic Facts on Medicare Part D: Everyone Should Know

Due to the multitude of drug plans available, it is imperative to scrutinize the details of each plan to determine which would be the best for each individual. Each drug plan covers different generic and brand-name drugs in each of the drug categories on the drug lists.

Drug plans can change their formulary with a 60-day notice to members. The notice must include the reason for the change, the names of similar drugs that are covered and how much the drugs will cost.

Education on the drug plans is imperative to selecting the one that will best serve an individual. Here are key points to remember.

Eligibility

First, you must determine if you are eligible for the Medicare Prescription Drug Coverage. If you have or are eligible for Medicare Part A or Part B, you are eligible for the new drug coverage. If you have Part A, you are still eligible for drug coverage even if you never had Part B, or had Part B and stopped it. There is no screening for pre-existing conditions or high drug costs. Plans must take everyone who is eligible and enrolls.

If you turn 65 soon, you may join Medicare Part A, Part B and a drug plan during the three months before your birthday. Also, you can join for up to three months after your birthday. So if you turn 65 by July 1, 2009, you could join a drug plan starting April 1, 2009.

To find out when your coverage starts, contact Medicare at 1-800-MEDICARE (1-800-633-4227) (TTY users or call 1-877-486-2048) or call the Baltimore County SHIP office at 410-887-2059.

Penalty to Join Later

No one has to join the Medicare Prescription Drug Coverage if they do not want to. But if you are eligible to enroll in this drug coverage and do not, there will be a penalty if you join later on, unless you are eligible for the extra help with costs. If you have other drug coverage now, you may not have to pay the penalty.

Current Drug Coverage

In some cases, an individual may be able to keep their current prescription drug plan and not join a Medicare drug plan. In other cases, things will change, and there will be new options. Each person will need to verify if his or her coverage will continue and if it is equal or better than Medicare.

Some plans pay for drugs in the coverage gap. Those plans may pay for generic drugs, and they may even pay for some brand drugs. Premiums on these plans may be higher. Remember to choose the plan with the lowest overall annual costs per year.

If you qualify for extra help with costs, you will not have a coverage gap. You will continue to pay reduced or no co-pays or co-insurance for each prescription. Depending on how much income you have, the co-pays or co-insurance may get even lower when the total drug costs reach $6,153.75.

Drugs Excluded from Coverage
Additionally, there are certain drugs that are excluded from the Medicare coverage including drugs for:

  • Anorexia
  • Weight loss or gain
  • Fertility
  • Cosmetic purposes
  • Hair growth
  • Relief of symptoms of colds
  • Prescription vitamins and minerals
  • Nonprescription drugs (over-the-counter)
  • Certain anti-anxiety and anti-seizure drugs.

Cost

If you do not qualify for extra help with costs, you will pay: monthly premiums, yearly deductible (if any) and co-pay or co-insurance for each prescription.

If you do qualify for extra help with costs because of limited income, you will pay: low or no monthly premiums, low or no yearly deductible, low or no co-pay or co-insurance for each prescription.

The overall annual cost includes premiums, deductibles, co-payments or co-insurance for each prescription, and any drug costs you may pay during the coverage gap. Medicare also cares about what they call your total drug costs. The total drug cost is what you pay for the prescriptions on a plan's drug list, plus what the plan pays for the prescriptions.

Choosing a Plan

It is important to make an educated choice as from the many plans with different costs. In most cases, you should look for plans that have the lowest overall annual cost each year. Think about how much the drugs prescribed cost in each plan.

The Formulary

Each Medicare Prescription Drug Plan will have a list of drugs it covers, called the plan's formulary. The formulary is important because it will tell three things:

  • the names of the drugs the plan covers
  • how much one would pay for each drug depends on what co-pay "tier" the drug is on, and
  • any limits or restrictions exist on a person's ability to get a drug.

The Formulary is a list of covered drugs by the plan - both generic and brand name drugs. Some drugs are on every plan's formulary because Medicare requires it. There are also other drugs that the Medicare law says the plans cannot cover. Medicare must review and approve each plan's drug list.

If a drug is not on a plan's list, you will either have to pay full price for the prescription or switch to a similar drug that the plan does cover. Or you can apply to the plan for an exception to see if the plan will cover the drug. But it's better to start out by picking a plan that has all or most of your drugs on the formulary.

Drug Plan Tiers

Each plan places the drugs it will pay for in different levels, called tiers. Each tier has its own co-pay or co-insurance amount. Your drugs may be included in all the plans in an area, but they could be listed on different tiers with different co-pay amounts. Most plans will have three to five tiers. Each plan will encourage a person to use the lowest cost drug to treat a medical condition.

Picking a plan

What types of plans will cover drugs? If you want Medicare Prescription Drug Coverage, you will need to choose the type of plan you would like. There are two types to choose from:

  • Medicare Prescription Drug Plans (PDPs) - Medicare Prescription Drug Plans are separate, free-standing insurance plans that will cover prescription drugs only. You would pick a Medicare Prescription Drug Plan if you have either original Medicare (Medicare Part A or B).
  • Medicare Advantage plans with Prescription Drug coverage (MA-PDs) - Medicare Advantage plans are health plans that cover both your medical care and prescription drugs. The major types of Medicare Advantage plans are as follows: Health Maintenance Organizations, or HMOs., Preferred Provider Organizations, or PPOs., Private Fee-for-Service plans, or PFFS, Special Needs Plans, or SNPs (which only serve certain groups of people with Medicare).

Deciding Factors

There are many plans to choose from in your area. The Web site, www.Medicare.gov, has the best tool to help you narrow your search.. Most people will pick a plan based on the following:

  • What drugs they use
  • What pharmacy they want to use
  • How much the plan costs,
  • Whether they want a plan that covers prescription drugs only (a stand-alone Medicare Prescription Drug Plan, or PDP) or a Medicare Advantage plan with both medical benefits and prescription drug coverage (a Medicare Advantage Prescription Drug plan, or MA-PD). 

Steps for Preparation

It is important to apply for extra help with costs early if you believe you qualify. If you make less than $15,600 ($21,000 for a couple), an application for extra help is recommended.

Record the names and costs of your current drugs. Talk with involved doctors about current and potential future needed drugs. Ask which ones are on the plans' drug lists, called formularies. If the drugs are not on the formularies, ask if the formulary has a similar drug and whether a switch to this drug would be harmful to your health. Most importantly, it is necessary to seek help from family, friends and professionals to make good choice. Call the Baltimore County SHIP office at 410-887-2059.

TIme to Join

For most people, the time to join (or switch) Medicare plans is November 15 to December 31 of each year. If you turn 65 this year, you can join during the three months before your birthday month, during your birthday month, and the three months after.

If you qualify for extra help with costs, you will be able to join a Medicare drug plan anytime. if you qualify for extra help with costs, you can enroll anytime

Starting Drug Coverage

 If you join this fall between November 15 and December 31, the drug coverage would start on January 1, 2009. Coverage will start the first day of the month after the month of joining. Example: If Bob joins on November 2, his drug coverage would start on December 1.

Two ways to join a Medicare Drug Plan are as follows:

  • Online - Join on the plan's web site after researching it or enroll on www.Medicare.gov using the Prescription Drug Plan Finder.
  • Telephone - Contact the company that offers the plan selected and either enroll over the phone or ask them to mail an application. Call Medicare at 1-800-MEDICARE or call the Baltimore County SHIP office at 410-887-2059.

Assistance from 'Authorized Representative'

Individuals are allowed to choose someone to help make decisions about their Medicare coverage. This person is called an authorized representative and is only authorized to help with Medicare--with joining a plan, quitting a plan, finding out information about the insurance and handling claims and payments.

An authorized representative cannot make decisions about medical care. These people are already authorized representatives: a guardian, a durable power of attorney for health care (where allowed by state law) and a durable power of attorney.

Authorized Representative Form

Individuals are able to sign a form to make someone else their authorized representative. The authorized representative form can be downloaded from the www.medicare.gov web site.

Does a person need to be an "authorized representative" to help a person join a plan? It depends on what the helper is needed to do and if the person needing assistance is with the helper.

If the representative is present with the person needing assistance, they do not need to be an authorized representative. The person wanting a change or more information about the Medicare can start the call and then tell the person who answers the phone that they would prefer someone there to ask the questions and get information.

If the helper is not with the person desiring assistance, they may need to be an authorized representative. The helper will need a signed a letter that says the plan can give information to them on the person's behalf. It is important to ask the company what type of verification they would require an authorized representative to have. Some companies may require an official form to make the helper an authorized representative.

Penalty Possible for Non-Enrollment When Eligible

The Medicare regulations for Part D stipulate a penalty for non-enrollment when eligible. Individuals may be eligible for the penalty if they:

  • Are considered eligible for Medicare Prescription Drug Coverage, and
  • Do not qualify for the Extra Help, and
  • Do not have drug coverage from another source that is as good as the Medicare drug coverage, and
  • Did not join a plan by May 15, 2006.

The key to coverage is understanding what "as good as" Medicare means. Current plans and programs that offer drug coverage are compared to the Medicare Prescription Drug Coverage. If they cover as much of the cost of a person's drugs as the basic Medicare drug benefit defined by the law, they are considered "as good as" what Medicare is offering or "creditable coverage." A person's employer, union or Medigap plan should annually inform them if the plan is creditable coverage, or as good as Medicare's drug coverage.

Subject to Penalty

For those that do not verify their coverage, they will be subject to the penalty. The penalty is an increase in premium - it is 1 percent of the average premium nationwide for each month an individual is without drug coverage that is as good as Medicare's drug coverage. This penalty is permanent and would be paid as long as Medicare Prescription Drug Coverage is in place.

For example, if a person were eligible to join a plan when the coverage started on May 15, 2006, and did not join until the open enrollment period the fall of 2008 (November 15 - December 31, 2008) the drug coverage would start on January 1, 2009.

However, if the person did not have other comparable drug coverage, they will have 31 months without comparable drug coverage (June - December 2006, plus all of 2007 and 2008). The penalty will, thus, be 31 percent of the average premium nationwide for 2008 ($25), added to the selected drug plan's monthly premium - a total of $32.75 per month. This additional amount will be added to the premium each month that the person is enrolled in the Medicare Prescription Drug Coverage.

Another demonstration why action is needed is the rate one would pay if they waited until November of 2009 to join - $40.04 penalty per month. The delay until November 2009 would be 43 months (June 2006 to January 1, 2010) without other comparable drug coverage, Therefore, the penalty will be 43 percent of the average premium nationwide for 2009 ($28), added to your monthly premium - a total of $40.04 per month. Here, again, this additional amount will be added to your premium for as long as you are enrolled in the Medicare Prescription Drug Coverage.

These two examples of penalties demonstrate the need to sign-up for a drug plan even if you currently have low or no drug expenses. It is recommended that a person register for the least expensive drug plan as soon as they are eligible to avoid the penalties should their drug needs and/or physical health change.

Special Enrollment Periods

Most people are allowed to switch plans once a year. Once you are in a drug plan, generally you will not be able to switch. You will be "locked into" your plan until the next open enrollment period. These periods run from November 15 to December 31 each year.

However, if you receive Extra Help with your Medicare prescription drug costs, you can switch plans as often as once a month. Other special circumstances when you can switch plans include the following:

  • Relocation from the area your current plan serves
  • Placement in or out of a nursing home
  • Plan changes and no longer serves your area.

To find other special situations where you might be able to qualify for a "Special Enrollment Period" when you might be able to join or switch plans, contact 1-800-MEDICARE.

Grievances, Exceptions and Appeals

Grievances, exceptions and appeals are ways which Medicare has set up for individuals to try to solve problems with any plan. There are specific ways to solve different kinds of problems. Here are some details, some possible problem areas and potential solutions.

Filing a Grievance

A grievance is a complaint about the customer service that a plan has provided or about how the plan operates. Anyone can file a grievance with his or her plan. Grievances are only about the customer service the plan gives like answering questions or providing the information needed. But issues relating to what drugs the plan will pay for are not customer service issues.

A grievance can be filed with a Part D plan anytime a complaint about the plan's customer service is found. Individuals have 60 days from the date of the problem with the plan's customer service to file a grievance by contacting the plan. Usually one can file a grievance by phone or in writing. But some plans may require a special form.

After the grievance is filed, the plan must inform the person what they will do about the grievance no later than 30 days after they receive it. But for certain types of complaints, the plan must respond sooner.

Asking for an exception

With an exception, the plan gives special permission to have a prescription drug covered that the plan would not normally cover. Exceptions are sometimes called "coverage determinations" and can be asked for if:

  • if a needed drug is not on the plan's drug list
  • if a needed drug has plan set limits on or has special rules about; or if a needed drug costs more than the individual can afford.

One important note is that one cannot ask their plan for an exception if the drug needed is not covered by law or if it is on what is called a "specialty tier" in terms of cost. The Part D plan may give a person an exception if they or their doctor can show that the drug is medically necessary and no other drug on the plan's list would work as well.

The individual needing the exception, their physician or a helper can request an exception. No matter who files, a doctor will need to tell the plan the medical reasons why a specific drug is needed and why no drug on the formulary will work as well. The plan will need to know what other drugs have been tried, how they worked, and how the drug requested is working. Without this information, the plan does not have to act on the request.

The process to get an exception moves quickly. If one is requested, the plan must make a decision within 72 hours. The decision can be made even faster - within 24 hours -- if a doctor believes that waiting 72 hours would cause serious harm to the person's health.

Next, if the plan approves an exception request, the person should be able to fill the prescription for this drug within 72 hours of when the plan approves the exception and get the drug under those terms for the rest of the calendar year. However, at the end of the calendar year, the individual will need to check with the plan to see if a new exception request for the following year is needed or a new drug plan will need to be researched for better coverage.

Appealing a Decision

An appeal is a way for an individual to challenge a plan's decision about the drug coverage. One can make an appeal if the plan says no when an exception is requested.

If a plan denies the exception, here are some circumstances that the individual can appeal: a drug needed is not on the plan's list of covered drugs, or formulary; or a drug needed has set limits on or has special rules about; or a drug needed costs more than one can afford.

There are five steps to the appeals process. Steps must be followed in order, but a person might not have to go through all five steps: re-determination, reconsideration, a hearing with an administrative law judge, review by the Medicare appeals council and review by a federal court. At anytime during the process, a favorable decision may be made.

For further details on the grievance, exception or appeal processes, contact your local SHIP office or go online to www.medicare.gov.