While Medicare does not directly provide coverage for prescription drugs obtained from a pharmacy or via mail order, it does establish a template for drug coverage offered by private insurance companies. Part D was created to give Medicare recipients the ability to get their medications at a reduced cost compared to paying retail prices.
Each Part D drug plan offered by an insurance company is approved by CMS to meet their standards set for prescription coverage. This doesn’t mean that all plans are the same though. Each plan offers a list of covered medications called a formulary and it’s important when evaluating your options to make sure your medications are on this list. Formularies are divided into multiple tiers of medications ranging from generic to name-brand to specialty and generally the lower the tier number, the cheaper the medication is to fill.
Part D plans are usually contracted with certain pharmacy networks and you may find significant savings by filling your prescriptions at a preferred network pharmacy. Some plans also offer a secondary standard network of pharmacies where you can get prescriptions filled at a higher cost than that of the preferred pharmacies.
Pharmacy networks and formularies can change from year to year so it’s important to evaluate these options in the Fall during the Annual Enrollment Period. It’s equally important to do this if your prescribed medications have changed at all during the current year as there may be significant savings available to you by choosing a new Part D plan.
Part D plans have 4 stages of coverage: Deductible, Initial Coverage, Coverage Gap (Donut Hole), Catastrophic Coverage.
Not all plans have a deductible, but if they do it can’t exceed the amount set as the standard by CMS for the current year ($435 in 2020). Some plans waive the deductible for medications at lower tier levels (like tier 1 or tier 2). After meeting your deductible, you move into the Initial Coverage stage where you will pay co-pays for your prescriptions. After you and your plan combined have spent a certain amount of money your medications, you move into the Coverage Gap stage where you will pay a flat 25% of the retail cost for each of your medications. Not everyone reaches the Coverage Gap stage, but it’s not uncommon if you take a few expensive name-brand medications. Once you meet a certain amount of money you move into the Catastrophic Coverage stage where your medications become more affordable. In this stage you co-pays drop to whichever is greater of 5% or $3.60 for generics and 5% or $8.95 for name-brand medications.
As your agent, I will help you evaluate all of your options to see which plan can save you the most money on your current medications and am happy to review with you annually to make sure you always are getting the best deal on your prescriptions.
By far, the biggest area I've seen people save money when discussing insurance with me is their Part D Prescription Drug plan. Choosing a plan that doesn't cover your medications can be costly mistake that could add up to thousands of dollars a year. Because not all plans cover all medications, it is important that we talk every year to make sure the plan you're on will still serve you well.
I can meet in-person, via the phone, or even via video-conference with my laptop and your internet-connected computer, smartphone or tablet. Simply fill out the form below and I'll be in touch shortly to schedule a time to review your medications, answer your questions, and help you find the Part D Prescription drug plan that can best meet your needs. Or if you prefer, you can call me directly at 309-696-7933.
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