Medicare Insurance Part D
Part D is Medicare regulated and approved prescription drug coverage offered by private insurance companies. Unless you have other creditable drug coverage, you should enroll in Part D when you first become eligible to avoid penalties. Part D was designed in part to help Medicare enrollees to lower their prescription drug costs and to protect against future costs.
It also provides access to medically necessary drugs via a Medicare-approved prescription drug plan. Keep in mind that a plan’s premium (monthly cost of the plan), drug formulary (list of covered medications), and copay amounts will vary by plan and by the insurance carrier.
Medicare Part D plans are required to follow the same structure designed by Medicare: Annual Deductible, Initial Coverage (prescription copays), the Coverage Gap or “donut-hole,” and Catastrophic Coverage.
Medicare Part D coverage can be obtained by purchasing a “stand-alone” drug plan or by purchasing a Medicare Advantage plan that includes Part D coverage as part of the plan. However, patients can’t be enrolled in both plans at the same time.
This insurance covers prescription drugs at a retail pharmacy with benefits that must be equal or better than defined by Medicare. This means a private insurer must meet a certain level of coverage. This includes deductibles, copays, and out of pockets limits associated with the plan.
Plans and costs will differ between insurers and no two plans are exactly the same. If you are considering purchasing Medicare Part D insurance, make sure you understand the differences. Some people never reach their initial deductible limits, while others exhaust their benefits.
The Four Phases of Part D
There are four stages or phases when paying for prescription drugs under Medicare Part D insurance plans. The one consistent aspect is all plans must meet a standard minimum benefit as determined by Medicare. That means every plan has to be approved by the agency.
Stage 1 – Deductible: This is the deductible period of Medicare Part D insurance coverage. In 2020, the most any plan can charge is $435, but some plans can go as low as no deductible at all. During this stage, you are responsible for the full cost of your medication until you meet your plans set deductible.
Stage 2 – Initial Coverage Period: Once stage 1 deductible is met, the coverage kicks in. Members pay a portion of the prescription cost (through co-pays or co-insurance) while the plan picks up the rest of the bill. Obviously, out of pocket costs are less during this stage, but there is a cap.
Stage 3 – Coverage Gap: When the monetary cap of stage 2 is met – the amount changes on a yearly basis – members may experience a coverage gap, popularly known as the “donut hole.” While it’s important to note that not all patients reach this stage, those that do can expect to pay more for their medication. However, if particularly expensive or specialty prescriptions are needed on a daily basis, there is some relief.
Stage 4 – Catastrophic Coverage: After a certain amount (which changes annually) of out-of-pocket expenses are met in stage 3, members may qualify for “catastrophic coverage.” This includes all money paid by the member during stages 2 and 3, but not the deductible of stage 1. At this point, members pay a maximum of five percent of their medications for the rest of the year.
All costs associated with Plan D insurance reset Jan. 1. That means all patients go back to stage 1. There are ways to keep costs down, however. Each plan has a formulary, a list of drugs that are covered by Medicare Part D insurance.
Though there are some drugs not covered by the plan – such as over-the-counter drugs or medication purchased outside of the U.S. – members do have a choice when it comes to which drugs they purchase. Each plan offers five tiers of medication, from tier one to tier five.
These tiers determine the pricing of different medications. Tier one drugs (such as generic drugs) are the cheapest while the most expensive drugs (brand name, specialty) are tier five. This gives enrollees some control over how much out-of-pocket expenses they payout.
Acquiring Medicare Part D Insurance
There are essentially two different ways to get Part D insurance. The first is to purchase a stand-alone drug plan. The other option is to have Part D included as part of a Medicare bundled with Medicare Advantage Plans. As stated above, members have to go with one or the other, not both.
Most members with Original Medicare (Part A and Part B) or with Supplemental/Medigap insurance will go with the stand-alone plan. Medicare Advantage plans will often include a Part D option.
In either case, plans must be available in your area (the county you live in) and no two plans are alike. You will be able to choose which plan works best for you. As with Part B, depending on income level, there is also an IRMAA assessed with Part D. However the reverse is true for beneficiaries with lower incomes who may qualify for extra assistance. If accepted, your prices will drop for copays, deductibles, etc.
Work With The Medicare Experts
VibrantUSA has been helping members with their Medicare questions since 2003. As an independent agency, we’re able to work with more than 30 different insurance carriers and compare more than 50 different plans. This allows us to choose the best Medicare plan and the best price for our clients.
With so many options, trying to choose the right Medicare insurance plans, whether it be Supplemental/Medigap with a Prescription Drug plan or an Advantage Plan, it can be stressful. No two situations are the same, so we take the time to learn about our clients, their concerns, and what they need to live their best life. Then we find the plan that helps them reach their health care goals.
If you have questions about which options will work best for you when special enrollment periods are available, or to find a new doctor if your current care professional leaves Medicare, contact VibrantUSA today. Our agents are true professionals in the Medicare insurance field. Let us take the pressure off your shoulders.
VibrantUSA is always helpful in answering many of my questions and put me at ease with any and all what ifs and whys I may ask of them.Client Since: 11/16/07
On top of the stress of relocating across the country at age 85, I had additional stress over the changing of insurances after so many years with my former insurance companies. At this age, changes do not come easily! VibrantUSA put me completely at ease and alleviated the stress… They really do care about their clients.Client Since: 12/2/08
We met with a Vibrant agent to discuss several issues and I want to commend her personal service, professionalism and expertise. My wife, Karen, and I thoroughly enjoyed the meeting and will be following up with her early next year as we set our health care insurance coverage during early retirement and then with appropriate Medicare coverage when the time comes.Client Since: 6/30/11
VibrantUSA has assembled a professional staff that listens carefully to each patient and then takes the time needed to be sure all questions are answered. This enables them to recommend coverage choices that really meet our patients’ needs. I trust them to do the right thing.M.D.ABFM, Family Care Network
We are very pleased with the business relationship we share with VibrantUSA. We have found Vibrant to be knowledgeable and helpful in navigating through the plethora of information regarding Medicare insurance related issues for our prospective new residents. On numerous occasions Vibrant has worked with our new resident (and their family members if necessary) to obtain proper insurance and physicians to meet their individual needs. We have also used Vibrant to help our own family members that live locally with their Medicare needs. We have been greatly satisfied with this service too.Executive Director, Emeritus at Fairhaven
I suddenly found myself without health insurance and in a panic… In one 20-minute phone call my fears were totally taken away by VibrantUSA. They talked to Medicare and Social Security and now I am completely covered with Medicare and prescription drug coverage. I would stand on top of the Space Needle and tell everyone about VibrantUSA.Client Since 6/10/09
For over a year, I tried to get a refund for a premium that was charged by a previous health provider in error. The provider ignored me. Then I went to VibrantUSA. With their guidance and assistance with phone calls and letters, I had my full refund within two weeks! Thank you VibrantUSA agents for the time and attention you spent on this matter.Client Since: 12/1/10
Initially we had fears about the Medicare processes, however VibrantUSA has taken the time we needed to relieve any fears and moved us to a comfortable place; which seems amazing given the complicated nature of Medicare.Clients Since: 12/20/07
The world of insurance is not easy to step into when you retire. You, at VibrantUSA, helped that first step be just a little easier, and when things don’t go smoothly with the insurance company, you work it out and make it work. Thank you.Clients Since: 1/1/2008
I moved my father from Montana to Spokane this past summer. It was in a crisis type of situation and quite stressful for me and my father. He had no drug coverage when he came and it was a huge hassle trying to figure out what to do! Once I got referred to VibrantUSA, however, it magically got easy! Not only did the representative help me find a perfect low-cost Advantage plan for my father, we were able to sign him up two months before open enrollment due to my father’s diabetes. The other insurance agents I had talked to didn’t even know we could do the early enrollment. This saved my father about $700.00! Three months later, my father was wrongly disenrolled from his Advantage plan, and, as you can imagine, I got dead ended on a lot of calls trying to resolve it. Once again, I called VibrantUSA and the representative that helped me was a cross between a Medicare genius and a pit bull. She knew exactly what to do and assisted us every step of the way until it was all resolved. I can’t say enough how amazing she was. She solved another big hassle worth hundreds of dollars and saved me from hours of calls and stress.Client Since: 10/1/2010