Medicare offers prescription drug coverage for everyone with Medicare. This is called “Part D.” This coverage may help lower prescription drug costs and help protect against higher costs in the future. It can give you greater access to drugs that you can use to prevent complications of diseases and stay well. If you join a Medicare drug plan, you usually pay a monthly premium. Part D is optional. If you decide not to enroll in a Medicare drug plan when you are first eligible, you may pay a penalty (see pages 47–48) if you choose to join later. These plans are run by insurance companies and other private companies approved by Medicare.
Medicare offers help to employers and unions to help pay for prescription drug coverage. If you have employer or union drug coverage, see page 61. Joining a Part D plan could end the retiree health benefits you and your family get. Talk to your benefits administrator.
After you have joined the Medicare drug plan you want, the plan will mail you membership materials including a plan member card you use when you get your prescriptions filled. When you use the card, you will pay the copayment, coinsurance, and/or deductible, if any.
In Medicare Advantage Plans that include Medicare prescription drug
coverage (Part D), your health care and drug usage is coordinated, with
an emphasis on preventive care to keep you healthy.
Most drug plans charge a monthly premium that varies by plan. You pay this in addition to the Part B premium. Some drug plans charge no premium. If you have limited income and resources, you may get extra help to cover prescription drugs for little or no cost (see pages 64–65).
Your costs will vary depending on which drugs you use, which Medicare drug plan you choose, and whether you get extra help paying your Part D costs. Having a variety of plans to choose from gives you the chance to pick a plan that meets your unique needs. Choosing a plan that fits your situation allows you to get the coverage you want at the best price possible.
If you belong to a Medicare Advantage Plan (like an HMO or PPO) or a Medicare Cost Plan that offers Medicare prescription drug coverage, the monthly premium you pay to the plan includes an amount for prescription drug coverage. Some plans charge no premium.
You may be able to pick a plan with or without a monthly premium, deductible or coverage gap. To find the actual costs of the Medicare drug and health plans in your area, visit www.medicare.gov on the web. Select “Compare Medicare Prescription Drug Plans.” Or, call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.
Medicare drug plans may have a “coverage gap,” which is sometimes called the “donut hole.” A coverage gap means that after you and your plan have spent a certain amount of money for covered drugs (no more than $2,400), you have to pay out-of-pocket all costs for your drugs while you are in the “gap.” The most you have to pay out-of-pocket in the coverage gap is $3,051.25. This amount doesn’t include your plan’s monthly premium that you must continue to pay even while you are in the coverage gap. Once you’ve reached your plan’s out-of-pocket limit, you will have “catastrophic coverage.” This means that you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.15 or $5.35 for each prescription) for the rest of the calendar year.
Note: If you get extra help paying your drug costs, you won’t have a coverage gap. However, you will probably have to pay a small copayment or coinsurance amount.
The example below shows calendar year costs for covered drugs in a plan that meets Medicare’s standards in 2007:Mr. Jones joins the ABC Prescription Drug Plan. His coverage begins | |||
|---|---|---|---|
| 1. Yearly Deductible | 2. Copayment/ Coinsurance | 3. Coverage Gap | 4. Catastrophic Coverage |
| Mr. Jones pays the first $265 of his drug costs. | Mr. Jones pays a copayment or coinsurance amount, and his plan pays its share for each drug until his total drug costs (including his deductible) reach $2,400. | Mr. Jones pays everything until he has spent $3,850 out-of-pocket. (This includes his yearly deductible, coinsurance and copays, and $3,051.25 while in the coverage gap. This does not include the drug plan’s premium.) Even though he is paying everything, he gets a discount because he belongs to a Medicare drug plan. | Once Mr. Jones has spent $3,850 out-of pocket for the year, his coverage gap ends. He only pays a small coinsurance (like 5%) or a small copayment (like $2.15 or $5.35) for each prescription until the end of the year. |
Each Medicare drug plan is different. When you choose a Medicare drug plan for the first time, or switch to a different Medicare drug plan, you should compare the plans in your area and choose one that meets your cost and coverage needs. Get personalized help comparing Medicare prescription drug coverage:
■ Visit www.medicare.gov on the web. Select “Compare Medicare Prescription Drug Plans.”
■ Call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.
■ Call your State Health Insurance Assistance Program (see pages 92–95 for their telephone number). Have your Medicare card, a list of your drugs and their dosage, and the name of the pharmacy you use available.
■ Drug Coverage. Plans may have rules about what drugs are covered in different categories. Check to see if the plan covers your prescription drugs. Medicare drug plans will have a list of drugs covered by the plan (formulary) that must always meet Medicare’s requirements. Even if a drug is on the plan’s list, there may be special rules for filling the prescription. But, the list can change during the year because drug therapies change, and new drugs and medical knowledge become available. If you are affected by the change, your plan will notify you at least 60 days before the formulary changes. If there is a formulary change that affects a drug you take, in most cases, it will still be covered for you until the end of the year.
■ Cost. Check to see how much your prescription drugs would cost in each plan. If you currently have prescription drug coverage, compare your current costs to those of the Medicare drug plans you are considering. Monthly premiums, deductibles, and your share of the cost of your prescriptions (copayments and/or coinsurance) will vary with each plan and by each drug. If you have limited income or resources, you may qualify for “extra help” paying your drug plan costs (see pages 64–65).
■ Convenience. Medicare drug plans must contract with pharmacies in your area. Check with the plan to make sure the pharmacies in the plan are the ones you want to use. Some plans also allow you to get your prescriptions through the mail. If you spend part of the year in another state, see if the plan will cover you there.
Like other insurance, Medicare prescription drug coverage will be there when you need it to help you with drug costs. Even if you don’t take a lot of prescription drugs now, you still should consider joining a Medicare drug plan. As we age, most people need prescription drugs to stay healthy.
Are you:
If so, joining now means you will pay your lowest possible monthly premium. Every year (from November 15—December 31), you can switch to a different Medicare drug plan if your needs change. You can join a Medicare drug plan from three months before you turn 65 to three months after you turn 65 (called your Initial Enrollment Period). Generally, if you are disabled, you can join three months before and three months after your 25th month of disability. The plan will notify you when your coverage begins.
Important: If you don’t join a Medicare drug plan when you are first eligible to join (during your Initial Enrollment period), and there is a period of 63 continuous days or more during which you don’t have creditable prescription drug coverage, you may have to pay a late enrollment penalty when you do join. This amount changes every year. You will have to pay a penalty as long as you have Medicare prescription drug coverage.
If you currently have Medicare prescription drug coverage, you should review your coverage each year in the fall. You might want to switch Medicare drug plans if another plan better meets your needs. Generally, you can only switch plans from November 15—December 31 of each year (see pages 119 – 120). Coverage under the new plan will begin January 1 of the following year. It’s best to join a plan early in the month once you’ve made your decision. In certain cases, you may be able to change plans at other times (see page 119). If you are happy with your coverage, and your Medicare drug plan is still offered in your area, you don’t have to do anything for your coverage to continue.
Important: Only give personal information to doctors, other providers, and Medicare plans approved by Medicare, and to the people in your community who work with Medicare, like your State Health Insurance Assistance Program or Social Security (SSA). Call 1 800 633 - 4227 if you have questions. TTY users should call 1 877 486 - 2048.
If you have full coverage from your state Medicaid program and you are eligible for Medicare, Medicare will automatically enroll you in Medicare prescription drug coverage if you have not already chosen to do so. Medicare, not Medicaid, will provide your drug coverage and start paying for your prescription drugs. Medicaid will still cover other care that Medicare doesn’t cover. In some limited cases, Medicaid will add to Medicare drug coverage. You can switch to another Medicare drug plan each month.
Medicare pays for almost all of the cost of your covered drugs if you join a Medicare Prescription Drug Plan or a Medicare Advantage Plan with Medicare prescription drug coverage. In most cases, you will pay only a small amount out-of-pocket for each covered prescription. Your costs and the drugs that are covered vary by plan.
If you have Medicare and full coverage from Medicaid, and you live in certain institutions (like a nursing home), you will pay nothing for your covered prescription drugs.
If you don’t join a Medicare drug plan, Medicare will enroll you in one to make sure you get help paying for your prescription drug costs. You will get extensive drug coverage with little or no monthly premium. Generally, you pay only a small amount out-of-pocket for each covered prescription.
If you have other prescription drug coverage that’s at least as good as Medicare’s drug coverage (creditable prescription drug coverage), you can decline to keep the drug plan Medicare enrolls you in. If you don’t want to join this plan or any Medicare drug plan, call 1 800 633 - 4227, or call the plan Medicare enrolls you in.
Medicare offers employers and unions help paying for retiree drug coverage. Your (or your spouse’s) former or current employer or union must notify you about how your current coverage compares to Medicare’s (minimum) standard prescription drug coverage. Employers or unions may provide this information within a notice or in your benefits handbook. Keep this notice because it can help you decide whether to join a Medicare drug plan. It is your proof of creditable prescription drug coverage.
You won’t have to pay a penalty if your employer or union stops offering prescription drug coverage that was creditable coverage if you join a Medicare drug plan before going 63 days without coverage. If your employer or union drug coverage isn’t as good as Medicare prescription drug coverage (isn’t creditable prescription drug coverage), find out about your options from your benefits administrator. You will have several choices. If you aren’t notified, contact your benefits administrator.
Important: If you drop your employer or union coverage, you may not be able to get it back. You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health (doctor and hospital) coverage. If you drop your employer or union coverage for yourself, you may also have to drop coverage for your spouse and dependents. Contact your benefits administrator before you make any change to your drug coverage.
Once you choose a Medicare drug plan, you may be able to join
When you join a Medicare drug plan, you will have to provide your Medicare number. Look on your Medicare card for your number and the date your Part A or Part B coverage started.
You can take any of the following to the pharmacy as proof of membership in your Medicare drug plan:
If you enroll early in the month, there is a better chance you will have your membership materials when your coverage starts.
If you don’t have any of the items listed on the previous page, and your pharmacist can’t get your drug plan information any other way, you may have to pay out-ofpocket for your prescriptions. If you do, save the receipts and contact your plan to get reimbursed.
Important: Enroll early in the month. This gives the Medicare drug plan time to mail you important information like your membership card, acknowledgement letter, and welcome package before your coverage becomes effective. This way, even if you go to the pharmacy on your first day of coverage, you can get your prescriptions filled without delay.
There are many rules that can vary by plan. There are certain drugs that Medicare drug plans aren’t required to provide, such as benzodiazepines, barbiturates, and drugs for weight loss or gain. Some plans may choose to cover these drugs as an added benefit. In addition, drug plans aren’t allowed to cover drugs for erectile dysfunction or over-the-counter drugs for relief of colds.
Plans may also exclude certain drugs from coverage. Although your Medicare drug plan may not have a specific drug on their list of covered drugs (formulary), a drug that is safe and effective for the same purpose will be available for drugs that are covered by law. This may be in the form of a generic drug or therapeutic alternative (other brandname drug) that has the same benefit as a more expensive brand-name drug.
Plans have rules that need to be followed before certain prescriptions can be filled. For instance, some drugs may have more side effects or have restrictions on how long they can be taken. Some drugs cost more than others even though some less expensive drugs may work for you just as well.
All plans have an exceptions process. If your doctor believes you need a drug that isn’t on the plan’s list or the plan has rules that should be waived, he or she can request an exception. Not all exceptions are granted. See pages 131 – 136 for more information.
Important: Specific formulary information isn’t included in this handbook because each plan has its own formulary. Formularies can change. Contact your plan for its most current formulary.
All Medicare drug plans have negotiated to get lower prices for the drugs they cover. This means using drugs on your plan’s list will generally save you money. You will get lower prices for your prescriptions before you meet the deductible and when you are in the coverage gap (the period where you pay all of your costs). Using generic drugs can also save you money. For more information about other drugs you can use, go to www.medicare.gov on the web. Select “Compare Medicare Prescription Drug Plans.” Or, call 1 800 633 - 4227. TTY users should call 1 877 486 - 2048.
To be sure certain drugs are prescribed and used correctly and only when truly necessary, plans may have certain standard rules, including:
Example of step therapy for a patient who needs a drug for heart failure
Many Medicare drug plans place drugs into different “tiers.” Drugs in each tier have a different cost. Some plans may have more tiers and some may have fewer. Here is an example:
Tier 1
You pay: Lowest copay
What is covered: Most generic prescription drugs
Cost example*: $5.00
Speciality Tier
You pay: Higher pecentage
What is covered: Unique, very high-cost drugs
Cost example*: 25% - 33% of drug cost
* Note: These amounts aren’t actual costs. They are examples of copayments or coinsurance costs for a 30-day supply. Costs vary by plan and by drug.
Yes. According to the Food and Drug Administration (FDA), a generic drug is the same as a brand-name drug in dosage, safety, strength, quality, the way it works, the way it’s taken, and the way it should be used. Generic drugs use the same active ingredients as brand-name drugs and work the same way. So they have the same risks and benefits as the brand-name drugs.
Because there are usually many drug makers competing to make generic drugs, their costs are 70% lower (on average) than brand-name drug costs. Generic drug makers must prove to the FDA that their product performs in the same way as the brand-name drug. Today, almost half of all prescriptions are filled with generic drugs.
There are three ways to pay your Medicare drug plan premium:
Note: It will take two to three months for your premium deduction to begin after your coverage starts. When you first join a Medicare drug plan, your premiums for your first two or three months of coverage will be combined. For example, if you enroll in or switch Medicare drug plans in December for coverage that begins in January, your first premium payment will probably be due in February. It will include your premium for January and February.
You can switch to a Medicare drug plan in your new area as early as the first day of the month before you move. This way, your new coverage will begin the first day of the month in which you move. Or, you can join up to two months after you move. If your previous employer or union pays for your Medicare prescription drug coverage, contact your benefits administrator to learn about your options.
You can get current information on the Medicare drug plans in your new area at www.medicare.gov on the web. Select “Search Tools” at the top of the page. Then select “Compare Medicare Prescription Drug Plans.” Or, call 1 800 633 - 4227. TTY users should call 1 877 486 - 2048.
Important: If your income or resources are limited or change during the year, you may qualify for extra help paying your prescription drug costs. For more information about how you can apply for the extra help, see pages 105 – 115. You might want to consider lower cost prescription drug plans in your area if you aren’t taking many drugs.