I am new to Medicare. Where can I get an overview of the Medicare Part D program?

Question: I am new to Medicare. Where can I get an overview of the Medicare Part D program?

Answer: In general, Medicare Part D prescription drug plans provide insurance coverage for your prescription drugs - just like other types of insurance.

Your Medicare prescription drug coverage can be provided by either:

1. a "stand-alone" Medicare Part D plan (PDP) - a PDP only provides drug coverage or
   
   
2. a Medicare Advantage plan that includes prescription coverage (MAPD).- a MAPD or a Medicare health plan will include Medicare Part A (in-patient and hospital coverage), Medicare Part B (out-patient and physician coverage), and Medicare Part D prescription drug coverage - all for one monthly premium.

You can also receive drug coverage from other sources such as your Employer Health Plan or the VA.

The key is to ensure that any Employer Health Plan provides "creditable" prescription drug coverage so that you avoid any Late-Enrollment Premium Penalties.  Late-Enrollment Penalties are assessed when you eligible for Medicare Part D coverage, but are without some form of creditable drug coverage for more than 63 days.

Medicare Part D plan coverage is divided into four phases.

(1) The Initial Deductible phase is where you pay 100% of your retail drug costs until you reach your deductible amount (for instance, $360 in 2016).  Many people will enroll in a Medicare prescription drug plan with a $0 deductible and effectively skip-over this first phase.  Also, some Medicare Part D plans will exclude less-expensive drugs (such as Tier 1 generics) from the plan's initial deductible, so coverage for some drugs begins even though you have not met the initial deductible.

(2) The Initial Coverage Phase is where you and your Medicare Part D plan will share in the cost of your medication purchases based on your plan's cost-sharing (such as a $30 co-payment or 25% co-insurance). When the retail value of your drug purchases exceeds your Initial Coverage Limit (ICL or Donut Hole entry point), you will leave your Initial Coverage Phase and enter the Coverage Gap or Donut Hole.

Please note that the Initial Coverage Limit is not measured by what you have spend on medications.  Instead, the ICL is the total retail value of your prescription drug purchases.  So the ICL is the amount that you pay for your prescriptions plus what your Medicare Part D plan is paying. As reference, the ICL in 2015 was $2,960 and $3,310 in 2016.

For example, if you fill a $100 prescription in 2016 and you pay a $30 co-pay (the Medicare Part D plan pays the other $70), the total $100 retail cost is credited toward your 2016 Initial Coverage Limit of $3,310.   In this case, after the $100 drug purchase, you have $3,210 remaining in drug purchases before entering the 2016 Donut Hole.

(3) The Coverage Gap or Donut Hole is the plan phase you enter once you exceed the Initial Coverage Limit and where you were originally responsible for 100% of your drug costs (so this was like a second deductible phase) - but now you receive a Donut Hole Discount.   For instance, in 2016, you will received a 55% discount on brand-name drugs and a 42% discount on generic drugs (you will pay 45% of your plan's negotiated retail cost for brand-name prescriptions and 58% of the retail cost for generics). The Donut Hole will be reduced to a fixed 25% co-insurance cost-sharing structure for both generics and brand-name drugs by 2020. You can read more about the current Donut Hole Discount here: https://q1medicare.com/q1group/MedicareAdvantagePartDQA/faq/What-kind-of-discount-can-we-expect-in-the-Doughnut-Hole-/470/129.html.

 

You can read more about the 2016 Donut Hole here: "https://q1medicare.com/q1group/MedicareAdvantagePartD/blog/The-2016-Donut-Hole-Discount-Increases-----and-what-this-means-to-you-/496/22.html"

(4) The Catastrophic Coverage Phase is the last phase of your Medicare Part D plan coverage and you enter once your total out-of-pocket drug costs (or TrOOP) exceed a certain point (over $4,700 in 2015 or over $4,850 in 2016).  During this phase you will exit the Donut Hole or Coverage Gap and will receive your medications at a low-fixed price, paying a maximum of 5% of the retail price for the remainder of the year.  TrOOP is what you have spent out of pocket for medications, but does not include your monthly premiums.  Also, although you receive a 55% discount on brand drugs in the Donut Hole (you pay 45% of retail), you will actually get 95% of the retail price credited toward your TrOOP.  So if you purchase a brand name drug in the Donut Hole with a retail cost of $100, you pay $45 (you get 55% discount in 2016) and you get $95 credited toward your TrOOP or Donut Hole exit point.  (Please note: this is a good thing because you will need to spend less to get out of the Donut Hole phase and enter the lower-costing Catastrophic Coverage phase.)

When can you enroll into a Medicare Part D plan?
If you are new to Medicare, you have an Initial Enrollment Period (IEP) that is a seven (7) month window beginning three (3) months before your month of eligibility, plus the month of eligibility, and ends three (3) months after your month of eligibility.  If you enroll in the three months prior to your month of Medicare eligibility, your effective date is the 1st day of your month of eligibility.  If you enroll into a Medicare Part D plan during your month of eligibility (such as when you turn 65) or during the three months following the month of Medicare eligibility, your Medicare Part D plan will be effective on the 1st day of the month following receipt of your enrollment.

If you are already eligible for Medicare, you can change Medicare plans during the Annual Enrollment Period (AEP).  The Annual Enrollment Period starts each year on October 15th and continues through December 7th with your Medicare Part D plan becoming effective on January 1st of the new plan year.

If you are outside of your IEP or AEP, then you will need to see if you can use a Special Enrollment Period (SEP). If you are entitled to an SEP, your Medicare Part D plan will become effective on 1st day of the month following the receipt of your enrollment.  See our Special Enrollment Period blog for more details and examples of SEPs.

Your monthly premium.
If you join a Medicare Part D prescription drug plan, you will pay a monthly premium ranging from only a few dollars up to over 100 dollars.  If you join a Medicare Advantage plan, you may have a $0 premium - and, depending on the MAPD, may actually get a portion of your Medicare Part B premium rebated back to you (a "dividend" plan).  Your monthly premiums will vary depending on the benefits of your selected Medicare Part D plan or Medicare Advantage plan and your resident state.  You can see a list of all Medicare Part D plans in your state using our Medicare Part D Plan Finder (PDP-Finder.com/FL).  You can see a list of all Medicare Advantage plan in your ZIP Code region using our Medicare Advantage Plan Finder (MA-Finder.com/90210).  You can also learn about the Medicare Part D plan premiums in your area by calling Medicare at 1-800-633-4227.

Financial assistance with prescription drug costs and Medicare Part A or Medicare Part B costs.
The Medicare Part D Extra Help program is available to help people with limited financial resources pay for their monthly premiums and drug costs.  The Extra Help or Low-Income Subsidy (LIS) program is based on a Medicare beneficiaries income and assets (or financial resources).  For more information, please contact your state Medicaid office.  Medicare Savings Programs are also available and, depending on your finances, may help pay Medicare Part A and/or Medicare Part B premiums, and maybe some Medicare Part B costs.

Medicare Part D and Medicare Advantage plans change each year.
Please note that Medicare Part D and Medicare Advantage plans change each year.  For example, if you are eligible for Medicare in 2016, the Medicare Part D plans that you review in 2014 or 2015, may not be available to you in 2016.  If you find that a Medicare plan is available next year, the plans can (and probably will) have different costs, coverage, and healthcare providers.  Bottom Line: Be prepared to review your Medicare plan options each year to ensue the most economic and complete coverage.

Medicare Part D and Medicare Advantage plans are offered in specific Service Areas, such as multiple-states, counties, ZIP Code areas, or parts of a highly-populated city such as New York or Los Angeles.  Our Q1Medicare.com tools are designed to provide people with an overview of all Medicare plan options in their area or region.

Choosing a Medicare Part D or Medicare Advantage plan.
There is no one "right" way to choose a Medicare Part D or Medicare Advantage plan.  In general, we simply advise people to choose a plan that most economically covers their current health and prescription needs.

But what if you do not need Medicare plan coverage?
Choosing a Medicare plan may be based on your risk tolerance.  For instance, people who are not taking any (or only a few) medications, can look up the lowest costing Medicare prescription drug plan (or Medicare Advantage plan that includes prescription coverage), check for medication coverage, and decide whether they:

1. simply enroll in a Medicare plan with the lowest priced monthly premium just to avoid any future late-enrollment premium penalty or
2. decide to pay a little more per month for a Medicare Part D plan with a $0 deductible and/or a larger formulary and/or a more familiar insurance company name - just in case their health were to change during the plan year or
3. will not enroll in any Medicare Part D plan this year, save the monthly premiums, and plan to pay the late-enrollment penalty if they ever choose to join a Medicare Part D or Medicare Advantage plan in the future.  (Please Note:  Yes, the monthly penalties can add up and here is a chart showing how your penalty costs can increase over time:  https://q1medicare.com/q1group/MedicareAdvantagePartD/Blog.php?blog=Your-2015-Late-Enrollment-Premium-Penalties-Will-Increase-by-2-&blog_id=367)

But what if taking financial risks is not an option to you?
People with more complex medication or healthcare needs must spend more time ensuring that their specific needs are covered by a Medicare Part D or Medicare Advantage plan.  For example, if you have a particular plan in mind (such as a local Medicare Advantage HMO that is provided by the large university or hospital system in your area), then you can review all of the coverage details we have online and then call the plan to learn whether their healthcare providers are included in the Medicare Advantage plan's network.

Need a place to begin?
To get started, you can begin on our homepage (Q1Medicare.com) and see the box that is entitled "Review 201X Medicare Part D Plans" with a listing of state abbreviations for stand-alone Medicare Part D prescription drug plans.  For example, if you live in the Commonwealth of Virginia, choose "VA", you will be taken to an overview of all Medicare Part D prescription drug plans in Virginia:  https://q1medicare.com/PartD-SearchPDPMedicarePartDPlanFinder.php?state=VA

On this page, you can see the name of the Medicare Part D plans, the monthly premium, the initial deductible, and the co-payment rate for the different drug tiers.

If you wish to see the medications covered by this Medicare Part D plan, you can click on the "Browse Formulary" link on the right side of the chart.  You can also click on the icons under the plan names for more plan details and plan contact information.

Here is an example link to the first page of the 2016 Humana Walmart Rx Plan formulary in Virginia:  https://q1medicare.com/PartD-BrowseMedicare-2016PlanFormulary.php?stateReg=07VA&formulary=00016345&letter=&contractId=S5884&planId=153  (IMPORTANT, Be sure to make sure you are looking at formulary or Medicare plan information for the current enrollment year).

From this 2016 example link, you can see the medication names and packaging information, drug tier number, tier description, cost-sharing and usage management restrictions (if any).  Using our Formulary Browser, you can always change the name of the Medicare Part D plan and state to browse other formularies.

You can also click on the icon after the drug name and you can see all of the Medicare Part D plans in Virginia that also cover this same medication and at what cost.  (This is our Drug Finder tool (found at Q1Rx.com) and you can change the prescription name to whatever you wish.)

If you are looking for a Medicare Advantage plan (with Medicare Part A, Medicare Part B, and possibly Medicare Part D coverage), you can start on the Q1Medicare homepage and choose the right-box entitled "Find a 20xx Medicare Advantage Plan".  You can then enter your Zip Code or choose the state and county to see the Medicare Advantage plans available in your chosen Service Area.  (Medicare Part D plans are available state-wide, Medicare Advantage plans are offered on a ZIP Code or county area or partial-county area.)

As an example, here are the Medicare Advantage plans available in Fairfax County, Virginia:
https://q1medicare.com/PartD-SearchMA-MedicarePartDPlanFinder.php?state=VA&countyCode=51059&showCounty=Fairfax

Again, you can see the basic coverage details of all these Medicare Advantage plans in the list, along with Medicare Part D prescription drug coverage details, if included on the plan (or MAPD).  The icon below the Medicare Advantage plan name that looks like a small stack of paper will show all of the coverage details for a specific Medicare Advantage plan.

If you have specific questions, you can always email us (team@q1group.com) or you can browse our FAQ section found here:
https://q1medicare.com/FAQ.php

We also have the CMS Medicare & You Handbook online, alone with our supplemental notes and information:
https://q1medicare.com/PartD-MedicareAndYouCMSGuideToMedicare.php

If you feel lost or overwhelmed along the way, you can always contact Medicare directly at 1-800-633-4227, select the prescription drug option, and then choose the option to speak with a Medicare representative or say "representative" during the menu options.

Once connected, you can explain your situation to a Medicare representative and ask them to help you find a Medicare Advantage plan or Medicare Part D prescription drug plan that most economically covers your health and medication needs - or you can ask specific questions about a particular Medicare plan or the Medicare Part D program in general.

If you find a suitable Medicare Advantage plan or Medicare Part D plan and are eligible to enroll into the plan, the Medicare representative can process your enrollment into your chosen Medicare plan directly over the telephone - and the process only takes a few minutes.  A Medicare representative is not compensated for a Medicare plan enrollment and provides you with an unbiased view of all available Medicare Part D plans or Medicare Advantage plans.