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Medicare Part D: Is it Right for You?

Obtaining assistance with health care can be a hassle, and medical bills can become overwhelming when you have many health needs. That's why the U.S. government has developed several programs such as Medicare to assist you if you are unable to buy health insurance or prescription drugs at regular rates.

 If you are a senior with a limited income, you will benefit tremendously from the Medicare program. You may also qualify if you are disabled or have special health care needs.

There are several different plans available under the Medicare program. Below we'll take a look at the Medicare Part D plan and how it can benefit you. Use this guide to determine if Medicare Part D is the right plan to meet your health care needs.

Overview of Medicare Part D

Medicare Part D was developed as a stand-alone insurance plan for prescription drugs. It is provided by private insurance companies that are approved by Medicare. Many people on Part D do have to pay a premium for this type of coverage; however, it is a very affordable alternative to normal health insurance prescription-only coverage.

Medicare Part D is divided into plans that cover different types of medications, but any medications that are necessary for medical treatment are covered. Upon signing on for Medicare Part D coverage, you can choose which drug plan will best suite your needs.

Deductible Costs to You as a Beneficiary

As a Medicare Part D beneficiary, you are required to pay certain costs when buying prescription drugs as set by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Under this structure, a standard drug benefit has been established by the MMA, which is defined in terms of a benefit structure instead of the actual cost of the medications covered. There is a deductible for the standard benefit, and then you must pay a percentage (25 % as of January 1, 2006) of the medication costs up to a specific coverage limit.

What is a Medicare Part D "Donut Hole?"

When you have paid your percentage of the costs and have reached the specific coverage limit under Medicare Part D, then a Coverage Gap remains, which must be paid in full up to a certain cap amount ($3600 as of January 1, 2006). This Coverage Gap is often called the "Donut Hole."

When your out-of-pocket expenses, including your initial coinsurance and deductible, have reached the cap amount, then catastrophic coverage takes over. Under catastrophic coverage, you will only be required to pay a very small set dollar amount or a small percentage for each formulary prescription medication. The amounts are calculated on a yearly basis with a new deductible starting anew each January 1. Many low-income subsidy patients are not required to pay the deductible or “Donut Hole” amount.

What Does "Formulary" Mean?

Medicare Part D’s formulary is a U.S. classification system that was developed by the U. S. Pharmacopoeia (USP). The formulary includes 41 categories for therapeutic medications. In simple terms, as a Medicare Part D patient, you must understand the types of prescription drugs that are included in the formulary to ensure coverage for your medications. You can discuss with your doctor the best type of medications to use that will be covered under your Part D plan.

Fortunately, an appeal system is in place if and when a prescription drug is absolutely necessary for treatment but is not included in the formulary. During the appeal process, the prescribing doctor is asked to certify that the non-formulary medication is the only effective one for your condition.

Out-of-Network Coverage and In-Network Coverage Explained

"Out-of-Network" means you are getting your prescription drugs filled at a pharmacy that is not a part of the Medicare Part D network. Pharmacies that are not "in-network" will typically charge more for the prescription drugs, thus, increasing the burden of cost for you.

Generally, an out-of-network pharmacy is only covered under Part D in rare circumstances when a network pharmacy is not available in your area. Or, coverage may be granted if you encounter serious health needs while traveling out of town or when a medically-necessary prescription drug is only available at a particular pharmacy that is not in the network. You should contact your local Medicare office before filling your prescription if a network pharmacy is not available.

How to Sign Up for Medicare Part D Coverage

If you already have the Medicare Advantage Plan, you may also have Part D coverage. If not, you may add Part D to your Medicare Advantage Plan or to your Original Medicare Plan if you are already have these types of coverage. Part D can also be added to medical savings account plans, private fee-for-service plans, and some Medicare cost plans.

Another way to get Part D coverage is to apply through your HMO plan or PPO plan that offers Medicare Part D coverage. Normally, you will be required to pay a monthly premium based on the plan you choose.

How Part D Works after Joining

Once you have been approved for Medicare Part D coverage, you will receive a membership card as well as helpful materials through the mail. When you use your Part D card, you'll pay a coinsurance or co-pay, or a deductible.

If you are unable to afford the premiums or co-pay amounts for Medicare Part D, assistance is available to help cover your costs through programs such as Medicaid or Medigap if you meet certain income requirements.

Prescription drug costs can be a real financial burden if you frequent the pharmacy. Check with your local Medicare office or your current health insurance provider to find out if you are eligible for this helpful prescription drug plan.

Written by Candice Pardue

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