Medicare FAQs - Medicare Part D
1. What does Medicare Part D cover?
Medicare Part D helps cover prescription drugs.
2. What is Medicare Part D?
Medicare Part D is prescription drug coverage.
3. Are all drugs covered under Medicare Part D?
No. Although most prescription drugs are covered under Medicare Part D, there are certain medications, such as those administered in a doctor's office, that are covered under Medicare Part B. If you're interested in Part D coverage, you should contact the plan administrator to see if the drugs you take are covered.
4. Who is eligible for Medicare Part D?
If you are entitled to Medicare Part A or are enrolled in Part B, you can get prescription drug coverage under Medicare Part D.
5.How do I purchase Part D benefits?
Part D benefits can be purchased in two different ways. You have a choice of private drug plans that are either integrated with medical coverage (Medicare Advantage-Prescription Drug or MA-PD) or offered as a stand-alone prescription drug plan (PDP). Which one you are eligible to purchase can depend on how you are receiving your Medicare Part A and Part B benefits.
A stand-alone Medicare prescription drug plan (PDP) can be purchased to add coverage to Original Medicare, some Medicare private fee-for-service (PFFS) plans that do not offer integrated Medicare prescription drug coverage, some Medicare cost plans and Medicare medical savings account plans.
Most Medicare Advantage Plans (like an HMO or PPO) and other Medicare health plans include integrated coverage for prescription drugs. You then get all your healthcare and prescription drug coverage through one plan.
6. How much will I pay for Medicare Part D?
If you decide to get a stand-alone Medicare Part D plan, you will pay a monthly premium. Premiums differ from plan to plan. You should be aware that individuals with higher incomes will pay more for Medicare Part D. If you have to pay more for Medicare Part D, Social Security will deduct the extra amount from your Social Security check. Following is a table that provides you information on how much you will be charged if you have to pay extra for Medicare Part D in 2015. This charge will be in addition to what you pay for your Medicare Part D premium:
|If your annual income is...||Add the following amount to your Part D premium:|
|File Individual Tax Return||File Joint Tax Return|
|$85,000 or below||$170,000 or below||Your plan premium|
|More than $85,000 up to $107,000||More than $170,000 up to $214,000||Your plan premium + $12.30|
|More than $107,000 up to $160,000||More than $214,000 up to $320,000||Your plan premium + $31.80|
|More than $160,000 up to $214,000||More than $320,000 up to $428,000||Your plan premium + $51.30|
|More than $214,000||More than $428,000||Your plan premium + $70.80|
7. What is the donut hole or coverage gap?
Some Medicare drug plans have a coverage gap, often called a "donut hole." Historically, this has meant that after you have spent a certain amount of money for covered drugs, you have to pay all costs for drugs until you've paid a total of $4,700 out of pocket, after which you'll fall into catastrophic coverage where your plan will pick up most of the cost of your drugs. In 2015, help will be available for people falling into the donut hole - if you reach the donut hole, you'll get a 55 percent discount on brand-name drugs and a 35 percent discount on generics until you've reached catastrophic coverage. The discount will not affect how quickly you go through the donut hole; in other words, if you get the discount, that won't mean that you'll be in the donut hole longer.
8. What do I need to know about joining a Medicare prescription drug plan?
To join a drug plan, you must be entitled to Medicare Part A or have Medicare Part B and live in the service area of the plan. Drug plans offer their benefit options in specific service areas. Beneficiaries are eligible to purchase only plans offered in the area where they reside.
You are eligible to enroll in a Medicare drug plan only during certain time periods depending on your situation:
- Initial Enrollment Period (IEP) takes place when you first become eligible for Medicare. You can join starting three months before the month you turn age 65 through three months after the month of your 65th birthday. If you join during the three months before turning age 65, coverage begins the first day of the month of your 65th birthday. If you join the month of your 65th birthday or during the three months after, coverage is effective the first day of the month after the month joined. Disabled beneficiaries can generally join three months before and three months after the 25th month of disability benefits.
- Annual Open Enrollment Period (AEP) runs each year from Oct. 15 - Dec. 7. During this period, you may change prescription drug plans, add a drug benefit or switch plans. If you join during this time, the coverage is effective Jan. 1 of the following year.
- Special Enrollment Periods (SEPs) are periods outside of the enrollment periods listed above where members of Part D plans can enroll or disenroll from the plan. SEPs can only be used in certain circumstances, and members need to work with their plan or Medicare to get one. For example, if during the year a member feels that their plan has misled them about their coverage or has provided them with sub-par service, they may be able to request a SEP to disenroll from their current plan and enroll in a new one. Or, if a member moves out of their plan's service area, they can ask to be disenrolled from the plan and enroll in a new one that is in their service area. The Centers for Medicare & Medicaid Services (CMS) and the plan have the authority to create SEPs in exceptional circumstances.
9. What is the late enrollment penalty for Part D?
If you do not join a drug plan when first eligible, you may have to pay a penalty for enrolling later. This means that you may pay a higher premium for as long as you have Medicare drug coverage.
In most cases, you will pay a penalty if you:
- do not join when first eligible for Medicare, and
- do not have creditable prescription drug coverage, or other prescription drug coverage that is, on average, at least as good as standard Medicare prescription drug coverage
To estimate the penalty, take one percent of the national average benchmark premium for the coverage year. The national average benchmark premium for 2015 is $33.13.
Multiply it by the number of full months that you were eligible to join a Medicare drug plan and weren't enrolled in one. The answer is the penalty amount. This penalty amount is added to the monthly premium of whichever Medicare drug plan you join for as long as you are in the plan. The penalty is recalculated each year there is a change in the national average premium. If you have to pay a penalty, the Medicare drug plan you joined will tell you the amount that must be paid.
If you are told that you need to pay a penalty but disagree with the plan, you can request that the plan reconsider the late enrollment penalty. To do so, you should contact your plan and they will provide you with the appropriate forms and instructions.
10. What drugs are covered by Medicare?
Medicare Parts A and B-Covered Drugs
Traditional Medicare (Parts A/B) does not cover most outpatient prescription drugs. Medicare Part A bundled payments made to hospitals and skilled nursing facilities generally cover all drugs during an inpatient stay. Medicare Part B makes payments to physicians for drugs or biologicals that are not usually self-administered. Part D does not generally cover drugs that fall under Part A/B.
Part D-Covered Drugs
A covered Part D drug includes prescription drugs, biological products, insulin and certain vaccines. The definition also includes "medical supplies associated with the injection of insulin (as defined in regulations of the secretary)." These medical supplies include syringes, needles, alcohol swabs and gauze.
Over-the-counter products (OTCs)
The definition of the Part D drug coverage does not include OTCs. Therefore, Part D plans cannot include OTCs in their drug benefit or supplemental coverage.
By law, there are certain types of drugs that Medicare must exclude from Part D. These include drugs used for anorexia, weight loss or weight gain; fertility drugs; drugs used for cosmetic purposes or hair growth; cough and cold medicines; prescription vitamins and minerals and over-the-counter drugs.
11. What are the drug coverage regulations for Part D plans?
Medicare drug plans must cover prescription drugs in all prescribed categories and classes, but Medicare drug plans do not have to cover every drug in a given class or category.
12. Can a Part D plan stop paying for my medication?
Yes, but there are specific regulations the plan must follow. Prior to removing a covered Part D drug from its Part D plan's formulary, or making any change in the preferred or tiered cost-sharing status of a covered Part D drug, a Part D plan must either:
- Provide direct written notice to affected enrollees at least 60 days prior to the date the change becomes effective; or
- At the time an affected enrollee requests a refill of the Part D drug, provide such enrollees with a 60-day supply of the Part D drug under the same terms as previously allowed and written notice of the formulary change.
If the Federal Drug Administration (FDA) has decided that a drug is unsafe, the plan must remove the drug from its formulary immediately and notify members as soon as possible, but within no less than three days of the drug's removal from the formulary.
13. What is the transition policy regarding Part D coverage?
Because not all plans cover the same Part D drugs or may have different utilization management requirements, a Part D plan must provide new members with an appropriate transition period of at least 90 days after the effective date of coverage. This means that if a new member is taking a medication that is covered under Medicare Part D, but is moving to a plan that either doesn't include that drug on its formulary or includes it but has other utilization management requirements, the plan must let the member know that their drug is not covered and cover a temporary supply of the drug while the member either requests a prior authorization or obtains a new prescription for a medication that is on the plan's formulary.
New enrollees can take advantage of a plan's transition policy in the following situations:
1) The enrollee is newly eligible for Medicare coverage and has enrolled into a Part D plan;
2) The enrollee is switching from one Medicare plan to another; and
3) The enrollee lives in a long-term care (LTC) facility.
14. What is utilization management?
All Part D plans are required to have utilization management programs in place. These programs work to ensure that the prescription drugs are taken safely and effectively while helping members keep costs down.
Prior authorization means that before a plan will cover certain prescriptions, the participant's doctor must first contact the plan and show that there is a medical reason why you must use that particular drug to treat the condition.
Step therapy helps members manage their prescription drug costs by requiring them to try a generic equivalent of a brand-name drug (if available) before getting a similar, more expensive brand-name drug covered. The physician can contact the drug plan to request an exception.
For safety and cost reasons, plans may limit the quantity of drugs that they cover over a certain period of time. For example, you may be prescribed a drug with the instruction to take one tablet per day. In this instance, a plan may cover only a 30-day supply at a time (up to 90-day supply if filled through a plan's mail-order program).