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Question from Patricia: I think I get the differences between Supplements and Advantage Plans. However, I’m not clear how you add on Prescription coverage. Most people who are complaining are doing so about the cost of medicines. I would like to avoid this if possible.
Great question. There are indeed some differences in how those on Advantage Plans and Supplements get their Part D prescription plans.
Almost all Medicare Advantage Plans come with Part D embedded in them, hence the anacronym MAPD. The only people who generally choose plans without Part D prescription benefits are those who can get medications through another source, namely PACE, PACENET, or the VA. One of the most popular plans among our clients is an HMO without drug coverage. It has the lowest annual Maximum Out of Pocket (MOOP) on the market as well as very competitive co-pays for hospitalizations among other services.
But as I mentioned, 95% of all other HMO and PPO’s have drug coverage. The companies that provide them must divide the total monthly premium up between medical and prescription coverage. In other words, a plan with a $50 premium might be $13 for Medical and $37 for Part D. If you have your Medicare Advantage Plan premium deducted from your Social Security check, you can see what those costs are on the statement you get every November. Those on MAPD plans have just one card they show to their medical providers and the pharmacy. A Medicare card is not necessary since Advantage Plans are designed to pay in place of Medicare, not in addition. See last week’s column for more information regarding this and the other differences between the two types of plans.
People who have Supplements must purchase what is known as Stand Alone Part D. It’s another policy that’s bought and billed separately. It’s usually provided by a different company. The most popular plans for 2020 run between $13 and $22/month. Those who have Supplements and a Stand-Alone Part D plan carry three cards: Original Medicare, a Supplement card, and another for Part D they show at the Pharmacy.
Patricia stated in her question that the complaints she hears most from those on Medicare are about the high costs of prescriptions. Generally, those complaints are coming from people who fall into the Doughnut Hole. Unfortunately, it didn’t go away as promised and can’t be avoided by choosing an Advantage Plan instead of a Stand-Alone Part D or vice versa. It also can’t be averted by choosing a different Part D or MAPD plan or company, even one that’s more expensive. In 2020 regardless of plan, MAPD or Stand-Alone Part D, everyone will hit the Doughnut Hole once they have received $4,020 in retail medications. What your co-pays are have no bearing on it. The full cost of medications counts towards the $4,020. Being that the average brand name drug now retails between $400 and $700 for a 30-day supply, it won’t take long to get there. Once it’s reached, the co-pays for Tier 3 (Preferred Brand) medications jump from $35 to $50 for a 30-day supply to 25% of the retail cost, between $100 to $175! You can’t escape the Doughnut Hole until you have spent approximately $2,400 out of your own pocket. I’ve often said it should be called the “Black Hole.” Doughnuts are good. Watching your money disappear isn’t.
I would like to point out that those who have Stand Alone Part D are subject to a deductible of $435 for Tier 3, 4, and 5 drugs. Tiers 1 and 2 on almost all plans are not subject to that deductible. Up until this year, there were some lower cost Part D plans that didn’t have a deductible, but that is no longer the case. Many people weren’t aware of that going into the new year.
Medicare Advantage Plan HMO’s and PPO’s do not have a deductible for medications. This can be a factor when determining what type of plan to choose but shouldn’t be the only one people consider when deciding between an Advantage Plan or Supplement.
There are ways to avoid the Doughnut and get help if you find yourself there. If you would like some guidance in this regard feel free to reach out and a member of our team will be glad to help. We have years of experience and knowledge of several programs and tricks the drug manufactures would rather you not know about. We don’t charge for this type of advice or consultations to go over your Medicare options.
The Health Insurance Store is open for business, although we are not able to meet people face to face. If you are new to Medicare or retiring, we can go over your options via the phone or in a virtual appointment online where you can interact live with an agent. If you are a client and have a question or issue, give us a call and we will take care of you as always. If you would like to speak to an agent or make an appointment, reach out via phone or visit us on the web at getyourbestplan.com, where you can also find archived columns as well as recent podcasts. Follow us on Facebook as well for the latest healthcare related news and information.
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