Ask The Medicare Specialist

This is the 8^th, and second to last, edition of the “New to Medicare Series” which is designed to help educate those turning 65 or will be going on Medicare Part A, B, or both in the near future.

I want to remind readers that this series, and all columns, are not meant as a substitution for a one-on-one consultation with one of our licensed agents, nor are they written to sway your decision in enrolling in an Advantage Plan versus a Supplement or as an endorsement of any particular Advantage Plan or company.

How are prescriptions covered for those on Medicare? What is the Doughnut Hole? Is it true that no one on Medicare will have to pay more than $2,000 out of pocket per year for medications?

Medicare prescription drug coverage is referred to as Part D and the vast majority of people get it one of two ways: Those who choose Supplements generally need to purchase a separate policy known as a Stand-Alone Part D plan.  People who go with Advantage Plan HMO’s or PPO’s, with just a few exceptions, have Part D included.

Part D is regulated the same on both Advantage and Stand-Alone plans with the goal of protecting consumers. There are Formulary (list of covered drugs) Exceptions, Tier Exceptions, an Emergency Transitional Supply requirement for a drug not on formulary, as well as rules that call for at least two medications to be included for almost every possible medical diagnosis. There’s an appeal process available to make sure important prescriptions get filled promptly and priced fairly. Unfortunately, most consumers don’t understand their rights or how to file an appeal. There’s also confusion about the ability Part D companies have to utilize what are known as Quantity Limits (QA), Step Therapy (ST), and Prior Authorizations (PA). Quantity Limits is self-explanatory and means there’s a maximum number of pills or capsules that can be filled per month. Step Therapy forces an alternative medication(s) to be taken without success before the drug a doctor prescribed will be covered. Prior Authorization means the prescribing physician must provide a reason why taking that particular drug is medically necessary before it’s covered.  The Health Insurance Store staff are always available to walk clients through these processes and make sure it’s done correctly, that doctors cooperate, and the insurance companies respond in a timely manner per regulations. When we get involved, requests and appeals are almost always successful.

Those new to Medicare need to be prepared for the possibility prescription drugs may be more expensive than they were with individual or employer health insurance. There’s $590 deductible for Tier 3, 4, and 5 drugs on almost all Stand Alone Part D plans in 2025, which means the insured is responsible for the full cost of medications until that amount has been paid out of pocket. Some of the most popular Advantage Plans are now employing that deductible as well. Tier 3 drugs are 25% of the retail price on almost all Stand Alone, as well as many Advantage Plans, which can result in paying $150 for a 30-say supply of common Tier 3 drugs like Eliquis, to $250 for more expensive diabetes meds such as Ozempic. There are still some HMO’s and PPOs that have little or no deductibles as well as a flat Tier 3 drug co-pay of under $50. It’s very important to understand how much prescriptions costs will differ from plan to plan. It can often be the determining factor in the choice one makes.

There is some good news for 2025 and beyond. The Donut Hole no longer exists and there’s now a $2,000 out of pocket limit for covered drugs. In other words, once anyone on Part D has spent $2,000 at the pharmacy on covered prescriptions, those medications will be $0 for the rest of the year. There are some confusing nuances to the $2,000 limit, and with some plans the cap could be reached without spending the full amount, or even a dime with select Advantage Plans. The latter is possible by enrolling in a plan that offers certain Tier 3 diabetes meds at no cost. I’m not going to attempt to explain it all in this or any other column. It’s just too convoluted, which is why people seek out our services and lean on the knowledge and experience we have as Medicare becomes more complicated with each passing year.

Our agents will also help determine qualification for the federal “Extra Help” program or PACE, assistance through the state of Pennsylvania, that can reduce Part B and D premiums, eliminate deductibles and reduce drug costs. We assist in the enrollment process for those eligible, one of the many services we offer our clients.

If you have any questions regarding this column or any other in the “New to Medicare” series or would like to set up an appointment for a no cost consultation, please call one of our offices or reach out to me personally at Aaron@GetYourBestPlan.com.