Welcome back to “New to Medicare!”
This is the 8th, and second to last column of my “New to Medicare Series” which is designed to help educate those who will be going on Medicare Part A, B, or both in the near future. If you want to read the previous seven, you can find them on our website along with the podcast and webcast versions.
This Week’s Question
How are prescriptions covered for those on Medicare? What is the Doughnut Hole? Why are drugs more expensive for those on Medicare?
Answer
Part D
Medicare prescription drug coverage is referred to as Part D.
Unless they have access to another prescription plan such as the VA or one provided as a retirement benefit, those who choose Supplements generally need to purchase a “Stand-Alone” Part D plan, which is a separate policy, usually provided by a different company than one’s Supplement.
Those who go with Advantage Plan HMO’s or PPO’s generally have Part D included in their plan. The only significant difference between drug coverage in Stand Alone and Advantage Plans is the $445 deductible on Tier 3, 4, and 5 medications that the majority of Stand Alone Plans have. Currently, there are no deductibles for drugs with Advantage Plans.
Part D is Federally regulated in the same ways to protect consumers regardless and include the following: All plans must cover at least two drugs for every diagnosis, and most cover many more. If a medication is not on a plan’s formulary (list of covered drugs), an “Emergency 30-day Transitional Supply” must be provided by the plan. This gives one time to get with his or her doctor to see if the alternatives the plan covers are safe and/or effective to take. If they’re not, or have been taken previously with negative results, one can file for an “Exception to the Formulary.” When one’s doctor points out the medical reason(s) a patient can’t take the alternatives, Part D plans must cover the prescribed drug, even if it’s not on formulary. We have never run into a situation where a client’s life sustaining medication was denied for a Formulary Exception.
Another protection is the right to request a “Tier Exception.” For example, Tier 4 Non-Preferred Brand drugs have extremely expensive co-pays, and some generic drugs can often be tiered as brands which also can result in higher costs. If the less expensive and lower tier drugs can’t be taken as I just described in the Formulary Exception case, the insured can ask to have the tier of the more expensive drug lowered, reducing the price. Most of these requests are approved in my experience.
Varying Criteria
Part D plans do have some other criteria that can vary from plan to plan such as “Quantity Limits (QA),” “Step Therapy (ST),” and “Prior Authorizations (PA).” QL is self-explanatory and means there’s a maximum number of pills or capsules that can be filled per month. This can be appealed if a doctor believes more are necessary. Before a medication that requires ST is covered, an alternative medication(s) must be taken. If you have already tried the alternatives with unsuccessful results or side effects, you can ask for this to be waived. PA means one’s doctor must first provide a reason why taking the drug is medically necessary before it’s covered. A denial by the plan can be appealed, although our experience is these are a bit tougher to get overturned.
Medicare prescription drugs can be more expensive than they are for those who have individual or employer health insurance, especially for brand name drugs, mostly due to what is known as the Donut Hole, aka Coverage Gap. After someone who has Medicare Part D has received $4,150 worth of retail prescription drugs in a calendar year, they will find themselves in the Donut Hole. Be advised that figure has nothing to do with what the consumer pays, but the full cost of the drug. Once in the Donut Hole, prices for Tier 3 brand name drugs go from a flat co-pay of $35 to $47 for a 30-day supply, to 25% of the retail cost. That may not sound too bad and $4,150 may seem like number that most will never reach, until realizing that the average cost of brand name drugs is now $500 to $700 for a 30-day supply. That means the $4,150 will be exhausted in six to eight months and that would be if only a single medication was being taken. One doesn’t come out of the Donut Hole and into what is known as the Catastrophic Stage, until approximately $2,200 to $2,500 is spent out of pocket on medications. In the Catastrophic Stage, drug costs go down to 5% of the retail or $9, whichever is greater. However, only a small percentage of those who hit the Donut hole ever graduate to the Catastrophic Stage. Be advised: You cannot buy a plan that eliminates the Donut Hole. In addition, paying more money for a Stand-Alone Part D plan does not mean you will pay less for medications.
Who can help?
We help all our clients though these processes and appeals. We also have a dedicated staff member, Tony DiRoma, our Prescription Drug Caseworker, whose job it is to council clients and help them find financial relief when medications get expensive. Tony’s services are one of the many benefits of choosing The Health Insurance Store to help make your choice in Medicare plans and becoming a client.
You don’t have to be a current client if you would like us to review your Part D plan each AEP. If you bought one elsewhere and would like to be put on our mailing list to have that done, give us a call. In addition, retired public school teachers and employees who have the HOP Medical Plan are almost always better off keeping their Medical Plan, but buying Medicare Stand Alone Part D. The average savings for those who move from a HOP Rx plan to Part D is over $500 per year.
Thank you!
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.
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