Medicare Part D: The Basics

By Martine G. Brousse

"The Medical Bill Whisperer... and insurance stuff too"

Patient Advocate, Certified Mediator

AdvimedPro

September 19, 2023

Watch the YouTube video: https://youtu.be/4pnW-MTnkZk

Medicare has many parts: A,B,C,D

This blog addresses part D, the 4th in a serie of 4

In blog on part A, I covered services considered “inpatient’' or “facility”. This means hospital, skilled nursing facility, hospice and some home health care services.

In blog on part B, I covered services considered “professional” (by individual medical care providers) as well as “outpatient” and others (labs, tests, durable medical equipment, some preventive care, etc)

Part B also covers drugs you wouldn't typically inject or infuse yourself, like those you get at a doctor's office or in a hospital outpatient setting.

In blog on Part C, we saw that Part C delivers the same coverage as Part A and Part B, but under a plan administered by a private insurance company.

A. What is part D?

1. Prescription Drug plan that covers:

· Prescription drugs you get from a pharmacy (retail or mail order)

· Self-administered Rx that is injected (insulin) or pumped

· Some vaccinations

2. Formulary

· Plans must cover at least 2 options per drug category, but plans pick which ones

· List of covered drugs may change based on updated manufacturers’ pricing, FDA approval process, new generic options etc

B. Plan Choices

1. Plans administered by private insurance companies must follow rules set by Medicare

· For coverage

· For share of cost limits

2. If you have a Medicare Advantage plan:

· Part D is usually included BUT

· Some part C plans may drop you if they don’t offer, or aren’t allowed to offer part D and you buy a separate policy

· Don’t ask, makes no sense to me either

3. If you have Original Medicare

· You can buy a separate Part D policy

· You may have Rx coverage under an employer’s or union’s policy (if you still work, or your spouse does or as part of your retirement package)

· You may have Rx benefits through other government-issued plans (Medicaid, Tricare, VA…)

C. What does it cost?

Like everything else in healthcare, it depends:

1. Terms of coverage

· Premiums will depend on what plan is available in your area and in your budget

· Although private-run part D plans must offer (at least) 2 choices per type of drug, they get to pick which ones

· The plans can change the formulary at any time, based on financial or medical reasons (lower price available for different drug, generic option now on the market, FDA's approval given or removed)

· Plans can change the cost of specific drugs as they see fit (for example increase the price of brand prescription if a new generic option becomes available)

· A 30-day notice must be given to you if there is a change in the formulary or tier status of the prescription you are on to allow a switch to the now preferred version, or agree to pay more to remain on the same regimen.

2. Yearly $ limits (set by Medicare)

· Deductible: if your plan has one, it cannot exceed $ 505.00 (in 2023) or $ 545.00 (in 2024)

· Once met, your plan starts partially paying on your behalf, up to a combined limit of

$ 4,660.00 (in 2023) and $5,030.00 (in 2024)

· After that “coverage limit” is met, your share of cost is limited to 25% of the price of the drug up to a new max: $ 7,400.00 (in 2023) and $8,000.00 (in 2024)

· Should you reach that limit, “catastrophic coverage” kicks in: you pay 5% max of the cost of the drug (in 2023) and $ 0.00 (as of 1/1/24).

. NEW INSULIN BENEFIT! The cost of a one-month supply of each Part D-covered insulin is capped at $35 and you don't have to pay a deductible. If you get a 60- or 90-day supply of insulin, your costs can’t be more than $35 for each month’s supply of each covered insulin.

3. Dispensing Fee

· Your pharmacy may impose a (small) “dispensing fee”

· It is NOT payable by your plan

· It is your responsibility, and does not accumulate toward your yearly deductible or share of cost limits

4. Tiers System

· Plan determines which drug is in which Tier

· Using the proper Tier cost you less

· If you must or prefer to use a drug in a more expensive Tier, you will pay more

5. Right to “Exception”

If your Dr might prescribe a specific drug with a higher cost to you (brand-name or not on the formulary) because …

· Shortage of the formulary or generic option

· Adverse reaction or allergy

· Counter-indication with other prescription(s)

· Specific medical necessity

· No equivalent generic alternative

· Failed past treatment

… he/she can request an “exception” and coverage at the lowest rate for that treatment.

The plan will issue a one-time exception authorization allowing you to get the prescription at the same lower cost than the option on the formulary or lower tier.

D. Tips

1. Timeliness

· You must buy Part D when first eligible for Parts A and B, or will have to pay a yearly penalty if obtained later …

· … unless your existing plan (through employer, union, Medicaid, VA, Tricare etc) is comparable in the scope of benefits (“Creditable coverage”)

2. Be aware:

· Your medical coverage, or participation in a part C plan, may be impacted by your choice of part D plan

· Your plan’s guidelines may be different than Medicare’s, affecting your bottom line and possible penalties

· You might already have approved Rx coverage through an existing policy

3. Double-check:

· Call your insurance agent, or a Marketplace Certified Navigator

· Call 800-medicare or go to www.medicare.gov

· Call your HR or union insurance liaison

4. For more details, or to locate a plan, visit: https://www.medicare.gov/drug-coverage-part-d

Martine Brousse was a long-time Billing Manager for Physicians before switching to the side of patients in 2013. The move has allowed her to apply her deep expertise and vast experience of the intricacies of resolving all types of medical bill and claim payment issues in ways that directly and positively impact her clientsʻ finances.

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@martine brousse 2023@ the medical bill whisperer 2023