PART D Explanation
Good morning All,
I hope life is good in your world. Today, I want to talk about the fourth part of Medicare. This is for anyone going on Medicare at age 65 and for people doing research on the Medicare for All and are curious about what it would look like in its current state. Once again, this is not a political statement, nor am I looking at the costs for the government. I have no use for any of the political parties so I am not leaning one way or the other. In the words of Joe Friday from Dragnet, “Just the facts.” these numbers are for 2018, I will update the figures as soon as they come out.
Part D is a prescription plan through Medicare. In order to qualify for Part D you must be eligible for Part A or enrolled in Part B. Part D works differently than the prescription plan you have through work or through ACA. The premiums as of 2018 start off at $13.30 per month all the way up to $125.00 per month depending on the Medications you are taking. Each plan has its own formulary and preferred pharmacy network. The formulary can change within a given year, but if it does change you will receive a written notice and a 60 day supply of your current medications.
Something else to consider when you are on Part D is if you are currently receiving a discount from the manufacturer that significantly lowers the amount you have to pay for those Tier 3-Tier 5 prescriptions in most circumstances you will not receive that discount any longer. Medicare does have some programs in place to assist with the costs of some medications, but there are bureaucratic steps to get approved.
The deductible on most of these plans is $405.00. After your deductible has been met, you will enter the Initial Coverage phase of Part D. In The Initial Coverage stage, the insurance company will pay the lion’s share of your medications cost. The Initial Coverage stage lasts until you and the insurance company has paid $3750.00. This does not include your monthly premium, just your co-payments.
You will have lower co-pays for Tier 1 and Tier 2 prescriptions, in some circumstances $1.00 or $2.00 per prescription. If you are on a name brand medication that is in the formulary, you could pay up to 33% of the prescription costs.
Now, we get to the bad part of Part D. I am a larger person, to put it mildly, and I love donuts. When I first heard the nickname of the next part, my mouth watered. It is the coverage gap or the donut hole. I was not paying attention to the “hole” part of the donut. This is the phase of Part D where you will pay a larger portion of your prescriptions costs. You will pay up to 35% of the prescriptions. The coverage gap lasts for the next $5000. You can figure out how long you will be in the coverage gap this way, take 85% of what you and the insurance company have paid in copayments during this period.
For example, let’s say you are taking a medication that costs $1000. You will pay 35% or $350.00 for the medication during the donut hole. You will be able to count 85% of the prescriptions cost for donut hole. So for that month, $850.00 would count towards the $5000.
After you and the insurance company have paid $8750.00 in drug copayments you enter the catastrophic coverage period. This will last through the end of the year. You will pay the greater of 5% or $3.85 for generics and the greater of 5% or $8.35 for brand names.
Guess what, it starts all over on December 31st of each year.
I hope this clears the water so to speak if you have any questions about Medicare or any other insurance options please give me a call or shoot me an email.
As always do something nice for someone today, just because.
All the best,
Randall J. Lawson
The HgO Group
National Producer Number #9276045
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