Medicare Part D

1. What is Medicare Part D?
2. Medicare Part D Glossary of Terms
3. Medicare Part D Coverage
4. Medicare Part D Costs
5. Medicare Part D and Other Insurance Plans

Original Medicare does not cover most prescription medications. In order to access prescription drug coverage, you must purchase a Medicare Part D plan. This is a prescription drug plan (PDP) in which you buy Part D coverage from a private insurance company that has a contract with Medicare. This provides coverage for prescriptions that are filled at pharmacies in retail and health care facilities.

All Medicare Part D plans are required to cover an extensive range of prescription drugs that are typically taken by people with Medicare. This includes generic and brand-name drugs, and plans must cover most drugs in certain protected classes, such as those used to treat cancer, HIV/AIDS or immunosuppressants for organ transplants. Each plan has its own list of covered medications, which is known as the plan's formulary. 

All Part D plans generally must cover at least two drugs in each drug category, but plans can choose which to cover. Coverage can include both name-brand and generic medications, but there is no requirement to cover a generic. 

Plans generally place drugs into different tiers with corresponding cost levels. In most cases, a medication in a lower tier costs less than one in a higher tier. A plan could have anywhere from three to six tiers, and each plan will follow its own unique cost structure.

Below is an example of a four-tier Part D structure. 

If a medication isn’t covered by your Medicare Part D plan, you can request a formulary exception. Your healthcare provider will be asked to provide a supporting statement explaining the medical reason for that specific medication. The request will be reviewed by the insurance carrier you have your Part D coverage through, and you will be notified if the exception has been approved or denied.

Medicare Part D plans are on annual contracts, and the benefits and coverage can change from year to year. Changes will typically occur at the end of a calendar year, and you will be notified if one of your prescribed medications is no longer covered by your plan. Although it is not too common, occasionally, these changes can take place mid-year, and you will need to request a formulary exception as described above. If your prescription will no longer be covered by your plan, the insurance company must:

• Give you notice at least 30 days before the effective date of the change; or
• Provide written notice of the change and at least one month’s supply of the medication at the time a refill is requested.

Learn more about Medicare Part D at a FREE informational webinar. Visit our list of events to register for the webinar that fits into your schedule.

There is a premium for Part D. In addition, Part D plans include co-insurance in the form of co-pays, deductibles, or co-insurance as a percentage of the cost of the medications. The formulary on each PDP is different. When choosing a plan, you will want to ensure your current prescriptions are on the formulary.

Under a Medicare Part D plan, there are payments required throughout the year. Some may not apply to your specific situation.

• Premium
• Annual deductible
• Coinsurance or copayments
• Late enrollment penalties

Blog Post: What Is Medicare Part D and What Does it Cover?

Extra Help is a program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles, and coinsurance. If you get Extra Help but you’re not sure if you’re paying the right amount, call your drug plan. Your plan may ask you to give information to help them check the level of Extra Help you should get.

Depending on your situation, you may automatically qualify for Extra Help. This is determined by income and resources , and whether you receive Medicaid and/or Supplemental Security Income. If you don’t automatically qualify for Extra Help, you can apply at any time.

Once you qualify for Extra Help, you’ll have it as long as you meet current income and resource limits. If there are changes to your financial situation, you may no longer qualify.

If you have 63 or more consecutive days without Medicare or other creditable drug coverage at any time after your Initial Enrollment Period ends, you may receive a late enrollment penalty. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage. The amount may change every year

If you don’t agree with the late enrollment penalty, you can ask for a reconsideration. Your drug plan will send you information about how to request a reconsideration. In general, Medicare’s contractor makes reconsideration decisions within 90 days

If you don’t agree with the late enrollment penalty, you can ask for a reconsideration. Your drug plan will send you information about how to request a reconsideration. In general, Medicare’s contractor makes reconsideration decisions within 90 days.

Find out more about Medicare Penalties and How to Avoid Them

• Employer or Union Health Coverage: If you have drug coverage based on current or past employment, your employer or union will notify you each year to let you know if your drug coverage is creditable.
• Medicare Supplement Insurance (Medigap) policy with prescription drug coverage: It may be to your advantage to join a Medicare drug plan because most Medigap plans do not provide prescription drug coverage. You may pay more if you decide to join a drug plan later.
• Medicaid: Drug costs are covered by Medicaid. You’ll need to join a Medicare drug plan for Medicare to pay for your drugs.
• Supplemental Security Income Benefits: If you get benefits or help from your state Medicaid program paying your Medicare premiums, you will need to join a Medicare drug plan for Medicare to cover your drugs. You automatically qualify for Extra Help with prescription drug costs.
• State Pharmaceutical Assistance Program: Each state decides how its State Pharmaceutical Assistance Program (SPAP) works with Medicare prescription drug coverage.
• Federal Employee Health Benefits (FEHB) Program: These plans include creditable prescription drug coverage, so you don’t need to get Medicare drug coverage.
• Veterans’ Benefits: You might be able to get drug coverage through the U.S. Department of Veterans Affairs (VA) program. You may join a Medicare drug plan, but if you do, you can’t use both types of coverage for the same drug at the same time.
• TRICARE (military health benefits): You don’t need to join a Medicare plan if you have TRICARE. But if you do, your Medicare drug plan pays first, and TRICARE pays second.
• Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA): You may join a Medicare drug plan, but if you do, you won’t be able to use the Meds by Mail program which can give your maintenance drugs to you at no charge (no premiums, deductibles, and copayments).
• Indian Health Services: If you get drugs through an Indian health facility, you’ll continue to get drugs at no cost to you, and your coverage won’t be interrupted. Joining a Medicare drug plan or Medicare Advantage Plan with drug coverage may help your Indian health facility because the plan pays the Indian health facility for the cost of your drugs.

If you join a Medicare Advantage Plan, you’ll usually get drug coverage through that plan. Certain types of plans can’t offer drug coverage (like Medical Savings Account plans) or choose not to offer drug coverage (Private Fee-for-Service plans). If you have one of these plans, you can join a separate Medicare drug plan.

Talk to your current plan if you have any questions about what will happen with your coverage.

Once you choose a Medicare drug plan, enroll one of these ways:

• Call Twin City Underwriters: Phone: (651)-444-1190; Toll Free: 800-507-6778
• Enroll on the Medicare Plan Finder or on the plan’s website
• Complete a paper enrollment form
• Call the plan

When you join a Medicare drug plan, you’ll give your Medicare Number and date your Part A and/or Part B coverage started. This information is on your Medicare Card.

Get all the answers to your Medicare questions in our Medicare Resource Guide.

Do you have questions about Medicare, and which plan is right for you? Twin City Underwriters offers free informational Medicare webinars and one-on-one consultations with agents where you can ask questions and get personal answers. We can help you select the right coverage for your needs. To attend a webinar or set up an appointment, call us toll free at 1-800-507-6778 or send us a message.