What Is Medicare Part D & How Does It Work?
Understanding The Basics Of Medicare Part D
Medicare Part D is an optional Medicare insurance program that provides coverage for prescription medications. You will pay a monthly premium for your Part D coverage, but it can be a beneficial add-on to your other Medicare programs for medications you are currently taking or may need to take in the future. Medicare Part D is separate from Medicare Parts A, B, and C. In order to enroll in Part D, you must also be enrolled in either Part A and/or Part B.
How Exactly Does Medicare Part D Work?
Your Chandler Medicare insurance agents can help you understand the four stages to a Medicare Part D plan:
Annual Deductible
The allowable Medicare Part D deductible for 2022 is $480. You will pay the network discounted price for your medications until you reach $480 in spending. After that, you’ll enter initial coverage.
Initial Coverage
Once you’ve reached your annual deductible, you will pay a copay for your medications. To determine the amount you pay, medications are divided into three tiers, each with different copay amounts. For example, a Tier 1 generic medication may have a $7 copay. A Tier 3 medication may be a preferred brand name but will come with a higher copay, such as $40. Your insurance company will track the spending by both you and the company until you have spent a total of $4,430 on prescription medications that year.
The Coverage Gap
After you’ve reached the initial coverage limit, you’ll enter into the coverage gap stage. While you’re in the coverage gap, you pay 25% of the retail cost of your prescription medications. This will continue until you have spent $7,050.
Catastrophic Coverage
The final stage of coverage is the catastrophic coverage stage. Your insurance plan will pay 95% of the cost of your medications for the rest of the year. This feature helps limit your spending if you have expensive medication needs.
Medicare Part D plans may change from year to year. This means that the benefits, pharmacy network, provider network, premium amount, and/or copay amounts may change on January 1 of each year. You have the option to switch plans during the annual open enrollment period if your updated plan no longer meets your needs. If you’d like to examine your plan’s benefits or switch to a new plan, talk with your Glendale Medicare insurance brokers for assistance.
Medication Utilization Rules Affecting Medicare Part D Coverage
In order to reduce overall costs and prevent abuse of prescription medications, Medicare allows their insurance carriers to apply certain rules. These rules include:
Quantity Limits
This refers to a limit on how much of any medication you can purchase at a time or how large of a refill you can receive. If your doctor prescribes more than the quantity limit, your insurance company will ask him or her to file an exemption form explaining your needs.
Prior Authorization
This requirement means that your or your doctor’s office will need to receive insurance plan approval before a pharmacy can prepare specific medications. They may also ask for proof that the medication is medically needed. Most commonly, prior authorization applies to medications that are very expensive or very potent. Your doctor may need to explain why you need this medication and cannot use a less expensive alternative.
Step Therapy
Many insurance plans will require you to try an alternative, less expensive medication for the same condition before they will approve something more expensive. If it works, you and your insurance company will both save money. If it doesn’t work, your doctor will likely need to file an exception form and may need to document that you have already tried other less expensive medications, without results.
Some medications, such as compound medications, are not covered by Medicare Part D, so you may need to be prepared to pay out of pocket for certain formulations. There are also limits on medications such as narcotics, opiates, and pain medications. To make sure you fully understand your coverage options, ask your Gilbert Medicare insurance agents to help you review all of the details before you enroll in Medicare Part D.
Prepare For The Future With Medicare Part D
Some people wonder if Part D coverage is worth the cost, but you may be relieved to learn that many Part D programs cost as little as $15 per month. For this reason, it’s commonly recommended that seniors add Part D coverage to their Part A or Part B plans, especially if they have health conditions or are at risk for health issues. Medicare Part D coverage applies not only to medications you’re currently taking, but anything you may be prescribed later in the year, so it can provide peace of mind in case you need more medication coverage than you anticipate. Since Part D is voluntary, you’ll want to make sure to talk with your agent about enrolling if you want prescription medication coverage.
Enroll In Medicare In Phoenix Today
Learn more about which Medicare programs may be right for you and get enrolled by calling Phoenix Health and Life Insurance. We serve thousands of clients across the valley and are ready to help you, too! Call our offices to schedule an appointment with one of our experienced agents.
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