Prescription drug coverage is the most complex part of Medicare. The following description barely scratches the surface. Prescription drug coverage is available to everyone with Medicare and is only available through Private Insurance Companies. Even if you don’t take many prescriptions now, you should join a Medicare drug plan. Just because you take no medications today does not mean it will remain that way tomorrow. If you do not join a Medicare drug plan when you’re first eligible, and you don’t have other creditable prescription drug coverage, or you don’t get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later. To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and specific drugs covered.
There are 2 ways to get Medicare prescription drug coverage:
· Medicare Prescription Drug Plans: These PDP plans add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
· Medicare Advantage Plans (like an HMO or PPO): These plans provide all of your Part A and Part B coverage, and prescription drug coverage (Part D). Medicare Advantage Plans with prescription drug coverage are called MA-PDs. You must have Part A and Part B to join a Medicare Advantage Plan.
You must live in the service area of the Medicare drug plan you want to join.
If your Medicare Advantage Plan includes prescription drug coverage and you join a Medicare Prescription Drug Plan, you’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare. In other words, you are allowed Prescription Drug (Rx) coverage from only one source.
Most Medicare drug plans have a coverage gap (the “donut hole”). This means that there’s a temporary limit on what the drug plan will cover for drugs. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2015, once you enter the coverage gap, you pay 45% of the plan’s cost for covered brand-name drugs and 65% of the plan’s cost for covered generic drugs until you reach the end of the coverage gap. Not everyone will enter the coverage gap.
Some plans offer additional coverage during the gap, like for generic drugs, but they may charge a higher monthly premium. Check with the plan first to see if your drugs would be covered during the gap. In addition to the discount on covered brand-name prescription drugs, there will be increasing coverage for drugs in the coverage gap each year until the gap closes in 2020.
What is the Part D late enrollment penalty?
The late enrollment penalty is an amount that’s added to your Part D premium. You may owe a late enrollment penalty if at any time after your initial enrollment period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other creditable prescription drug coverage. If you get Extra Help, you don’t pay a late enrollment penalty.
In order to avoid paying a penalty, you can:
· Join a Medicare drug plan when you’re first eligible. · Don’t go 63 days or more in a row without creditable drug coverage. · Tell your plan about your drug coverage history
When you join a Medicare drug plan, if the plan believes you went at least 63 days in a row without other creditable prescription drug coverage, the plan will send you a letter. The letter will include a form asking about any drug coverage you had. Complete the form and return it to your drug plan. If you don’t tell the plan about your creditable prescription drug coverage, you may have to pay a penalty.
How much is the penalty?
The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($32.42 in 2015) times the number of full, uncovered months that you were eligible but didn’t join a Medicare drug plan and went without other creditable prescription drug coverage. The national base beneficiary premium changes each year, the penalty amount may also change each year. You have to pay this penalty every month for as long as you have a Medicare drug plan unless you become eligible for Extra Help.
If you have limited income and resources, you may qualify for help to pay for some health care and prescription drug costs. Extra Help is a Medicare program to help people with limited income and resources pay Medicare prescription drug costs. You may qualify for Extra Help, also called the low-income subsidy (LIS), if your yearly income and resources are below certain limits.
Extra Help / Low Income Subsidy (LIS)
You automatically qualify for Extra Help if you have Medicare and if you:
· Have full Medicaid coverage. · Get help from your state Medicaid program paying your Part B premium · Get Supplemental Security Income (SSI) benefits.
The Surrett Group has partnered with the National Council on Aging to gain access to the BenefitsCheckUp Tool. This valuable tool can allow us to help you find money-saving programs that can help pay for your prescription drugs, Medicare Part “B” premium, health care, utilities, taxes and more. In just 15 minutes, we can tell you what benefits you may be qualified to receive. There is no cost or obligation for this service.