The Background: Most people are automatically enrolled in Medicare when they turn 65 years old. What these new Medicare beneficiaries may not understand, however, is that their Medicare plan does not cover many of the medications they take every day. While professionally administered drugs (such as infusions at hospitals) are covered by Part B, self-administered “at home” prescriptions are not.
To help patients pay for needed prescriptions, Medicare Part D, also known as the Medicare prescription drug benefit, was added to the program in 2003. Part D is an optional government program to help Medicare recipients pay for most self-administered drugs through prescription drug insurance premiums.
Understanding the Medicare Part D “Donut Hole”
Within the Medicare Part D plan, there is a provision which often takes new recipients by surprise, and not in a good way. Unbeknownst to many, there is a gap which occurs between coverage periods which results in temporarily higher costs for you.
Your Medicare Part D Plan provides benefits up to a certain dollar amount, or your initial coverage limit. Once you have reached this limit, the plan enters a “coverage gap” – a period of time during which you will be required to pay a greater portion of your prescription drug costs. You will be responsible for paying this higher percentage until your level of spending reaches the catastrophic coverage phase. During the catastrophic coverage phase, you will once again only be responsible for a small copayment or coinsurance for your covered medications for the balance of the year.
The coverage gap which occurs between the initial coverage phase and the catastrophic coverage phase is referred to as the “donut hole.” This seeming lapse in benefits is often an unwelcome surprise to those who are on a fixed or tight budget, but require their medications to maintain quality of life.
Can You Avoid the “Donut Hole” Coverage Gap?
There are a few proactive steps which you can take to keep costs lower, with the ultimate goal of staying within your initial coverage limit.
- Consider switching to lower-cost medications. Ask your doctor if generic or over-the-counter prescription drugs are appropriate for your condition. Most generic drugs work just as well as their brand-name counterparts.
- Ask about the availability of prescription mail-order programs. You may be able to lower your costs on medications taken over a longer period of time, such as a 90-day supply.
- If your Medicare plan requires you to use in-network pharmacies to fill your prescriptions, stay in-network every time! In addition, some plans may suggest preferred pharmacies in the plan’s network which could represent further cost savings. Ask your plan administrator if using one pharmacy over another can keep your costs down.
- Using your Medicare plan membership card when paying for your prescriptions may qualify you for discounted rates on the medications you need. In addition, money spent on covered prescriptions automatically counts toward your plan’s deductible, if applicable.
- Look for organizations which exist to provide assistance to those in your situation.
* The National Patient Advocate Foundation may be able to assist with the cost of your prescription drugs.
* The National Council on Aging can offer guidance and assistance regarding your Medicare Part D plan.
* The Extra Help (Low-Income Subsidy) program is available to low-income beneficiaries and provides assistance with prescription drug costs. In addition, if you qualify through their program, you can avoid the coverage gap altogether.
There are many coverage decisions to be made when you are enrolled for Medicare, and many stipulations in your Medicare D coverage which may need further explanation. The team at Anderson & Associates Insurance Group is always happy to explain your options, walk you through how each plan works, and help you decide which coverage option is right for you.
