Prescription Drug Plans
What prescription drug plans are available?
Prescription Drug Plans are stand alone insurance products available through private insurance companies. They were made available through an act of congress in 2005 and became affective in 2006. They provide a means to reduce prescriptions costs and establish predictable. You can obtain Part D prescriptions Drug coverage in two ways. Some people will have a stand-alone drug plan to cover prescriptions, while having Original Medicare cover medical expenses. Many will also pair that type of coverage with a Medicare Supplement Plan. Others will get their prescriptions drug coverage (Part D) through their Medicare Advantage Plan (Part C). In most cases (particularly with plans available in Washington State) you can not add a stand-alone prescriptions drug plan to your Medicare Advantage plan, whether or not that that plan includes embedded coverage for Part D. Enrolling into a Part D plan, while already enrolled in Part C will automatically cancel your Medicare Advantage plan and may make reenrolling back into a Medicare Advantage plan in a timely fashion difficult.
How do prescription drug plans work?
All Prescription Drug Plans, whether a stand alone PDP or an embedded benefit contained in most Medicare Part C (Medicare Advantage) plans must follow minimum standards of coverage. This includes four stages of coverage show in the chart below.
Be aware that this optional coverage is still technically required. All Medicare Beneficiaries must have creditable prescription drug coverage once they are eligible for such coverage, or potentially face a permanent late enrollment penalty. An additional page explaining the late enrollment penalty will be coming soon, but for details, please contact us. Here is a video that partially explains the basic information related to this potential penalty.
What do prescription drug plans cover?
Prescription Drug Plans vary in coverage depending on the plan, so be sure to contact us for specific pricing. We may also help evaluate whether a stand-only plan is more appropriate than a Medicare Advantage plan for your specific situation. No prescription drug plans will cover over the counter drugs or some drugs requiring special handling that are administered by Medical professionals (which are billed under Medicare Part B). It is advised for people to review drugs that they currently take to verify coverage in prospective plans. A vast majority of prescription drugs prescribed are common and widely used. Most plans tend to cover the most common prescriptions.
| Annual Deductible | Initial Coverage | Coverage Gap* (Donut Hole) | Catastrophic Coverage |
|---|---|---|---|
| In this drug payment stage: | In this drug payment stage: | After your total drug costs reach $4,430: | After your total drug costs reach $7,050: |
| You pay for your drugs until you reach the deductible amount set by your plan (up to $480). Not all Part D plans have a deductible; if your plan does not have a deductible, your coverage starts with the first prescription you fill. | You pay a copay or coinsurance and the plan pays the rest. You stay in this stage until your total drug costs reach $4,430 in 2022. | In 2022, you pay: 25% of the cost for brand name drugs; 25% of the costs for generic drugs. You stay in this stage until your total out-of-pocket costs reach $7,050 in 2022. | You pay a small copay or coinsurance amount. You stay in this stage for the rest of the plan year. |
*If you get extra help from Medicare on your Part D costs, the Part D deductible and coverage gap do not apply to you.
*While in the Donut Hole, 70% of Name-Brand drug costs are covered through mandatory discounts from the drug manufactures (this does not apply to generic drugs). 5% of the costs are covered by the plan. The remaining 25% is your costs. The out of pocket costs include all deductibles, all co-pays, all co-insurance AND credit from the 70% discounts that are applied during the Coverage Gap. If you take Name-Brand drugs, your actually money spent will be considerably less than the $6550 due to how your costs are credited. This rule apply regardless of how you receive your Part D coverage.
## There are some carriers participating in a voluntary program regarding the $35 max co-pay in all stages for Insulin. Not all insurance carriers are participating in this program. Not all plans offered by those that do will have this program apply. With some carriers, special rules may apply as well. Please ask us to clarify this for you, if you take insulin. The $35 insulin program is great news for diabetics, but caution must be taken to select the appropriate plan. You wouldn't want to assume YOUR plan will be included and find out after it's too late to make changes. WE will provide you FREE consultations and plan reviews.