Medicare Part D provides enhanced drug coverage to go with the coverage provided with Medicare Part A and Part B. Part D plans are offered through private insurance companies that Medicare has approved and typically have higher degrees of coverage and a lower limit on out-of-pocket expenses.
If you have Medicare Part A and Part B coverage, you're eligible for Part D regardless of income or health status. The other requirement is that you must live in the service area of the Part D plan in which you want to enroll. If you enroll in a Part C Medicare Advantage Plan, drug coverage is usually included as part of the policy.
You can enroll in Part D through a Medicare-approved private insurance company during your Initial Enrollment Period (IEP), the Annual Election Period (AEP) from October 15 to December 7, and immediately following the General Enrollment Period (GEP) between April 1 to June 30. You can also enroll if you qualify for the Extra Help program.
Costs vary from plan to plan based on the various types of coverage different providers offer. You'll pay a monthly premium and a yearly deductible as well as some copayments or coinsurance after meeting your annual deductible. You will have a cap on your annual out-of-pocket expenses and after you reach this amount catastrophic coverage kicks in, meaning you'll only have a small copayment or coinsurance for the balance of the year.
As you can imagine, the world of prescription drugs is dynamic, and it is not uncommon for Part D plan changes to take place frequently. That might be due to the Food and Drug Administration (FDA) deeming a drug unsafe or if a manufacturer removes one or more drugs from the market.
Plans meeting certain requirements can also immediately remove brand name drugs from their formularies and replace them with new generic drugs or change the cost or coverage rules for brand name drugs when adding new generic drugs. Mail order costs and procedures sometimes change as well. If you're taking any of these drugs, you'll receive information about the changes.
If changes involving a drug you're currently taking affect you during the year, your plan must give you written notice at least 30 days before the date the change becomes effective, or when you request a refill, they must provide written notice of the change and at least a month's supply under the same plan rules as before the change.
Each plan has a formulary, which is a list of drugs covered under the plan. Plan providers review this formulary each year and update it to reflect new drugs coming to market, removing others that are no longer viable or cost-effective, or replacing some drugs with generic versions to save the provider and the participant money.
Formularies also contain tiers with various drugs placed in each tier. That impacts cost, and drugs may move from one tier to another. Medications in a lower tier typically have minimal or no copays and often include generic drugs. Conversely, the higher a tier you're looking at for your medications, the greater your out-of-pocket costs will be.
Generic drugs are copies of brand-name drugs and are the same as those brand-name drugs in:
The formulary might not include your specific drug, but a similar drug should be available most of the time.
Based on these changes, you may see changes in coverage and costs which means what worked best for you this year may not be the plan for you next year.
As you get older, your life needs can change, and that might mean you'll change your Medicare coverage to reflect what's happening as well.
For example, you may move to a nursing home, develop a chronic illness, or your doctor may no longer accept your current plan. You could also start taking new medications or begin seeing a specialist that would change your drug needs.
If you like your current Part D drug plan, you can stay with it in the following year, which begins on January 1. You don't have to enroll again or let the plan know that you're staying with that coverage.
Before you can decide this, you'll need to gather some information. In September, you'll receive the Annual Notice of Change letter. Medicare requires plans to send this letter to all their enrollees. It's usually posted on the plan website as well.
It informs you of any changes the plan will make for next year, including costs, benefits, service areas, and what pharmacies can dispense drugs under this plan.
With this information in hand, you can compare your current plan with others offered in your area for the coming year. It's best to work with an agent who can help you enter all your current medications into the system and review best plans for your current situation. This comparison occurs during the annual open enrollment period running from October 15 to December 7.
You can also use the online plan-finder program on Medicare's website or call Medicare at 800-633-4227 and ask a customer service representative to search for you.
After the review and if you want to switch to another Part D plan, you can work with your agent, enroll online on Medicare's plan-finder website, call Medicare, or call the plan.
Signing up with a new plan automatically cancels your coverage from the old one, and your new coverage will begin on January 1.
Some circumstances may entitle you to a special enrollment period (SEP) when you can change your Part D plan. These include:
You move to an area where your current Part D plan isn't available. If you notify your current plan before you move, your SEP begins the month before you move and ends two full months after you move. If you notify the plan after you move, your SEP begins the month you notify your plan and ends a full two months after that notification.
If you move to an area where your current plan is still available, but you now have new Part D plan options. Your SEP period remains the same if you move to a place where your current plan isn't available.
If you currently live in a skilled nursing or long-term care facility, or you move in or out of one. Your special enrollment period lasts as long as you live in the facility and two full months after you move out.
If your plan changes its contract with Medicare. Medicare will determine your SEP on a case-by-case basis.
DISCLAIMER: Medi-Solutions Insurance Agency, LLC is not affiliated or endorsed with the Social Security Administration or the Federal Medicare Program. Information is for educational purposes only and should not be construed as an offer of insurance, advice, or recommendation. The information provided is not intended as tax, financial, investment, or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.