One of the most confusing aspects to Medicare is the Part D Prescription Drug Plan (PDP). The reason for the confusion is that the government designed the benefit and then turned the model over to private insurance companies for implementation.
Typically you will have a choice between 25 to 30 different plans; all with different premiums, co-pays and formularies. How are you to know which one is best for you?
Understanding the Medicare Part D Drug Plan
The key to understanding and finding the right drug plan is to know your own list of personal medications. You need to look at YOUR medications and how each company rates them on their formulary. The Medicare website (www.Medicare.gov) has an excellent tool available to you for analysis. You simply enter your drug names and pick your pharmacy and the online tool will rate the plan for you by cost.
While this sounds pretty straight forward and easy to do, it’s a little more complicated that that actually. Many companies have preferred pharmacies where the copay is lower. At Imagine Insurance Advisors, annually we certify with each company so that we understand their plans, formularies and preferred pharmacies. Often times we are able to save clients significant money by suggesting a pharmacy change.
The “Donut Hole” Explained
No, the donut hole is not a breakfast special for seniors! The donut hole begins when the cost of your medications (not what you have paid but what the drug actually costs) reaches $3,700 (2017). Once you reach the donut hole, you will pay 40% (2017) of the cost of brand drugs and 51% (2017) of the cost of generic drugs.
You will spend less each year in the donut hole as it is being phased out by the year 2020. For most people, when they get to the donut hole their drug costs go up. The donut hole ends when you reach the catastrophic level. This means you have paid $4,950 (2017) out of your pocket for medications. This does includes what was paid on your behalf while in the donut hole.
Late Enrollment Penalty
While the government does not require you to have a prescription drug plan, they have instituted a penalty for those who do not sign up for one when they are eligible. If you do not have credible coverage (Group, VA, Individual) you will incur a 1% per month penalty for each month you go without drug coverage. Currently this is $.35/month (2017). Additionally, the only time you can pick up coverage is during the annual enrollment period unless you have a life event qualifying you for a Special Enrollment Period (SEP).
Assistance for People with Limited Financial Resources
Low income individuals can apply with social security for help with their prescription drugs. You can call social security at 1-800-772-1213 or apply online at www.ssa.gov. At the best levels, you will have no premium, reduced copay, and no donut hole.
Trust the Experienced Experts at Imagine Insurance Advisors to Guide You
Imagine Insurance Advisors can not only help you apply for extra help but can help you reevaluate your drug coverage each year. The only time to change your plan each year is during the Annual Enrollment Period (from October 15 to December 7).
Plans change every year and we highly recommend you check your plan at least every other year. We are here to help. Unlike most insurance agents, we fully understand the drug coverage and the intricacies of it. Contact us today and we will assist you in evaluating your coverage. There is no charge for our review and guidance services.