Want to learn more about Medicare Part D prescription drug program? We are going to start a series on Part D program. Know the ins and outs. Today we are going to learn about Types of Pland D, eligibility, and alternatives.
Medicare Part D Prescription Drug Coverage
Coverage of Medicare Part D benefits is provided by private companies.
Medicare pays a share of the program costs.
- The types of Part D plans are:
- Stand-alone Prescription Drug Plans (PDP)
- Medicare Advantage-Prescription Drug (MA-PD) Plans:
- MA health plans that also cover Part D prescription drugs.
- Cost-PD Plans
- Medicare health plans that cover Part D prescription drugs as an optional supplemental benefit.
Beneficiaries enrolled in a —
- Medicare Advantage HMO or PPO may only obtain Part D benefits through their plan. They may not enroll in a standalone PDP. (Employer group plan enrollees may have additional choices.)
- MA MSA may only obtain Part D benefits through a standalone PDP.
- MA PFFS plan that offers Part D coverage may only obtain Part D benefits through that plan. If the PFFS plan does not offer Part D coverage, the beneficiary may enroll in a standalone PDP.
- Cost plan may obtain Part D benefit through their plan (if offered) or through a standalone PDP.
- Medicare-Medicaid plan may only receive Part D benefits through that plan.
- PACE plan may only receive Part D benefits through that plan
Medicare Part D: Eligibility
Individuals entitled to Part A andor enrolled under Part B are eligible to enroll in Part D plans.
- The beneficiary must live in the plan’s service area.
- Part D plan coverage is provided through network pharmacies in the Part D plan’s service area, except that PFFS plans are not required to use a pharmacy network.
- Part D plans must enroll any eligible beneficiary who applies regardless of health status except in limited circumstances in the case of MA-PD plans under MA program rules (e.g., beneficiaries with ESRD or who do not meet the eligibility criteria of a chronic care SNP).
Part D Standard and Alternative Benefits
- Part D plans must cover at least the Part D standard benefit or its actuarial equivalent.
- For 2017, the standard benefit requires the beneficiary to pay:
- $400 deductible
- 25% of prescription drug costs between $400 and $3700 = $825
- Part of the costs in the “Coverage Gap” – After total spending on drugs by the beneficiary, by certain subsidy programs and by the plan, reaches $3700 the beneficiary pays for 51% of generic drug costs and 40% of brand name drug undiscounted costs (drug manufacturers provide a 50% discount on brand name drugs).
- The amount beneficiaries pay while in the coverage gap decreases by a small percentage each year until 2020 when they will be responsible for only 25% of brand and generic drug costs.
- Nominal costs under catastrophic coverage: Once beneficiary expenditures (including drug manufacturer discounts) reach a total of $4,950, the beneficiary is through the coverage gap and reaches catastrophic coverage. On any future prescriptions the beneficiary pays either a co-pay of $3.30 for generic drugs or $8.25 for brand name drugs or a co-insurance of 5%,
Part D Plan Benefits: Alternative
- Part D plan benefits may differ from the standard benefit under specific Medicare rules.
- In all cases the value of Part D benefits must be at least the same as the standard coverage.
- Some Part D plans may also include enhanced coverage for an additional monthly premium.
Part D Pharmacy Networks
- Enrollees may fill prescriptions for covered drugs at network pharmacies that contract with plans.
- Network pharmacies include retail pharmacies and may also include mail order pharmacies. Part D plans may designate preferred pharmacies that offer lower levels of cost-sharing than apply at non-preferred pharmacies.
- Under certain circumstances, enrollees may fill prescriptions for covered drugs at non-network pharmacies, but likely at higher cost to enrollees. For example:
- If the enrollee has an illness or loses a drug while travelling outside the service area.
- If there are circumstances resulting in limited access to a drug through in-network pharmacies