A Dependable Resource for Medicare Part D Problems
When Congress passed a new prescription drug benefit under the Medicare program several years ago, it was easy to see that many people would encounter problems in getting the most out of the new benefits or have difficulty covering payments for prescriptions under the so-called "doughnut hole" or Medigap — once your Medicare Part D drug benefits hit a certain level ($2,610 in 2008) you are responsible for the full cost of the drugs until your total out-of-pocket expenditures reach $4,050. Then the benefits resume.
People may run into problems with the Medicare Part D benefits and have questions such as: How do I choose a plan? How will I pay for my medications during the doughnut hole months? I'm below the federal poverty level — will I face a Medigap as well?
Contact a knowledgeable elder care lawyer at the Law Office of Margaret H. Kreiner for dependable advice about getting the most out of Medicare Part D. Because our practice focuses exclusively on elder law, estate planning and other legal issues of particular interest to older people, we make a point to stay current with the latest developments with Medicare Part D.
We also listen to our clients' questions and go to work to clear up any of their confusion. We speak to senior groups in the Akron area about Medicare, Medicaid and other health care issues to help make sure that people have the information they need before they make important decisions about their prescription drug coverage.
Since Medicare Part D went into effect in January 2006, our lawyers have developed considerable knowledge about the workings of the new drug benefit. We can help you choose an insurance plan that is right for you. We can assist with planning for the part of the year when you will not receive Medicare support for your prescription drugs. If you are eligible for Medicaid, we can advise you on the additional benefits you might have under Medicare Part D. If you anticipate the need to enroll under Medicare Part D in the coming years for yourself or a parent, we can provide you with some basic information that will help you select a Medicare Part D plan.
For additional information about Medicare drug benefits and other long term care issues, contact an experienced Ohio elder law attorney at the Law Office of Margaret H. Kreiner in Akron.
Medicare Part D
Medicare Part D is the Medicare prescription drug program (PDP).
Your Cost
Persons enrolled in Medicare Part D must pay a monthly premium in addition to the Part B premium unless they are eligible for assistance. The premium varies in different regions of the country. The premium is likely to change on a yearly basis as well.
There is an annual $275.00 deductible which must be met before coverage begins. After the deductible has been met, beneficiaries will be responsible for a 25% co-pay of their covered prescription costs until they reach an initial coverage limit of $2510.00. When the beneficiary reaches this limit of $2510.00, he or she has a gap in coverage until reaching the total annual out-of-pocket expense of $4050.00. This gap in coverage is called the “doughnut hole.” During this gap in coverage or “doughnut hole,” the beneficiary must still pay the monthly premium amount and must pay for their prescriptions until they reach the $4050.00. After the beneficiary has reached the $4050.00 total annual out of pocket expense, the beneficiary will pay approximately $2 for generic drugs and approximately $5 for non-preferred drugs or a 5% co-insurance amount, which ever is greater.
Various insurance companies will offer Medicare Prescription Plans (PDPs). These companies can offer a plan that is “actuarially equivalent” to the standard Medicare Part D benefit package. For example, a PDP may create a plan that allows for tiers of coverage rather than the 25% co-pay discussed above. A tiered plan may call for a beneficiary to pay different amounts for generic, brand name, and preferred brand name drugs instead of the 25% co-pay on all covered prescription drugs.
Only the cost of drugs included in the plan formulary will count toward the beneficiary’s deductible and out-of-pocket expenses. The federal government does not provide a list of drugs that must be included in plan formularies. If someone wants to get coverage for a drug not listed in the plan formulary, the person must apply for an “exception.” The exception process is burdensome.
Enrollment period
Enrollment is voluntary, but everyone must enroll to receive coverage, including those who are eligible for limited income assistance.
A beneficiary who does not enroll within 63 days of his or her initial enrollment period and has no creditable coverage must pay a late penalty if he subsequently enrolls in Medicare Part D unless he or she can show he or she had creditable drug coverage under another drug plan or meet other accepted criteria.
Formulary
A formulary is a list of prescription medications for which the plan will provide coverage. Medicare Part D does not offer coverage for over-the-counter drugs and some other drugs.
Often times, the drugs listed in the formulary are listed in two or more groups. The difference between the lists is the amount that the beneficiary has to pay. The amount that the beneficiary must pay is called the co-pay. A typical formulary may include the following groups or tiers:
Group Drugs Co-pay size
Level 1 Generic drugs $
Level 2 Preferred drugs $$
Level 3 Non-preferred drugs $$$
The more dollar signs, the higher the co-pay amount.
Creditable coverage
If a person already has coverage for prescription drugs and it is considered to be actuarially equivalent to the Medicare Prescription Drug plans, the coverage is considered to be “creditable.” If a person has creditable coverage, he or she may choose to keep this plan rather than sign up for a Medicare Part D plan without penalty. If later the person loses coverage through the plan, he or she will have a special enrollment period to enroll in Medicare Part D without a penalty in premium. The person also can enroll in Medicare Part D while he or she still has creditable coverage and not pay a premium penalty. However, if the creditable coverage ends and the person fails to enroll during the special enrollment period, he or she will be subject to the premium penalty.
If the person’s current prescription drug plan is not creditable and the person does not sign up for Medicare Part D prior to the open enrollment period and he or she later signs up for Medicare Part D, he or she will have a premium penalty.
Terminology
Co-pay or co-payment – A fixed fee that subscribers to a medical plan must pay for their use of specific medical services covered by the plan.
Deductible – This is an amount contained in a clause of an insurance policy that relieves the insurance company or Medicare for an initial loss of the kind insured against. This amount is the responsibility of the person covered under the policy.
Federal Poverty Level – These are poverty guidelines issued each year by the Department of Health and Human Services. They are used for administrative purposes including determination of financial eligibility for certain federal programs.
Formulary – This is a list of prescription medications for which a plan will provide coverage.
Medigap Policy – This is health insurance that pays for some of your costs in the original Medicare Program and for some care which it does not cover. If you are covered by a Medicare + Choice Plan, you don’t need a Medigap policy.
Medicaid – This is a program that pays for medical assistance for certain persons and families with low incomes and resources. This program is jointly funded by federal and state governments. The program includes medical long-term care assistance and assistance to low-income pregnant women and poor children.
Medicare – Medicare is the national health insurance program for:
- Persons age 65 and older;
- Some persons under age 65 with disabilities; and
- Persons with end stage renal disease (ESRD) which is permanent kidney failure and requires either dialysis or kidney transplantation.
Medicare Part A – This is the Medicare program that pays for hospital and related services. It also covers limited stays in nursing homes, home health care, hospice care, inpatient psychiatric care, and blood transfusions. It does not pay for assisted living facilities, but may cover the costs of some services such as home health care and doctor visits.
Medicare Part B – This is the Medicare program that pays for some outpatient hospital and mental health services, doctor services (not routine physical exams, but many preventive screenings), laboratory fees, and medical equipment.
Medicare Part D – This is a Medicare plan which provides coverage for prescription drugs for eligible persons. This program begins January 1, 2006.
