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Does Medicare Have Coverage for Prescription Drugs?

Prescription drugs are covered under Part D of Medicare. People who have Medicare Part A or Part B are eligible for Medicare prescription drug coverage. They can enroll in any of the Part D plans that serve the area where they live.

The annual election period for Part D is from November 15 to December 31, 2010.  In 2011, and subsequent years, this annual election period will take place from October 15 through December 7.  During that time period anyone with Medicare can enroll in a plan or change from one plan to another. There are some important things to keep in mind when it comes to prescription drug coverage:

• It is very complex, can be confusing and is changing on a regular basis. You will have to make decisions to get the plan that is right for you and covers the drugs you need.
• You can get help making decisions through local resources and/or your Medicare Advantage Plan (such as an HMO or  PPO).
• You do not have to purchase Part D coverage. That decision will not affect the other coverage you have. It is important to note that you should enroll in a prescription drug plan when you are eligible. If you choose to enroll later, you will have to pay a higher premium for a Part D plan, unless you can show Medicare that you had drug coverage at least as good as theirs during the time you were not enrolled in Part D. This is known as “creditable coverage.”
• When choosing a Medicare Part D plan, ask good questions and do your homework. You can also visit our section on Drug Coverage.
  

Things you should ask:

• Can I buy Part D drug coverage without having my Medicare replaced by an HMO product or Medicare Advantage Plan?
• If I buy into the Medicare Advantage Plan that includes Part D coverage, will I be restricted on who I can go to for service?
  

How Can I Delay Reaching the Coverage Gap?

There are a number of things you can do to help reduce your drug costs, they include:

• Switching to lower cost drugs: Talk to your doctor about using generic and/or over-the-counter (OTC) drugs. Many work as well as the higher cost prescriptions. It can help you save hundreds of dollars a year and can be just enough to keep you out of the coverage gap.
• Take advantage of mail-order programs: They can save you many dollars a year on medication used long-term (90 days or longer).
• Always use your Medicare drug plan card. When you use your card, you get discounted rates on the drugs you buy and any money spent on drugs is automatically counted automatically toward your deductible.
• Look for programs that offer assistance: The National Patient Advocate Foundation or the National Organization for Rare Disorders may have programs that can help with your drug costs. Comprehensive information on federal, state and private assistance programs in your area is available at www.benefitscheckup.org.

Is There Help for People Who Have a Low Income?

If you have low income you may have been automatically enrolled in a program (this may vary state to state). If you have not been automatically enrolled in a program, you may still qualify for it. If you qualify, you will get help paying for your Medicare drug plan's monthly premium, deductible, and copayments. The amount of extra help you get is based on your income and resources.

You will automatically qualify for help if you meet one of the following criteria:

• You get full coverage from a state Medicaid program.
• You get help from Medicaid paying your Medicare Part B premiums (a Medicare savings program).
• You get Supplemental Security Income (SSI) benefits.

If you don't join a Medicare drug plan yourself, Medicare will enroll you in a plan so that you get help paying for your prescription drugs. However, if you have certain retiree drug coverage from a former employer or union, then Medicare will not automatically enroll you in a plan. If Medicare enrolls you, they will send you a letter letting you know when your coverage begins.

What Does Part D Cost?

Exact costs are different for each plan, depending on your coverage. Your actual drug plan costs will vary depending on the prescriptions you use, the plan you choose, whether you go to a pharmacy in your plan’s network, whether your drugs are on your plan's formulary (drug list), and whether you get Extra Help paying your Part D costs. Most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you belong to a Medicare Advantage Plan (like an HMO or PPO) or a Medicare Cost Plan that includes Medicare prescription drug coverage, the monthly premium you pay to your plan may include an amount for prescription drug coverage.

In addition to your monthly premium your costs for Part D coverage are:

• An initial deductible - The amount you must pay before your drug plan begins to pay its share of your covered drugs. Some drug plans don’t have a deductible.
• Copayments or coinsurance - Amounts you pay at the pharmacy for your covered prescriptions after the deductible (if the plan has one). You pay your share, and your drug plan pays its share for covered drugs.

After you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of- pocket for your prescriptions up to a yearly limit. Not everyone will reach the coverage gap. Your yearly deductible, your coinsurance or copayments, and what you pay in the coverage gap all count toward this out-of-pocket limit. The limit doesn’t include the drug plan premium you pay or what you pay for drugs that aren’t covered. There are plans that offer some coverage during the gap, like for generic drugs. However, plans with gap coverage may charge a higher monthly premium. Check with the drug plan first to see if your drugs would be covered during the gap. For more information, visit http://go.usa.gov/loF to view the fact sheet “Bridging the Coverage Gap.” You can also call 1-800-MEDICARE (1-800-633-4227) to see if a copy can be mailed to you. TTY users should call 1-877-486-2048.

Once you reach your plan’s out-of-pocket limit, you automatically get “catastrophic coverage.” Catastrophic coverage assures that once you have spent up to your plan’s out-of-pocket limit for covered drugs, you only pay a small coinsurance amount or copayment for the drug for the rest of the year.

If you reach the coverage gap in 2010, (and you aren’t already getting Extra Help), you will get a one-time $250 rebate check to help you with your drug costs. For more information, visit http://go.usa.gov/3Zq to view the publication, “Closing the Prescription Drug Coverage Gap.”

If you reach the coverage gap in 2011, you will get a 50% discount on covered brand-name prescription drugs at the time you buy them. There will be additional savings for you in the coverage gap each year through 2020 when you will have full coverage in the gap. Talk to your doctor or other health care provider to make sure that you’re taking the lowest cost drug available that works for you.

What Kinds of Things Should I Consider When Choosing a Plan?

When reviewing prescription drug information, consider how much the plan will cost. There are a number of factors to look at when it comes to costs:

• Premium: This is the monthly cost you will pay once you have signed up with the plan. Premiums vary by plan.
• Deductible: This is the amount you pay for your prescriptions before your plan starts to share in the costs. Deductibles vary by plans. Some plans do not have deductibles.
• Copayment/Coinsurance: This is the amount you pay each time you buy a prescription. This can vary from plan to plan. For example, in some plans you pay the same amount for any prescription while other costs will depend on the name of drug and whether or not the drug is a generic or brand name. Also, in some plans your share of the cost may go up when you pass an annual spending limit for drugs.