Prescription Drug Plans

What are Prescription Drug Plans? 

Prescription drug plans are also known as “Part D.” These plans help clients with the cost of prescription drugs, and they are only offered through private insurance companies. Your clients must also continue to pay their “Part B” premium. The cost of prescriptions varies from plan to plan, and benefits can also change each year, so it is important to be aware of these changes for your client. Each plan will have a list of drugs that are covered. Before you enroll your clients into a plan, it is important to make sure their drugs are covered on the plan. You can go to https://www.medicare.gov/ to check each plan. Please note that the list of drugs can also change each year. Additionally, enrollment penalties may apply for your client if you enroll them late.

2 Ways to Get Drug Coverage

  1. Medicare Prescription Drug Plan (Part D). These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.

  2. Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) coverage, Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D) through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have “Part A” and “Part B” to join a Medicare Advantage Plan.

If your clients’ plans have a deductible, your clients pay the total cost of their drugs until they reach the deductible amount set by their plan. Then, they move to the initial coverage stage, which covers up to $2,960. After the initial coverage stage, the client moves into the coverage gap, also known as the “donut hole,” which covers up to $4,700. After your client passes the “donut hole,” there will be catastrophic coverage, which is throughout the end of the year. Note: In January of each year, the coverage cycle starts over and the dollar limits can change. The amounts listed above reflect the 2015 plan year.

Each Medicare prescription drug plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different “tiers” on their formularies. Drugs in each tier have a different cost.

A drug in a lower tier will generally cost less than a drug in a higher tier. In some cases, if a drug is on a higher tier and your prescriber thinks you need that drug instead of a similar drug on a lower tier, you or your prescriber can ask your plan for an exception to get a lower copayment.A Medicare drug plan can make some changes to its formulary during the year within guidelines set by Medicare. If the change involves a drug you’re currently taking, your plan must do one of these:

  • Provide written notice to you at least 60 days prior to the date the change becomes effective.
  • At the time you request a refill, provide written notice of the change and a 60-day supply of the drug under the same plan rules as before the change.

A formulary is a list of drugs that an insurance plan covers. Many drug plans have a tiered formulary, which means the plan divides drugs into groups called “tiers.” Generally, the lower the tier, the lower your copay. fromulary

Each plan will accept different pharmacies. You will need to check https://www.medicare.gov/ to make sure that the plan and the pharmacy your client uses match up.