Medicare Part D RX Insurance

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Medicare Part D RX Information

What is Medicare Part D?

Medicare Part D is prescription drug coverage that is available to Medicare beneficiaries. It came about as part of the Medicare Modernization Act of 2003. The drug benefit is a benefit of Medicare, but it is a separate program and it was not part of the original Medicare program. The original Medicare program includes Part A for hospital care, Part B for physician care, outpatient care and durable medical equipment. There are two types of plans under Medicare Part D. The amount of prescription drug coverage available through both types of plans is similar.

1. Prescription Drug Plan sponsors (PDPs) — These plans provide drug coverage only.

2. Medicare Advantage Prescription Drug Plans (MA-PDs) — These plans offer benefits and services that Original Medicare does not. When you choose a Medicare Advantage plan, you’re still a part of Medicare, yet your plan provides all of your Medicare Part A hospital coverage (except hospice coverage which is still covered by Original Medicare) and Medicare Part B medical coverage. If you purchase a MA-PD plan, the prescription drug coverage is included. If you purchase only a MA plan, then prescription drug coverage is not included.

The benefit is administered by private insurance plans that are reimbursed by the Center for Medicare and Medicaid Services (CMS).

Assistance for those with limited resources

People with limited income and resources may be able to receive extra help with Prescription Drug Plan costs. This assistance includes lower premiums, deductibles and copayments. Beneficiaries interested in available Medicare Part D subsidies may contact Medicare at 1-800-MEDICARE (1-800-633-4227). TTY/TDD users call 1-877-486-2048 24 hours a day/7 days a week. They can also call their State Medicaid office or call the Social Security Administration at 1-800-772-1213 (TTY/TDD number: 1-800-325-0778) 7 a.m. - 7 p.m., Monday through Friday.

If you qualify for additional assistance with your Medicare Prescription Drug Plan costs, the amount of your premium and cost at the pharmacy will be less.

What is the late enrollment penalty?

Enrollment in Medicare's prescription drug coverage is your choice. If you already have prescription drug coverage and you are comfortable with those benefits, you may choose not to enroll in a Medicare Prescription Drug Plan. However, if you decide not to enroll in a Medicare Prescription Drug Plan during your initial enrollment period, you may be subject to a late enrollment penalty when you do enroll.

This penalty was designed to encourage people to sign up for coverage at the youngest possible age, which helps keep overall costs of the drug program more affordable. It is similar to the late enrollment penalty for Medicare Part B.
The late penalty is currently 1% of the national average monthly premium for each month you were eligible but were not enrolled in a Medicare Prescription Drug Plan. The penalty will be added to your premium for as long as you are enrolled in Medicare's prescription drug coverage. You must continue to pay your Medicare Part B premium if not otherwise paid for under Medicaid or by another third party.

In some instances, people can delay enrollment in Medicare's prescription drug coverage without paying a penalty. For example, you may have creditable coverage as an individual or through an employer group policy. Creditable coverage is a drug benefit of equal or greater value than Medicare's standard prescription drug coverage. If you have creditable coverage, your current insurer should send you information about your options, and you may choose not to enroll in a Medicare Prescription Drug Plan. A late penalty will not apply as long as you have creditable coverage.

What are the Medicare Part D Benefits?

1. What is the standard Medicare Part D benefit required by the federal government?
Plan sponsors offering Medicare Prescription Drug Coverage must provide the government's standard prescription drug coverage or its equivalent, at a minimum. They are also able to offer more comprehensive or "enhanced" coverage as a second plan offering.

2. The Standard Benefit designed by the Federal Government:

o A monthly premium.

o Annual deductible of $320.(2012)

o Coinsurance of 25 percent up to an initial coverage limit of $2,930 (2012)

3. Coverage Gap (donut hole):begins once you reach your Medicare Part D plan’s initial coverage limit ($2,930 in 2012) and ends when you spend a total of $4,700 in 2012.

In 2012, Part D enrollees will continue receive a 50% discount on the total cost of their brand-name drugs while in the donut hole. The full retail cost of the drugs will still apply to getting out of the donut hole even though 50% was paid for by the pharmaceutical manufacturers. Enrollees will pay a maximum of 86% co-pay on generic drugs while in the coverage gap.

4. Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**:
greater of 5% or $2.60 for generic or preferred drug that is a multi-source drug and the greater of 5% or $6.50 for all other drugs in 2012

Medicare Website

Government website with information and answers to questions about choosing Part D prescription drug coverage: www.medicare.gov

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