Understanding Medicare Part D drug plans in 2023
If you are on Medicare or going to be in 2023, you need to understand Medicare Part D drug plans and how they work. You also need to understand how to get your Part D plan and what your options are. This knowledge can save you a lot of money during the year by having the plan that best fits your needs. If you do not buy a Medicare Part D when you are eligible you may have to pay a penalty, and may not be able to get Medicare Part D until open enrollment from October 15 to December 7. It will not take effect until January 1 the following year.
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There are two types of medications.
- Professionally administered. Drugs administered in the hospital or at the doctor’s office such as vaccines are covered. These drugs come under Part A and Part B.
- Self-administered. These are drugs prescribed to you that you purchase and take yourself, such as cholesterol and hypertension medications. They are covered under Part D.
There are two ways to get coverage for Part D.
- There is a stand-alone Part D drug plan. If you are only going to have Part A and Part B of Medicare or going to buy a Medigap Plan, you need to buy a stand-alone Part D plan.
- You can go on a Medicare Part C Advantage Plan that includes a Part D plan.
A formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. It is also called a drug list. A formulary does not need to cover all drugs but does include at least 2 drugs in the most commonly prescribed categories and classes. Some plans have “preferred pharmacies” that will give you a lower cost for the drug.
Formularies do have some rules which are:
- PA (Prior Authorization) to receive your drug with a PA your provider needs to show it is medically necessary.
- QL (Quantity Limited) the plan may only cover a certain amount for a period of time like 30 days.
- ST (Step Therapy) you may have to try a less expensive drug for your condition before moving up to a more costly drug.
- FE (Formulary Exception) if your doctor believes you must take a drug not listed on your formulary, the doctor can ask for a “Formulary Exception) for just your formulary.
- Plans are only good for one year. They can change each year. If you have an FE it will end at the end of the year.
Tiers: There are typically 5 tiers, the lower the tier number the lower the copay.
- Tier 1: Preferred Generic
- Tier 2: Generic
- Tier 3: Preferred Brand
- Tier 4: Non-Preferred Drug
- Tier 5: Specialty drugs
There are four stages to Medicare Part D drug Plans.
- Deductible: $0 to $505
- Initial coverage: You pay according to the drug tier coverage. Once you and the company have paid $4,660 you move to the next stage.
- Coverage Gap: the member pays 25 % of brand and generic. (Some plans have exceptions for generic drugs).
- Catastrophic Coverage: the member pays $44.15 for generic and $10.55 for all other drugs or you may pay a percentage of the cost of the drug.
The Medicare Part D drug plan is very important to have, to understand and review each year. You should make a list of your drug’s names, frequency of use, and dosage to compare plans. Welch Insurance retains our clients drug list so that each year we can compare your plans.
It is always best to keep updated for changes to Medicare Insurance Plans. Visit our Medicare Overview Page. Get Online quotes for 2023 at Medicare insurance Plans. Or set a no-obligation phone appointment.