What you need to know about Medicare Part D- Understanding Drug Coverage

What is Medicare Part D?


Medicare Part D is drug coverage available to people enrolled in Medicare Part A and or enrolled in Part B. Prescription plans are offered by private insurance companies and not by Medicare. Each drug plan will have its own premium, deductible, co-pays, formulary and network of pharmacies.      Part D is separate from your Supplement coverage (also known as Medigap) plan. There are Medicare Advantage plans that include prescription coverage. If your Medicare Advantage plan includes prescription coverage then you will not need to enroll in a stand alone drug plan.

Lets review the four stages of a drug plan.

The Four Stages of Part D

Stage 1 -Annual Deductible

You pay the full cost of your prescription until your spending adds up to the amount of your deductible. Some plans have a $o deductible so depending on the tier of the drug, you will have a set co-pay or be responsible to pay a percentage for the drug. Some drug plans waive the deductible for tier 1 and tier 2 prescriptions. For example, your drug plan might have a $435 deductible but the only prescription you take is metformin which falls as a tier 1 drug on the plans formulary.  Formulary is a list of your plans covered drugs. This means you will not be responsible to meet your deductible for metformin.

Stage 2- Initial Coverage

After you meet your deductible, your plan will help pay the cost of your drugs. You will be responsible to pay either a co-pay or co-insurance depending on the drug. You will be in the initial coverage period until the total cost of your drugs reaches $4,020. This includes the amount you and your plan have paid for your covered drugs.

Stage 3- Coverage Gap

After your total drug costs, reaches $4,020, you enter the coverage gap, also known as the “donut hole”. When you enter the donut hole, you will be responsible for 25% of the cost of your drugs. You will be in the gap until your total out of pocket costs reaches $6,350.

Stage 4- Catastrophic Coverage

Once your total drug cost reaches $6,350, you’re officially out of the coverage gap and your drug plan will begin paying for the majority of your drug costs. During this phase, you will pay 5% for each of your drugs or $3.60 for generic drugs and $8.95 for brand drugs (whichever is greater).

Now that we understand the phases of a drug plan, lets discuss the drug utilization rules that many of you may already be familiar with.

Drug Utilization Rules

Drug restrictions are controls that your Medicare Part D or Medicare Advantage plan can place on your prescription drugs and can include prior authorization, quantity limits and step therapy.

Prior Authorization (PA) is a requirement that your doctor must obtain from the drug plan for approval of the specific prescription. This is usually the case for very expensive medications, or highly potent and addictive prescriptions. It’s also a way for insurance companies to manage costs.

Quantity limits (QL) is a restriction on the amount or quantity of medications that is covered by your plan during a specific time. Quantity limits ensure patient safety and control health care costs. For example, your plan may only cover one tablet of lisinopril per day, so if you get a one month supply, you’ll only get 30 tablets. For riskier drugs such as opiods, some plans may only cover a weeks supply. When you’re out of a medication under a quantity limit and you need more, you will need to ask your doctor for a new prescription. Note- not all drug have quantity limits. Some examples of drugs that have quantity limits are drugs for depression, pain, cancer, diabetes and erectile dysfunction.

Step therapy is when the plan requires patients to try less expensive drugs before getting more expensive, higher tier drugs. Before the drug plan covers certain expensive drugs,  they want to check that other more affordable drugs dont work for you first. This helps minimize costs for the insurance carrier and the patient. If you’ve already tried other alternatives with no luck, then your doctor can submit a drug exception to the drug plan.

Should I enroll in a drug plan if I don’t take prescriptions?

This is a question I get asked quite often.  Prescription coverage is just like any other insurance coverage such as an auto or home insurance policy. Hopefully you won’t need the coverage, but if you do then you’ll be happy to be covered.

If you have no credible drug coverage, such as from the VA, retiree plan, Cobra etc. and you don’t enroll in a drug plan when you are first eligible then you put yourself at risk to be penalized when you later decide to enroll in a drug plan.

Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2020) times the number of full, uncovered months you didn’t have Part D or credible coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.  For example, Mrs. Gaily went without credible drug coverage for 31 months. When she did enroll in a drug plan, she had to pay the premium for the drug plan and an additional $10.20 each month, for as long as she has drug coverage (31 % x $32.74 = $10.15 rounded to the nearest $.10 = $10.20).

The real risk is not having coverage and then suddenly needing it. You typically can only enroll in a drug plan during the open enrollment period which is from October 15 through December 7 and the plan will be effective January 1. I’ve had many clients call me in the middle of the year to apply for a drug plan due to a change of health. Unfortunately, they had to pay for the cost of the drug out of pocket because they were unable to get coverage. To read more about enrollment periods please visit https://www.bluecompassinsurance.com/what-is-part-d/ 

What I recommend to my clients is to pick the most affordable drug plan available in your area. That way you’re protected in case your situation changes and you avoid future penalties!

At Blue Compass Solutions we assist our clients with their prescription plan options. There are no fee’s for our services, EVER!

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Blue Shield Medicare Supplement Plan F Extra

So what does the Plan F “Extra” offered by Blue Shield cover? I’ve been getting a ton of questions
from clients about all the new goodies that are offered. The Medicare Supplement Plan F “Extra”,
also known as “Medigap” plan has the same core benefits as the traditional Plan F, however,
there are “extra” perks that are not covered by original Medicare.

First, lets start with a quick explanation of how the Medicare Supplement Plan F works. With any Supplement Plan, Medicare remains your primary which allows you the freedom to go to any physician in the nation that is contracted with Medicare! As you may already know, most providers are contracted with Medicare. Unlike with an HMO, you do not need to request a referral from your primary doctor to see a specialist. So, if your neighbor Billy refers you to an excellent oncologist over at UCLA, you can rest assured that you will be able to see that specialist.

If you’re unsure if the physician is contracted with Medicare then you can contact the doctors office and simply ask “Are you contracted with Medicare?” Or you may contact our office directly and we can check for you. Nine out of ten physicians are contracted with Medicare.

The Plan F has been the most comprehensive of all Supplement plans as it fills all the gaps that Original Medicare does not cover (excluding prescriptions). It covers all of the 20% that Medicare Part B normally leaves for you to pay. The plan also covers your hospital deductible, medical deductible and excess fees. So, as long as Medicare approves and pays the service then your Supplement Plan F will pick up the remaining balance. This leaves you to pay… ZERO. Many of my clients can’t believe that they are not responsible for a deductible, co-pays or co-insurance!

Quick Scenario: William is being treated at UCLA for his Lymphoma. He called into our office very worried about what the cost would be for his chemotherapy and radiation treatments. Medicare will cover 80% of the cost of his chemo and radiation (this is covered under Medicare Part B) and then his Supplement Plan F will pick up the 20% balance. This means William will not pay a dime out of his pocket.

The Plan F is closed as of January 1st 2020. However, if you turned 65 PRIOR to 2020 then you can still apply for the Plan F. If you are turning 65 AFTER January 2020 then you cannot apply for Plan F but are  still eligible for the Plan G! Blue Shield offers the Plan G “Extra” as well.

Ok, so now about those Extra benefits!
Blue Shield’s Extra Plan F includes:

  • Silver sneakers
    This is a free gym membership to participating gyms
    $20 Copay
    Every year
    Plan pays up to $100 allowance for frames
    Every two years
    Plan pays 100% after $25 copay
    Every year
    Plan pays up to 100%
    Every year
    (Vision Benefits provided by Medical Eye Services)
    Plan pays 100%
    Every year
    Plan offers you discount on two Vista Hearing aid models
    -Vista 610 model you pay $499
    -Vista 810 model you pay $799

Vista hearing aids are available in the following styles:

– In the ear
– In the canal
– Invisible in canal
– Behind the ear
– Receiver in the ear

No cost for Hearing aid fittings, counseling, and adjustments

– Ear impressions & molds
– Hearing aid device checks
– Two-year supply of batteries per hearing aid
– Three-year extended warranty on some models

Personal Emergency Response System (PERS) – Your PERS benefits are provided by Lifestation.

This is an emergency alert monitoring system that provides access to help 24/7, at the push of a button. This benefit is available to eligible members enrolled in Plan F Extra at no additional cost.

If you would like a quote for the Plan F Extra please click here:

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New to Medicare? Schedule Your Welcome to Medicare Visit.

If you’re new to Medicare, you may be wondering what the Welcome to Medicare visit is all about! Lets dive into when to schedule the visit, what it covers and what you should expect to bring.

When is this service provided?

This visit is a one time only visit offered the first 12 months you are enrolled in Medicare Part B. The Welcome to Medicare visit is not the same as a routine physical exam or annual Medicare Wellness Visit. The Welcome to Medicare visit is an introduction to Medicare and focuses on disease prevention and detection to help beneficiaries live a healthier life.

What’s covered during this visit?

In this visit, your doctor will discuss your medical and family history, check your blood pressure, weight and height, vision exam and measure BMI. Your doctor will also update any needed screenings you need and make recommendations for future medical services or preventative screenings.

Preventative screenings such as colonoscopies and mammograms are important to keep up with, in this visit your doctor will verify your cancer screenings and immunizations are up to date. Further tests may be ordered, if necessary. Your doctors will also give you advice to help you prevent disease, improve your health, and stay well. You will get a written plan (such as a checklist) letting you know which screenings and other preventative services you should get in the future.

Your doctor will offer to discuss advanced directives with you. Advanced directives are legal documents that outline the care you want if you are too ill to speak or make decisions for yourself. It is important to keep this document up to date and share it with friends, family and your medical team. Anyone who may be caring for you if you are ill needs a copy and to know your wishes.

  • Certain screenings, flu and pneumococcal shots, and referrals for other care, if needed.
  • Height, weight, and blood pressure measurements.
  • A calculation of your body mass index.
  • A simple vision test.
  • A review of your potential risk for depression and your level of safety.
  • An offer to talk with you about creating advance directives
  • A written plan letting you know which screenings, shots, and other preventive services you need

What should I take to my visit?

You should take up to date medical records, including any immunization records. Additionally, take a list of your current prescriptions and over the counter medications in case your doctor does not have that list readily available.

Part of the visit will be a discussion about your risk factors, so you should also come prepared to discuss any relevant family medical history or current health/lifestyle factors that may impact your current care plan or future needs.

What are my costs?

It’s not too often that you can receive services for Free however, your one-time Welcome to Medicare visit is covered completely by Medicare. However, if your doctor or other healthcare provider performs additional tests or services during the same visit that are not covered under these preventative benefits, you will be responsible for your usual co-pay or deductible. Also, be sure that your doctor accepts Medicare as full assignment to avoid any surprise bills.

Have questions? Please feel free to contact us directly to speak to a licensed Medicare Specialist (844) 817-0878. There are no fee’s for our services!

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