Accessing coverage for prescription drug coverage under Medicare works differently than traditional group or individual major medical plans on the market today. Medicare’s prescription drug plan program is optional, however, penalties could apply to beneficiaries who waive coverage with no credible coverage in place and decide to elect at a later time.
There are two ways to access drug coverage:
- Stand-alone Prescription Drug Plan (PDP): These plans add coverage to Original Medicare, some Medicare Private Fee-for-Service (PFFS) plans, and Medicare Medical Savings Accounts (MSA) plans
- Medicare Advantage Plans (Part C): You get all of your Part A, Part B, and Part D through these plans. Their plans are commonly called “MA-PDs”
– Most drug plans have an annual deductible, a 4-5 tier copay/coinsurance schedule, coverage in the gap and catastrophic phases. Private insurance carriers create their own structure, but are required to cover the yearly standard benefit required by Medicare and CMS. In addition, each carrier has their own list of drugs, or drug formulary, but are required to cover at least 2 drugs in each therapeutic class.
– Part D premiums will vary by stand-alone prescription drug plans and Part C plans elected. More robust drugs lists may come with a higher premium but lower out-of-pocket costs at the pharmacy. Individuals with higher income may have an Income Related Monthly Adjustment Amount (IRMAA) apply. Exceptions can be requested through Social Security if a beneficiary believes an incorrect IRMAA has been applied.
Virginia Asset Group Financial Services, is a licensed and certified representative of Medicare Advantage [HMO, PPO AND PPFS] organizations [and stand-alone prescription drug plans] with a Medicare contract. Enrollment in any plan depends on contract renewal.