What Drugs Are Covered By Medicare Part D
Part D plans help pay for medications you take regularly to manage chronic conditions, for example, heart disease, high cholesterol, or asthma. It also pays for medications you take for a short period of time, such as antibiotics. There are also some medications covered by your Original Medicare Part B plan and not covered by Part D.
Read more about Part B vs. Part D
Ways To Reduce Prescription Costs
There are programs available to help cover prescription costs over what Part D covers. Below are some options that might fit your needs.
- Extra Help program: This Medicare program pays toward out-of-pocket drug costs like premiums, deductibles, copays and coinsurance. With Extra Help, you’re also exempt from late enrollment fees and Part D donut hole costs.
- State Pharmaceutical Assistance Programs: Use this resource to see if a program is available in your state.
- Patient assistance programs, or PAPs: Drug companies offer these programs to help with drug costs if you qualify based on income.
- Generic drug substitutions: Your doctor or pharmacist may be able to substitute a generic for an expensive brand-name medication.
- Pay for your drugs out of pocket without using your insurance. Some drugs actually may cost less if you pay for them outright. If the cost with insurance seems high, ask your pharmacist whether the manufacturer’s price is cheaper. Keep in mind that drugs you buy outside your insurance plan won’t reduce your deductible or help get you out of the donut hole. It’s best to ask your insurance company to guide you through this decision.
How Do I Get Out Of The Coverage Gap
Once your total spending on covered drugs exceeds the threshold, youll enter the catastrophic coverage phase and no longer be subjected to the high costs of the coverage gap.
In 2023, the total cost of spending must reach $7,400 to get out of the donut hole. Thats when catastrophic coverage automatically starts.
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Medicare Prescription Drug Coverage
What do you need to know about prescription drug coverage? Let’s unpack what you need to know. According to a 2016 study from the CDC 40% of people over the age of 65 take five or more medications a day. Medicare can help you pay for it. A Medicare prescription drug plan is also known as Medicare Part D. To get Medicare drug coverage you must join a plan run by an insurance company or a private company approved by Medicare. There are two ways you can sign up. The first, buy a stand-alone Medicare Part D plan. The second, purchase a Medicare Advantage plan that includes prescription drug coverage. And remember, you can only get these through private insurance companies. Keep in mind each plan has a list of prescription drugs that it covers on a list called a formulary. The formulary has information like which tier the drug is on. Tiers help determine how much you’ll pay for your medicine. The formulary also tells you about any special rules including whether there are quantity limits. You can get the most out of the Part D plan by checking different ways to save like reduced pricing at preferred pharmacies, extra benefits, or 90-day drug prescriptions. Don’t forget. If you don’t sign up when you’re first eligible, you could pay more in the form of a late enrollment penalty. Got more questions? Learn more at AetnaMedicare.com.
Forty-one percent of those over 65 take five or more medications a day.1
Seven Tips To Avoid The Medicare Donut Hole
Getting the best prices on medicines is always good and it may be extra helpful for people on Medicare Part D who hit the donut hole. Some people find that with savvy shopping skills, they can lower their prescription costs enough that they dont hit the donut hole at all.
These seven tips can help you save time, money and frustration when trying to understand Medicare prescription drug costs.
What Is The Medicare Donut Hole Or Part D Coverage Gap
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Big changes are coming to Medicare Part D prescription drug coverage following the passage of the Inflation Reduction Act of 2022, which gives Medicare the power to negotiate for lower prescription drug prices. The act also includes caps on out-of-pocket spending, limits on increases in Medicare Part D premiums and drug prices, and more.
Certain changes will take effect in 2023, while others start as late as 2026.
If you have a Medicare Part D prescription drug plan, theres a gap in coverage after youve spent a certain amount on covered drugs the Medicare “donut hole.” While potential costs associated with the donut hole went down substantially in 2020, theres still a coverage gap that may affect what you pay for prescription drugs.
Heres what you should know about the Medicare Part D donut hole.
What Happened In The Donut Hole Coverage Gap In 2020
The Medicare donut hole coverage gap shrunk to its final cost level in 2020. We’ll explain more below about what this means for your coverage.
The Medicare donut hole is one of four coverage levels that are in a Part D prescription drug plan.
You enter the Medicare donut hole after your deductible period and your initial coverage period end and before you enter catastrophic coverage.
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Costs In The Coverage Gap
Most Medicare drug plans have a coverage gap . This means there’s a temporary limit on what the drug plan will cover for drugs.
Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you and your plan have spent $4,430 on covered drugs in 2022, you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs wont enter the coverage gap.
Is There Financial Help For Part D
Medicare provides assistance, known as Extra Help , in paying for prescription drug costs for those with limited income and resources.
If you qualify, you will receive help paying for any Medicare drug plan’s monthly premium, annual deductible , and prescription copays or coinsurance. This Extra Help will count towards your out-of-pocket expenses.
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Need More Help Check Out These Resources:
The State Health Insurance Assistance Program offers free, independent counseling services and local workshops to help with your health care benefit decisions.
Visit medicare.gov or talk to a Medicare expert, like an agent, broker or health plan sales rep.
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Can I Avoid The Medicare Donut Hole
The only way to avoid the Medicare donut hole is to prevent your out-of-pocket expenses for prescription drugs from reaching $4,430 in 2022. Once you hit that amount, you enter the Medicare coverage gap.
With that said, there are several ways to manage out-of-pocket costs to try and avoid the coverage gap. One way is to switch from a brand name drug to a generic drug or from a brand name to a less expensive brand name drug, if possible. Ask your physician whether this is possible based on your specific medical condition and health history.
Another option is to use mail-order pharmacies or take advantage of Pharmaceutical Assistance Programs provided by your state or .
One caveat is that people with specific income and resource limits may qualify for the Extra Help program, in which case they would not enter the donut hole.
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How Do I Get Out Of The Donut Hole
Once your costs for prescription drugs meet $7,050, you will move into the next coverage phase. When this happens, catastrophic coverage kicks in automatically.
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During the catastrophic coverage phase, you cover $3.95 for generic medications and $9.85 or 5%, whichever costs more, and your policy will settle 95% of the remaining costs until the end of the plan year. Then, the cycle repeats annually.
What Happens If My Prescription Drug Isnt Covered
Medicare mandates that there be at least two drugs from every therapeutic class in a formulary. But in some instances, you may need a drug that just doesnt make the list. If that happens, your doctor can contact the insurance company to request whats called a formulary exception. Your plan will review the request to see if they’ll cover it. Typically, if the drug is approved, it will be provided to you at the cost found in one of the top tiers, such as tier 4 or 5, which means you will usually be responsible for a higher percentage of the cost than if the medicine was included on a lower tier.
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Use Cost Calculators To Find The Best Prices
If you have an online account for your Medicare Part D plan, look for a prescription drug calculator tool where you can put in the prescriptions you take and how much you need. Itll tell you how much the covered drug will cost you at different pharmacies. It might not be cheapest at the corner drugstore.
How Much Will My Prescription Drugs Cost
Several factors determine how much you will pay for your prescriptions.
- The plan you choose. Each plan sets its own cost-sharing by tier. Check with your plan about incentives, such as discounted pricing on 90- or 100-day supplies.
- Whether your pharmacy is inside your plans network. Generally, you need to use a pharmacy in your plans network for the medication to be covered. Some plans have preferred pharmacies where you could save even more.
- Whether the drug you take is on the covered drug list . Generally, plans will only cover medications if the drug is on their covered drug list . Medicare drug plans have negotiated to get lower prices for the drugs on their drug lists, so using those drugs will generally save you money. Medicare drug plans have negotiated to get lower prices for the drugs on their drug lists, so using those drugs will generally save you money.
- What tier your medication is on. Plans place their drugs on different tiers which determine costs. Generally, the lower the tier, the less you pay.
- Whether your plan has a deductible. With a deductible, you pay for the full cost of your medication until youve met the deductible amount.
- Whether you qualify for extra subsidies. There are programs available to help people with limited incomes pay prescription drug costs. Learn how you may be able to qualify to get help.
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How Does The Medicare Donut Hole Work
Prescription drug coverage consists of multiple stages. The first phase starts on your prescription drug plans effective date often January 1.
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This primary phase involves reaching your deductible up to $480. You are responsible for paying 100% of this cost.
After meeting the deductible, you enter the initial coverage phase. During this phase, you are only responsible for copayments. After the cost of drugs reaches $4,430, you fall into the donut hole.
While in the donut hole, you will need to pay 25% of the cost for generic and brand-name drugs until what you pay out-of-pocket reaches $7,050. The final phase, catastrophic coverage, kicks in when you leave the gap.
You are responsible for just $3.95 for generic medications and $9.85 or 5% of your drug costs in the catastrophic coverage phase, whichever costs more. You will remain in this phase until the end of the calendar year. The monthly statements you obtain from your plan provider should show your current status regarding the donut hole.
Do Medicare Advantage Plans Cover The Medicare Donut Hole
Some Medicare Advantage plans may offer extended gap coverage for enrollees in the Medicare donut hole, though you should check with your specific plan for more details.
A licensed insurance agent can help you learn about Medicare Part D plans and Medicare Advantage plans with prescription drug coverage that may be available where you live.
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Eight Ways To Avoid The Medicare Part D Coverage Gap Donut Hole
Learn ways to keep your prescription drug costs low and avoid the Medicare Part D coverage gap.
Medicare consultant and expert, seniors advocate, and author
Are you frustrated by the cost of prescription medications even with Medicare coverage? Youre not alone. Fortunately, there are some methods and strategies to help minimize your out-of-pocket expenses.
Read on to learn several proven strategies that can help you substantially reduce your cost of medications and avoid falling into the dreaded Medicare donut hole.
What Is Medicare Part Extra Help
Medicare Extra Help is a special program that provides financial assistance to people who need help affording their prescription medications. Extra Help can offer an estimated $5,100 in benefits each year to people who qualify. To be eligible, you must be receiving Medicare and have limited financial resources. If you can enroll in Extra Help, you won’t have any coverage gap or donut hole with Medicare Part D.
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What Costs Count Towards Getting Out Of The Coverage Gap
Once youve entered the coverage gap , its important to understand which out-of-pocket costs count towards helping you reach the catastrophic coverage phase. Remember, if your prescription drug spending reaches $6,350 in 2020, youll have catastrophic coverage for the rest of the year.
The following costs count towards your out-of-pocket spending and getting you out of the coverage gap:
- Your prescription drug plans yearly deductible
- The amount you pay for your prescription medications
- The 70% manufacturer discount for brand-name drugs while youre in the coverage gap
How Long Does The Donut Hole Last In Medicare
According to the Centers for Medicare and Medicaid Services, â In 2021, Medicare Part D provides affordable prescription drug coverage to over 48.8 million Americans. The Affordable Care Act eliminated the Coverage Gap in the original Part D benefit, reducing patient cost-sharing responsibility for covered medications from 100% to 25%â.
Leaving The Part D Donut Hole
In order to leave the donut hole, your total out-of-pocket costs must reach $6,550. If you hit this number, then you enter the catastrophic payment stage. Your plan pays most of the cost for your drugs in the catastrophic stage. You may pay a small copay or coinsurance, and you will remain in this stage for the rest of the year.
Your out-of-pocket drug costs, including copays, coinsurance amounts and your deductible, if any, count toward the dollar limits. Other amounts that contribute to reaching the limits include:
- What your plan pays for your drugs in the initial coverage stage
- Discounts provided by drug manufacturers in the coverage gap stage
- Amounts paid by others on your behalf, such as financial assistance programs, in any payment stage
Medicare Donut Hole : An Example
Nicole has a Medicare Part D prescription drug plan, and takes costly prescription drugs to treat her medical conditions. This table helps illustrate the Medicare donut hole . Please note that the dollar amounts spent on prescription drugs are only for the purpose of this example involving the fictitious âNicole.â
|Nicole enters catastrophic coverage phase.||Amount spent to reach coverage gap â $4,130 Amount spent during coverage gap â $2,500||$4,130 + $2,500= $6,630|
|After 10 months, Nicoleâs prescription drug spending reaches $6,630. It takes $6,550 to reach the catastrophic phase â so she reaches this phase after 10 months. From that point until the end of the year, Nicole will only pay a small coinsurance/copayment for each medication.|
Your Medicare Part D prescription drug plan will continue to send you statements listing your prescription drug expenses . This statement explains how much you and the plan have paid for covered prescriptions, and which benefit stage youâre in.
Medicare information is everywhere. What is hard is knowing which information to trust. Because eHealthâs Medicare related content is compliant with CMS regulations, you can rest assured youâre getting accurate information so you can make the right decisions for your coverage.Read more to learn about our Compliance Program.
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Understanding The Medicare Donut Hole
The Medicare Part D donut hole, also known as the coverage gap, is a stage in Part D prescription drug coverage that may temporarily limit what your Medicare prescription drug plan will cover. Not everyone will enter the coverage gap. During this stage of coverage, you may start paying more for covered prescription drugs than what you paid earlier in the year. The dollar amount when you enter the donut hole stage may change each year. The coverage gap begins once you and your plan have spent $4,430 on covered medications in 2022, varying from year to year.
If your Medicare Part D health plan requires a deductible to be met, you must pay the entirety of the cost of your medication until your deductible has been met . After your deductible has been met, your Initial Coverage stage begins.
Changes in the dollar threshold for the Medicare Part D donut hole, as well as the cost-sharing amount you pay during this coverage stage, result from the Affordable Care Act . The Medicare donut hole officially closed in the year 2020. You might still reach this threshold, also called the initial coverage limit, but you wonât pay more than 25% of the cost for any covered prescription drugs.