The Solvency Of The Medicare Hi Trust Fund
This measure involves only Part A. The trust fund is considered insolvent when available revenue plus any existing balances will not cover 100 percent of annual projected costs. According to the latest estimate by the Medicare trustees , the trust fund is expected to become insolvent in 8 years , at which time available revenue will cover around 85 percent of annual projected costs for Part A services. Since Medicare began, this solvency projection has ranged from two to 28 years, with an average of 11.3 years. This and other projections in Medicare Trustees reports are based on what its actuaries call intermediate scenario but the reports also include worst-case and best-case projections that are quite different .
What Does Original Medicare Cover
Original Medicare includes Part A and Part B. For most, there is no monthly fee, or premium, for Part A coverage but there is for Part B.
Part A and B require you to pay a deductible. Part B also requires copays or coinsurance.
Most prescriptions are not covered under Original Medicare. Benefits such as vision and dental are also excluded.
What Prescriptions Does Medicare Cover
Medicare Part D plans must cover all or substantially all drugs in six categories: antidepressants, antipsychotics, anticonvulsants, antiretrovirals , immunosuppressants and anticancer.
What drugs does Medicare Part D not cover?
There are many drugs that no Medicare plans will cover under the Part D benefit, based on national Medicare guidelines.
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Open To Anyone With Medicare
Medicare Part D plans are open to everyone eligible for Medicare in the U.S. and U.S. territories. Generally, that means anyone 65 years old or older and some younger people with certain disabilities. You cannot be denied coverage for health reasons. Participation is voluntary, which means you get to decide if you want to enroll or not. If you have Medicare and Medicaid, you will be enrolled automatically, so there is no lapse in your Medicaid prescription drug coverage. The annual open enrollment period is October 15 to December 7, for coverage beginning January 1. If you decide to join later, your monthly premiums may be higher because there’s an additional fee for late enrollment.
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When Damian Birkel, 66, fills his prescriptions each month at his local pharmacy in Winston-Salem, N.C., he has the pharmacist run more than a dozen of his meds through his Medicare drug coverage plan, called Part D, and pays cash for three more. For those, he uses GoodRx, a company that provides discount coupons.
The owner of a small consulting firm, Birkel says using the discount coupons is the only way he can afford meds not covered by his plan. In fact, the $500 he saves with the coupons is enough to cover his 2021 Part D monthly premiums. So far, he says he’s fairly satisfied with the arrangement.
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Comparison With Private Insurance
Medicare differs from private insurance available to working Americans in that it is a social insurance program. Social insurance programs provide statutorily guaranteed benefits to the entire population . These benefits are financed in significant part through universal taxes. In effect, Medicare is a mechanism by which the state takes a portion of its citizens’ resources to provide health and financial security to its citizens in old age or in case of disability, helping them cope with the enormous, unpredictable cost of health care. In its universality, Medicare differs substantially from private insurers, which must decide whom to cover and what benefits to offer to manage their risk pools and ensure that their costs do not exceed premiums.
Medicare also has an important role in driving changes in the entire health care system. Because Medicare pays for a huge share of health care in every region of the country, it has a great deal of power to set delivery and payment policies. For example, Medicare promoted the adaptation of prospective payments based on DRG’s, which prevents unscrupulous providers from setting their own exorbitant prices. Meanwhile, the Patient Protection and Affordable Care Act has given Medicare the mandate to promote cost-containment throughout the health care system, for example, by promoting the creation of accountable care organizations or by replacing fee-for-service payments with bundled payments.
Best In Education: Aarp
Information is easy to follow
Ability to review all different Parts of Medicare available in your area
Lots of educational materials on the website, including general Medicare information, AARPs Medicare Plans, as well as enrollment questions
Must enter at least some of your medications to get an accurate personalized estimate of your costs
Cannot split payments over multiple methods
AARP was founded in 1958, and was a trailblazer for the insurance of older people, especially since Medicare itself didnt even exist until 1965. As such, AARPs focus is 100% on patient understanding and comfort, and all of the information is written with you in mind. There are free Medicare guides available for download on its website, and its easy to compare plans or connect with an associate for more detailed information and assistance. AARP provides all the tools you need for a well-rounded understanding of Medicare.
Some medication may not be covered by all plans, which can make a huge difference. Make sure you check and see which, if any, of AARPs plans cover your medication, and how much you may have to pay for it.
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Medicare Part D Coverage Gap & Donut Hole
Few things can gum up your Medicare Part D coverage like not understanding how to pay for your prescriptions. Part D has a unique deductible structure that includes an Annual Deductible, Initial Coverage, Coverage Gap , and Catastrophic Coverage. Knowing what they are and how they work will let you know what to expect from your Part D payments.
What Drugs Does Medicare Part D Cover
There are standard drug types that all Part D prescription coverage plans must offer. By law, there must be at least two Medicare Part D drugs covered in most categories.
Medicare Part D coverage also must cover nearly all types of medication in the six most essential categories:
- Cancer drugs
- HIV/AIDS drugs
Part D coverage must include all commercially available vaccines unless covered under Medicare Part B. You can find the full list of vaccines covered by Part D in your plans drug list. There may be additional costs based on the type of vaccine and where you receive it.
Will Medicare Part D Pay For All Of My Prescriptions
You might take a medication that your Medicare Part D Plan does not cover unless you prove it is medically necessary. You may need to work with your doctor to prove you need that medication or to find a suitable alternative medication, or you may need to change to a Medicare Part D Plan that covers the medication.
You might take a medication that is not covered by Medicare Part D at all, or is not covered for your diagnosis. That means no Medicare Part D Plan will cover it, even if you prove it is medically necessary.
Among the medications not covered by Medicare Part D at all are the “excluded” drugs, including:
|NOTE: If you are a member of MaineCare, the Medicare Savings Program, or the Drugs for the Elderly program , those programs may pay for some of the drugs listed above. Be sure your pharmacist knows you are in MaineCare, the Medicare Savings program and/or DEL.|
In addition, some medications are covered by Medicare Part B, and not covered by Medicare Part D or only covered by Medicare Part D in some situations. In those cases, your pharmacist should bill Medicare Part B.
To find out which Medicare Part D plan’s formulary will best meet your prescription needs, go to the Medicare website Formulary Finder,
Call your local Area Agency on Aging at or TTY: .
|NOTE: If you cannot find a plan that covers all of your drugs, you may be able to enroll in a plan and request an “Exception” to obtain full coverage.|
What Is Prior Authorization
Prior authorization is also known as precertification, prior notification, or prior approval. No matter what it is called, PA is basically a way to verify the medication is covered by your plan. PA also helps control costs for everyone.4
A drug might require prior authorization if it is:5
- A brand-name drug that has a generic equivalent
- More costly than other drugs within the same category/class
- Used for cosmetic reasons only
To help the prior authorization process go smoothly, it might be helpful to:
- Check the policy documents or Prescription Drug List to see if you need prior authorization
- Work with your doctor to submit a prior authorization
- Keep careful records of your prior authorization to know when it expires
- Begin the process of getting a new prior authorization at least one month in advance
To find out if a drug needs prior authorization, call the number on your member ID card or .
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Medicare Part D: Prescription Drugs
Medicare offers everyone the chance to have insurance to cover most costs for many prescription drugs. But its not mandatory coverage, and you typically have to pay a monthly premium.
How Part D works:
If you have decided to enroll in Original Medicare for your Part A and Part B coverage, the premium cost to add a Part D prescription drug plan averages about $38 a month in 2021, according to the Kaiser Family Foundation.
If you didnt go with Original Medicare and opted for Medicare Advantage , you likely have a drug plan embedded in your MA plan. Many MA plans dont charge any extra premium for the coverage, and for those that do, the cost averages around $12 a month.
What Can I Expect To Pay For A Medicare Advantage Plan With Prescription Coverage
Medicare Advantage and Part D costs can vary on a number of important factors: provider, location, and most importantly, what medications need to be covered, but the main difference between the two will be in the cost of medication. Some medications on Medicare Advantage may be more expensive than on Part D, but the opposite may also be true. Its extremely important either way to check each plan thoroughly to determine which would get you the best deal on coverage in the long run because the difference in costs can be significant, with medications costing under $50 or over $500. It will also save you a lot of time to have a pre-made list of your medications handy, since each provider will likely ask for the details, and each will have different results depending on which plan you choose.
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D Coverage Is Optional But Likely Essential
If you have stopped working by age 65, or you are working for a firm that has fewer than 20 employees, you need to sign up for Medicare coverage right around your 65th birthday. There are two mandatory pieces you will sign up for. Part A covers hospitalization, and Part B covers just about everything else, with one big honking exception: prescription drugs.
The Initial Coverage Phase
The initial coverage phase is the second phase of Part D coverage. Once your deductible is met, Part D helps cover the costs of your prescriptions.
Beneficiaries are responsible for the costs of any co-payments or co-insurance meanwhile, your plan will pay its share of the cost.
The length of your initial coverage phase depends on drug costs and the benefits your plan offers. The initial coverage phase stops once your total drug cost is $4,130.
Your total drug cost is the amount both you and your plan have paid for medications.
Do I Need Medicare Part D
Medicare Part D is technically voluntary coverage you arent required to enroll in a plan. However, if you go without prescription drug coverage before you enroll in a plan, you may pay a late penalty with your monthly premium. If you have prescription drug coverage through an employer group or retiree plan, you dont have to enroll in a Medicare Part D plan until your coverage ends.
What Does Medicare Part D Cover
Under Medicare Part D, prescription drug plans are available from private, Medicare-approved insurance companies, so benefits and cost-sharing structures differ from plan to plan. However, the Center for Medicare and Medicaid Services sets minimum coverage guidelines for all Part D plans. These rules require all plans to cover medications to treat most illnesses and diseases.
Each Medicare prescription drug plan uses a formulary, which is a list of medications covered by the plan and your costs for each. Most plans use a tiered copayment system. Prescription drugs in the lowest tiers, usually generic medications, have lower copayments. Brand-name and specialty medications in the higher tiers cost more out-of-pocket.
Medicare Part D only covers prescription drugs that are FDA approved. Experimental medications are generally not covered.
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Recent Articles And Updates
For older articles, please see our article archive.
The 2010 Medicare Part D $250 Donut Hole Rebate. Q1Group LLC, .
2020 Part D Income-Related Monthly Premium Adjustment. . .
2021 Medicare Part D Outlook. Q1Group LLC, .
2021 Part D Income-Related Monthly Premium Adjustment. . .
How Do Medicare Advantage Ppo Plans Work? Healthline Media, May 5, 2021, .
Analysis of Part D Beneficiary Access to Preferred Cost Sharing Pharmacies . . .
Announcement of Calendar Year 2021 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies. . .
Assistance with Paying for Prescription Drugs. Center for Medicare Advocacy, November 30, 2015, .
How Medicare Part D Works. AARP, October 2016, .
Medicare Advantage Special Needs Plans . Healthline Media, May 3, 2021, .
Kirchhoff, Suzanne M. Medicare Coverage of End-Stage Renal Disease . . .
Tips For Choosing Medicare Drug Coverage
If youre wondering how to choose a Medicare drug plan that works for you, the best way is to start by looking at your priorities. See if any of these apply to you:
- I take specific drugs.
Look at drug plans that include your prescription drugs on their
. Then, compare costs.
- I want extra protection from high prescription drug costs.
Look at drug plans offering coverage in the
, and then check with those plans to make sure they cover your drugs in the gap.
- I want my drug expenses to be balanced throughout the year.
Look at drug plans with no or a low
, or with additional coverage in the
- I take a lot of generic prescriptions.
Look at Medicare drug plans with
that charge you nothing or low copayments for generic prescriptions.
- I don’t have many drug costs now, but I want coverage for peace of mind and to avoid future penalties.
Look at Medicare drug plans with a low monthly
for drug coverage. If you need prescription drugs in the future, all plans still must cover most drugs used by people with Medicare.
- I like the extra benefits and lower costs available by getting my health care and prescription drug coverage from one plan, and Im willing to pick a drug plan with restrictions on what doctors, hospitals, and other health care providers I can use.
Look for a
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Medical Equipment Used To Administer Medications
- Infusion pumps
- Nebulizer machines
* Oral chemotherapy and anti-nausea agents have to meet certain criteria to be covered by Part B. While the majority of injectable medications will be covered by Part B, keep in mind that some drugs may be excluded. The coverage requirements change on an annual basis.
** Hepatitis B risk factors for the purpose of Part B coverage include diabetes mellitus, ESRD, hemophilia, living with someone who has Hepatitis B, or being a healthcare worker who could be exposed to blood or other bodily fluid.
How To Get Prescription Drug Coverage
Medicare drug coverage helps pay for prescription drugs you need. Even if you dont take prescription drugs now, you should consider getting Medicare drug coverage. Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when youre first eligible, and you dont have other creditable prescription drug coverage or get Extra Help, youll likely pay a late enrollment penalty if you join a plan later. Generally, youll pay this penalty for as long as you have Medicare drug coverage. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan can vary in cost and specific drugs covered.
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What Is A Formulary
Medicare requires that each Part D plan provides a standard level of coverage.
Different insurers provide lists of covered medications that a person can view many refer to each list as a formulary.
Insurance companies have different formularies, and each can decide which medications it covers, the tiers a medication falls under, and the categories that a medication belongs.
Part D plans include both brand name and generic prescription medications, and a formulary must consist of at least two common prescription medications from each category. The insurer can decide which two medications to offer.
If the formulary does not include a particular prescription medication, a similar medicine may be available. A person may wish to discuss options with their prescribing doctor.
If a physician prescribes a medication that is not on the formulary or believes that the available medicines may not be suitable, an individual can:
- request an exception
- pay for the drug out of pocket
- file an appeal with the plan provider or insurer
Drug plans may change their formulary at any time, as long as they follow Medicare guidelines.
A drug plans formulary may change because of:
- a change in drug therapy
- the release of a new drug
- new medical information becoming available
Sometimes, a person is notified of a change after it has already happened, but notice is generally in writing and provided a minimum of 30 days before a change occurs.