Medicare Part D Explained | (And How To Avoid The Donut Hole)

Medicare Part D is something I get a lot of questions about. It can often be one of the most confusing

part

s of Medicare to understand. Today I'm going to explain how Medicare Part D works. We'll talk about the coverage gap. or the coverage gap as well and whether that's something you should worry about or not, so stay tuned. Hello, my name is Stefanie apt. I am an independent insurance broker specializing in helping seniors across the country navigate the world of Medicare. to post videos about the different

part

s of Medicare as well as Medicare plans, and if you find value in the videos, I'll ask you to take a second and subscribe to the channel, you can like the video and make sure you leave. your questions in the comments section below.

I would love to read them and will be sure to answer them. Medicare Part D is the part of Medicare that covers your prescription drugs, and you can get Medicare Part D benefits through a separate Medicare Part D prescription drug. plan or through a Medicare Advantage plan that includes prescription drug benefits. Either way, the Part D coverage you get will be pretty similar. Medicare Part D has different levels or phases of coverage and includes a coverage gap or coverage gap, so today I'm going to talk about how that all works, we're going to break down the different Medicare Part D coverage phases and how they work, we'll talk about the coverage gap or coverage gap and whether or not you should worry about it, and finally, we'll talk about how to find the best Medicare Part D plan to cover your specific medications and meet your specific needs .

All Medicare Part D plans have different coverage phases, so there's a deductible phase, there's the entry-level coverage phase, there's the coverage gap or

donut

phase.

hole

and then there is the catastrophic coverage phase. It's important to know that Medicare Part D plans are calendar-year renewable plans, so each Part D plan renews and restarts every January 1st, including phases, and most Medicare beneficiaries only They will reach that first or second phase. In a given year, when it comes to insurance, the deductible is the amount you have to pay out of pocket before the insurance kicks in, so for Part D this means you will have to pay the full cost of your medications until I have met the plan's deductible before the Part D plan goes into effect in 2020.

The standard drug deductible for Part D plans is four hundred and thirty-five dollars per year. Now some Part D plans have lower deductibles and some have a $0 deductible, but the vast majority of Part D plans have a deductible of approximately four hundred and thirty-five dollars in 2020, so the reaction of many people is that it is a high deductible. I'm not even taking that many medications. I won't even meet that deductible the good news is that many Part D drug plans, even if they show that they have a four hundred and thirty-five dollar drug deductible, actually have a zero dollar deductible on their lower tier generic drugs , like your tier 1 or tier two generic drugs, so if you're taking only tier 1 and tier 2 drugs, there's a good chance that deductible won't even apply to you;

However, if you are taking a brand name drug or, in most cases, Tier 3 or higher, you will have to pay in full. cost of that drug at the pharmacy before your drug plan goes into effect and remember that deductibles reset along with your plan every January 1 after this deductible coverage phase, your initial level coverage phase arrives and This is generally the phase you want to stay in after you've met your deductible when you're in the level coverage stage. You will only pay a fixed copayment or coinsurance that your drug plan has set for your specific medications.

The amount you pay will depend on the level. Your medication is included and the tiers have been established by the drug plan and may vary slightly from one drug plan to another because these tier categorizations may vary somewhat between Part B drug plans, we recommend using their list of drugs to buy each year and find the best Part D plan for your specific drugs and I'll talk about that a little more in a moment after the initial level coverage phase, the coverage gap comes, now it's There's been a lot of talk about the coverage gap being closed. or the coverage gap is supposed to close in 2020, but in reality there is still a coverage gap and most people think that's the coverage gap, so whether you want to call it the coverage gap or the

donut

hole

coverage, I'm going to break down what you can expect your drug costs to be higher if you reach this coverage phase during the year.

Keep in mind that most people will never reach the coverage gap phase. Recent studies indicated that only about 10 percent of Medicare beneficiaries actually reach the coverage gap or coverage gap. This coverage gap comes after a certain spending threshold, the dollar amount of the spending threshold can change and In 2020 the spending threshold is four thousand and twenty dollars and that is the spending limit that puts you in the coverage gap, so every month when you renew your medications you go to your pharmacy and you are paying a certain amount for your medications and the insurance company pays the rest once the total amount you and the insurance company have paid together equals four thousand twenty dollars you have reached that spending threshold and are now in the coverage gap phase and when you are in the coverage gap stage you will now generally have to pay 25 percent of the cost of your patience and that is deducted from the price that your insurance company has established with the pharmacy that you use for that medication, so let's say For example, you are taking a drug that has a retail price of $400 and you are in the entry-level coverage phase paying perhaps a forty-five dollar copay for that drug now that you are in the coverage gap you will have to pay 25 percent of the cost of that drug, which is $100, so now you're paying $100 for this drug when you were paying $45 before so you can see that your drug costs can really go up when you're in the Coverage gap The items that count toward reaching the coverage gap are any amount you have paid toward your deductible, your copayments and coinsurance for your covered drugs, things that are not What counts toward reaching the coverage gap would be the monthly premium you have to pay. pay for your drug plan, any amounts you pay for drugs that are not covered, and any amounts you would pay for drugs that are completely out of stock. from the network pharmacy now, some Medicare beneficiaries will actually get out of the coverage gap and be able to get to the final coverage phase, which is called catastrophic coverage, this part gets a little complicated once you've spent six thousand three hundred fifty dollars in 2020.

Now, in catastrophic coverage, the reason it gets complicated is that to get to catastrophic coverage, Medicare only counts the costs that go to your troop, which represents your actual out-of-pocket or out-of-pocket costs. total. These are examples of disbursements. -out-of-pocket costs that count towards your troop or your true out-of-pocket costs, so these are the costs that will help you get to the catastrophic phase of coverage and the amount you have paid towards your deductible, your co-pays and coinsurance when you are in Your initial tier coverage phase is almost the full cost of the brand name drugs you bought during the coverage gap, but for generic drugs only the amount you paid for the drugs in the coverage gap counts, not the full cost once.

Once all of these costs add up to six thousand three hundred and fifty dollars in 2020, you are now in the catastrophic coverage phase and in this phase your prescription drug costs generally go down in this phase, you will only pay 5% of the cost of your drugs or three dollars and sixty cents for generic drugs or $8.95 for brand name drugs, whichever is greater, the coverage gap is pretty lousy and no one is happy if it gets there, it's better than in previous years. It was when Medicare Part D was first established that you had to pay the full cost of all your drugs when you were in the coverage gap, so how can you

avoid

the coverage gap?

I'm going to share some tips with you the first and most important tip is to shop for your Medicare Part D drug plan every year, as I mentioned earlier in the video, different Part D drug plans can classify different drugs. at different levels, which in turn can determine how much you have to pay for the cost of your medications. Additionally, there are certain Part D drug plans that offer more coverage during the coverage gap than others. If you're going into the coverage gap, it can be difficult to

avoid

; However, there are some plans that can reduce your out-of-pocket costs. so you definitely want to actively purchase your plan every year and that's something we do as a free service for all of our Medicare Advantage and Medicare Supplement customers and I'm also going to link a video in the description below that shows you how to purchase and find the best Medicare Part D drug plan on your own using the

medicare

.gov Plan Finder tool.

Another tip is to pay cash for some of your medications if the costs are low enough now. If you pay cash for your medications instead of using your Medicare Part D drug plan, those costs will not count toward that expense. through the hold that puts you in the coverage gap, so it's always a good idea to ask your pharmacy what the cash price would be for that medication and see if it's the same or maybe less than the copay or coinsurance amount set by your Part D plan, there are many pharmacies, like local grocery stores, that offer very low cash prices for generic medications, so it's always a good idea to check there and you can try that too. using websites like good rx comm to find free coupons for your medications and blink is another resource you can check out and these websites and resources offer you free coupons for pretty big discounts on certain prescription medications so if you are taking a level lowest generic, you may sometimes find that costs are lower if you pay cash or use one of these coupons than if you use your drug plan for that drug and count it toward your total out-of-pocket amount to reach the coverage gap overall.

Medicare Part D can be a little complicated depending on the medications you take; However, the good news is that you can change your Part D plan each year; There is open enrollment every fall; It is called the Medicare annual election period where you can change your Part D plan and choose a new Part D plan and that is between October 15 and December 7. If you have more questions about Medicare Part D, be sure to check out the links in the video description below and you can always call or email us anytime thanks so much for watching and see you soon