The Prescription Drug Plan stages<\/strong><\/p>

Prescription Drug Plans can have four stages: Deductible, Initial Coverage, Gap coverage (or Donut Hole) and a Catastrophic Coverage. \u00a0Some plans don\u2019t have deductibles and therefore have three stages.\u00a0 The amount of money you pay for each drug will change as you move from one stage to the next.\u00a0 Part D is subsidized by the Federal Government.\u00a0 The premium you pay for a plan is not the total cost.\u00a0 Medicare pays a large portion of the premium directly to the insurance company.\u00a0\u00a0<\/p>

Here are the four stages<\/u>:<\/p>

Deductible<\/u><\/p>

The plan starts counting how much you pay in prescription drugs January 1 of every year.\u00a0 If you have a plan with a deductible, you will have to pay the total drug cost until you meet your deductible.\u00a0<\/p>

Initial Coverage<\/u><\/p>

After the deductible, you usually pay a copay (set amount) or a coinsurance (percent of cost) during the Initial coverage.\u00a0\u00a0<\/p>

Coverage Gap (Donut Hole)<\/u><\/p>

This stage is sometimes referred as the donut hole.\u00a0 It is a slang name for the coverage Gap in the Medicare Drug plan.\u00a0\u00a0 When a member reaches the donut hole, the insurance company will not pay at all for the drugs (Medicare stop subsidizing the drugs). \u00a0Then, after you pass that stage, the plan starts paying again for the drugs.\u00a0 The donut hole starts when you reach a total yearly cost of $5,030 (2024).\u00a0 The total yearly costs consist of what you pay and what the insurance company pays.\u00a0 \u00a0In the Coverage Gap, you will pay 25% of the actual drug cost. \u00a0The insurance company will start paying for drugs again when your yearly out-of-pocket reaches $8,000 (2024).\u00a0<\/p>

Note: If you are taking very expensive brand name drugs, you might want to talk to your doctor to find out if some of them can be replaced with less expensive generic drugs.\u00a0\u00a0 That will minimize your out-of-pocket expenses with your prescription drugs.<\/p>

Catastrophic Coverage<\/u><\/p>

In the final stage, drugs are again subsidized by the Federal Government and you pay 5% of the cost or $4.15 (2023) copay for generic (including brand drugs treated as generic) and $10.35 (2023) copay for all other drugs.<\/p>

Drug Tiers<\/strong><\/p>

All plans categorize drugs by tiers.\u00a0 The cheaper the drug the lower the tier (for example generic drugs are tier 1 or tier 2 and very expensive drugs are tier 4 or tier 5).\u00a0 By the same token, the lower the tier the lower your copay.\u00a0 A drug can be tier 1 with company A and tier 3 with company B.\u00a0\u00a0 So, the same drug will cost you more with company B because it is categorized as a higher tier.\u00a0 Each company decides how many tiers they want to have and what tier they assign to each particular drug.\u00a0<\/p>

Example of Drug cost<\/strong><\/p>

Let say you take a tier 3 brand name drug that cost $520 per month.\u00a0 With many company\u2019s plans your tier 3 copay can be around $50 per month.\u00a0 If your plan has a deductible for tier 3, you will have to pay the deductible first.\u00a0 After your deductible, you start paying your copay of $50.\u00a0 Once you reach the total yearly costs of $4,130 (in about 8 months $520 x 8 = $4,160), you will pay 25% of the cost or $130 (25% of $520) for that drug.\u00a0 Note: this example is oversimplified but it should give you an idea of your cost.<\/p>

INSULIN SAVINGS PROGRAM<\/strong><\/p>

Some plans participate in the Insulin Savings Program.\u00a0 This program provides affordable, predictable copayments on select insulins through the first three drug payment stages.\u00a0 If you are on insulin, make sure you join a plan that offers this program.\u00a0<\/p>

EXTRA HELP FOR YOUR PRESCRIPTION DRUGS <\/strong><\/p>

(Low Income Subsidy or LIS)<\/strong><\/p>

Extra Help is additional financial assistance that Medicare members with low resources receive from Social Security for their prescription drugs.\u00a0 When the government added prescription drug to the Medicare program, they determined that plans will have a monthly premium, a deductible and a limit of how much the plan can pay per member (Coverage Gap).\u00a0\u00a0 Also, copays for brand name drugs could be very high for some people with limited income.\u00a0 The Extra Help will cover the premiums, the deductibles and eliminate the Coverage Gap for people that qualify.\u00a0 In addition, beneficiaries will get reduced copays for the medications.\u00a0 There are different levels of Extra Help.\u00a0 The amount they pay for their medications depends on the level of Extra Help they qualify.<\/p>

For 2021 these are the Resources and Income limit to qualify for Extra Help:<\/p>

Resources: $14,790 for an individual or $29,520 for a married couple living together.<\/p>

Annual Income limit:\u00a0 $19,140 for an individual or $25,860 for married couple living together.<\/p>

To learn more about Extra Help and to find out what Social Security considers a Resource and Income, check the publication \u201cUnderstanding the Extra Help with Your Medicare Prescription Drug Plan\u201d from Social Security website ssa.gov<\/a>.\u00a0<\/p>

See if you qualify for Extra Help and apply<\/a><\/p>

Get more information about Extra Help on Medicare.gov:<\/p>

https:\/\/www.medicare.gov\/your-medicare-costs\/get-help-paying-costs\/find-your-level-of-extra-help-part-d<\/a><\/p>

Find a Pharmaceutical Assistance Program for the drugs you take<\/strong><\/p>

https:\/\/www.medicare.gov\/pharmaceutical-assistance-program\/<\/a><\/p>

Learn more about the Prescription Drug plan at medicare.gov:<\/p>

https:\/\/www.medicare.gov\/drug-coverage-part-d<\/a><\/p>

There are many companies that offer Medicare drug plans.\u00a0 I am contracted with many of them but it is not practical to contract with all of them.\u00a0 In most cases one of the companies I represent has the lowest out-of-pocket cost (or very close to it).<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t