Thank you for taking the time to explain the insurance plans so carefully. You are a rare professional. I so much appreciate your honesty and ethics. No doubt we will have a long business relationship.
Medicare Part D
Medicare Part D Prescription Plans
The current Medicare Part D Prescription Plans or PDPs were an outgrowth of the 2003 Medicare Prescription Drug, Improvement, and Modernization Act (also called the Medicare Modernization Act or MMA) passed by Congress in 2003.
In the original model for PDPs, Medicare beneficiaries were to pay approximately a $35 per month premium, a $250 deductible, and 25% of the total drug costs between $250 and $2,250. All PDPs were to be offered through private insurance companies. There were no, and still are not, Part D plans offered or run by Medicare or the government itself.
Medicare allowed the insurance companies to come up with other models for PDPs. For example, some plans do not have a deductible. Instead, they have a set of tiers, or various copay levels for generics and brand name prescriptions. This is still the case today. However, the no-deductible plans generally have high premiums, and nowadays very few people have them.
The Latest Structure for Most PDPs
In the past few years, most of the competitive PDPs have adopted this structure.
Using preferred pharmacies……
Tier one generic drugs: Zero or very low copays. The deductible does not apply.
Tier two generic drugs: Low to moderate copays. The deductible does not apply.
Tier three* drugs: The deductible applies and the copay ranges from $25-$50.
Tier four* drugs: The deductible applies and the copays can be up to $100.
Tier five* specialty drugs. The deductible applies. The co-insurance typically ranges from 25 to 33%.
* Generally tiers 3-5 consist of name brand drugs. However, there are some generics that can fall into one of these three categories.
For additional details of the original set up, please refer to a government agency publication titled THE MEDICARE PRESCRIPTION DRUG BENEFIT (PART D) Fact Sheet. Please keep in mind that the numbers shown on this sheet are NOT current.
For current information about Part D plans, please refer to the current Medicare and You booklet published by the Centers for Medicare and Medicaid Services (CMS).
Beginning in 2011, some of the insurance companies offering Part D plans initiated a new trend. Formerly, we had network and non-network pharmacies only. Your copays were the same at a network pharmacy. Your plan was not accepted at a non-network one.
Now, most insurance companies have aligned themselves with a preferred network of pharmacies. How do you know if the plan uses preferred pharmacies? When you do a drug search on Medicare.gov, you will see one of two designations under of the listing for each plan. They are as follows:
If you see the words “Preferred-Network”, that tells you the plan uses preferred and standard pharmacies. Usually, your copays are lower at a preferred pharmacy.
Medicare.gov allows you to choose two pharmacies at a time when running your prescriptions on their site. If you select a pharmacy that is a standard only, pharmacy with any Part D plans, then your search may not show you the plans that are the best buy with the lowest copays. You can keep selecting different pharmacies until you find one in your area that is listed as a preferred pharmacy.
For assistance in running you meds on Medicare.gov or an alternative drug plan finder, please consult with your insurance professional or another knowledgeable person.
Find help selecting a Prescription Drug Plan.