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Medicare Part D

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1. What is Medicare Part D?

Medicare Part D is a federal program that provides prescription drug coverage for Medicare participants. The program began January 1, 2006.

2. Who is eligible for Part D benefits?

If you receive healthcare coverage under Medicare Part A or B, then you are eligible for Medicare Part D, regardless of whether you receive Medicare as a senior or as a disabled individual.

3. Who will provide my prescription drug coverage?

Medicare Part D prescription drug coverage will be made available through private drug plans that are approved by the federal government. Most of the plans will be offered by private insurance companies or health maintenance organizations (HMOs).

Comparative plan information including covered medications, costs, and coverage areas is available on the Medicare website. You will be able to contact a plan provider directly to learn detailed information about their Part D plans.

For directions on using the Medicare's plan comparison tool, please review our instructional guide.

4. Is participation required?

No, Medicare Part D is a voluntary program. However, you may be penalized for enrolling late. If you participate in Medicare Part A or B and you do not enroll in a Part D plan when you first become eligible, but decide to enroll in Part D later, then you may have to pay an additional charge with your monthly Part D premiums.

5. How do I know if I will have to pay a late enrollment penalty?

If you already have a prescription drug plan that has coverage that is as good as or better than Medicare Part D coverage, then you may delay your Part D enrollment without risking a penalty. If you have prescription drug coverage through another source such as SeniorCare, Medicare supplemental (Medigap) insurance, or a former employer, then you should receive information on your coverage and how it compares to Part D coverage each fall by September 31. If you do not receive this information, you should contact your current prescription drug plan provider and ask for written information on how your current coverage compares to Part D coverage.

6. How do I sign up for a Medicare Part D plan?

If you are already a Medicare participant, you join Part D by selecting a Part D plan and enrolling directly with the plan's private provider, not the federal government. Each private plan has its own enrollment process.

As of the fall 2011, it is now possible to enroll online through the Medicare websites plan comparison tool.

7. When can I enroll in a Part D plan?

Most current Medicare participants may enroll in a Part D plan any time between October 15 and December 7 each year.

Individuals who are not currently receiving Medicare benefits, but who will soon qualify for Medicare, have an "initial enrollment period" that begins 3 months before the month in which they become eligible (for most people this is the month in which they turn 65), the month they become eligible, and the 3 months following their eligibility month (7 months total).

If you do not choose to enroll in Part D during your initial enrollment period, you can still enroll in Part D plan, but only between October 15 and December 7 each year, which is the "annual coordinated election period." you may also have to pay a late enrollment penalty as described in the "Is participation required?" question above.

8. Can I change Part D Plans?

You may only change to a different Part D plan between October 15 and December 7 each year.

9. I'm married, do I apply with my spouse, or do I apply by myself?

If you are simply enrolling in a Medicare Part D plan, then you enroll by yourself. Your spouse will enroll separately. However, if you want to apply for Medicare Part D "extra help" program (also known as the Low Income Subsidy), you may apply as a couple.

Extra help is a program designed to help limited means Medicare participants with their Medicare Part D costs. There is an application process for the Medicare Part D extra help that is separate from Medicare Part D plan enrollment. Not all Medicare participants will be eligible for the extra help program, but all Medicare beneficiaries may participate in Medicare Part D. For more information on the Medicare Part D extra help program, see "What if I cannot afford my Part D costs?".

10. Which drugs will Medicare Part D Plans cover?

It depends on the particular Part D drug plan the Medicare beneficiary chooses. The government does not require every Part D plan to offer the same list of drugs. Instead, each drug plan will design a formulary, which is a list of drugs the plan will cover. All formularies must include coverage of certain drugs commonly prescribed to Medicare beneficiaries.

Although plan providers have a great deal of freedom in choosing which drugs to cover, the law prohibits coverage of certain categories of drugs including, but not limited to be following:

• Barbiturates
• Benzodiazepines
• Drugs that can be paid for through Medicare Part A or B
• Drugs used for weight loss, weight gain, or anorexia
• Nonprescription drugs
• Prescription vitamins except prenatal vitamins and fluoride preparations

11. Can a Part D Plan Provider change which drugs they cover?

Yes, a Part D plan provider may remove drugs and change a plan formulary (the list of prescription medications covered under a plan) any time from March to mid-November. From mid-November to February, a plan may not remove any drugs from its formulary or change a plan's cost structure. Throughout the remainder of the year, plan providers must notify affected participants in writing about changes to their drug plan 60 days before the changes go into effect.

12. What if I need a drug that is not covered by my Part D plan?

When shopping for a Part D plan, you need to examine each Part D plan available in your area to find the plan that best meets your prescription needs. Unfortunately, you may discover that no plan covers all the drugs that you need. Moreover, you may choose a plan based on your current medication needs, but your health conditions and medication needs might change after enrolling in the plan.

If you face these types of difficult situations, you will need to consult a physician to determine whether your plan's formulary (list of covered drugs) includes an alternative, equally effective medication. If no alternative medications are appropriate, you may choose to request that your plan provider make an exception and cover a drug not included on your plan's formulary. Every plan will have a formal exceptions process that must be described in documents provided to you when you enroll in your Part D plan.

13. Where can I purchase prescription drugs if I enroll in Part D?

You will be able to purchase your covered prescription drugs through pharmacy networks established by your plan's provider. You should try to choose a plan that includes your preferred pharmacy in the plan's pharmacy network. If you purchase prescription drugs from a pharmacy that is not in your plan's pharmacy network, then your plan will not help pay for that drug.

This last point is worth emphasizing. Some plans may only provide pharmacy networks in their own region or only in select areas outside their regions. If you frequently travel outside of Wisconsin, you will need to plan your drug purchases carefully because your drug purchases in other states may not be covered. If you are one of these individuals, you may want to check to see if a Medicare Part D plan with national coverage is your best option.

14. How much will Part D cost?

It depends. Under Part D, participant payments for covered prescription drugs, also called out-of-pocket costs, will vary according to the drugs used, medication needs, and income level. You will likely pay a monthly premium for Part D coverage as well as a deductible and co-insurance. Each drug plan can create its own cost structure, put plan providers must follow a cost framework established by the government.

15. What can I expect to pay for my Part D Plan?

For the standard plan, the average monthly premium will be around $35 along with a $310 deductible, plus co-insurance and a gap in coverage. Some of the particular plans may differ in the costs they require for their participants.

16. What is the difference between a co-pay and co-insurance?

Co-insurance is when you pay a percentage for the cost of your prescription (i.e. 25% of each prescription). A co-pay is a set dollar amount that you pay for each prescription (i.e. $5 for each prescription).

17. Are the Part D Plans comprehensive or are there gaps in coverage?

It depends upon the particular plan, but according to a model presented by the government, there will be gaps in Part D coverage. Under the federal government's Part D cost model, a plan may charge you a deductible of $310 in 2011.

Once you have met the deductible or if the plan does not charge a deductible, you enter into what is known as the co-insurance phase. You now will pay either 25% of the cost of your drugs or an amount that is based on a tier structure. You remain in this phase until the full cost of your drugs reaches the amount of $2,840. This amount is calculated based on the full cost of your drugs, not just your out-of-pocket costs. In other words, what you and the insurance company has paid.

When the full cost of $2,840 is met, you now go into the gap. This gap in coverage is commonly referred to as the "doughnut hole." because of the recent reform in Health Care, in 2011 you will no longer have to pay the full cost of your drugs. There will be a 50% cost reduction on brand named drugs and a 3% reduction on the cost of generic drugs in this phase.

Once you have spent a total $4,550 out-of-pocket, the plan pays 95% and you pay 5%. This last part is referred to as "catastrophic coverage." It's important to note that these figures only include the cost of prescriptions covered by your drug plan. If your Part D plan does not include a particular prescription on its list of covered medications (known as a formulary) and you purchase that prescription, you will pay the total cost of the prescription and that amount does not count towards your Part D coverage limits.

The government calls this model the "standard plan." Providers will be allowed to make plan that are a little different from the standard plan, so your particular options may look different. It is also worth noting that if you qualify for "extra help" (the Part D financial assistance program), the government covers a significant portion of your Part D plan costs and you will not be required to make the same payments as other Part D standard plan participants.

18. What if I can not afford my Part D costs?

Help is available. Some Part D participants who have limited income and assets may receive help paying for their Medicare Part D drug costs. This assistance is known as "extra help." The Social Security Administration (SSA) will be mailing applications for the Medicare Part D extra help to individuals that may be eligible for this program. Anyone may also request an application for extra help or get answers to questions about this assistance program by calling SSA at toll-free 1-800-772-1213. The application for extra help is also available online at the SSA website. As of 2012, application will only be taken over the phone or online.

19. Will the rich pay more than the poor?

Very poor people qualify for a financial assistance program called extra help. Moderately poor and rich people will pay the marketed costs of the Medicare Part D plans. For more information about the likely cost structure for the standard Part D plan, see above "Are the Part D plans comprehensive or are there gaps in coverage?".

20. Why does it cost so much?

Medicare Part D is a complex, huge program, but it will provide help to many seniors. The current cost structure was designed by members of the United States Congress. To comment on this program, contact your Congressional representatives.

21. What if I am currently participating in a Medicare Savings Program such as SLMB, QMB, SLMB Plus, or a program that helps pay Medicare premiums?

If you are currently participating in a Medicare Savings Program such as QMB (Qualified Medicare Beneficiary), SLMB (Specified Low-Income Medicare Beneficiary), or SLMB+ (Specified Low-Income Medicare Beneficiary Plus) then you are automatically eligible for Medicare Part D extra help program.

Automatic enrollment will only happen if you currently are not participating in a plan. If you are currently in a plan, you must check to see if the plan participates in the Low-Income Subsidy program. If not, you may then change to one of these plans.

22. What if I am currently receiving prescription drug coverage through SeniorCare?

Currently, we do not know if SeniorCare will change after January 1, 2012. However, if you currently rely on SeniorCare and your term is about to expire this fall, you should sign up again so that you do not have a gap in coverage. Even if you do want to enroll in Medicare Part D, the earliest you can begin receiving Medicare Part D coverage is January 1, 2012. Make sure you do not go without coverage and re-enroll in SeniorCare.

23. If I currently receive prescription drug benefits through my Veterans Benefits, should I apply for Medicare Part D?

You have the option of enrolling in Medicare Part. However, you may want to stick with your Veterans Benefits because the VA coverage may be better than Part D coverage and is considered to be Creditable Coverage. Creditable coverage protects a Medicare beneficiary from a late enrollment penalty if they decide to enroll in Medicare Part D after their initial enrollment period.

Veterans Benefits are very complex, and we highly recommend that you consult with your County Veterans Service Officer, who can guide you through the process of accessing the benefits.