Medicare Part D
To round out the coverage’s on Medicare we will now look at Part D. Instituted in 2006, this is the primary way for Medicare enrollees to get help with prescription drugs. Like Medicare Advantage, all of the Part D plans are administered by private insurance companies. There are two ways you can get your part D. First if you are enrolled in original Medicare, you would have what is referred to as a “stand alone” Part D or “PDP”(prescription drug plan). If however you are enrolled in a Medicare Advantage plan that contains a Part D component within the plan, you are then in a MAPD (Medicare Advantage Prescription Drug).
First we take a look at the technical aspect of Part D. All part D’s have the same fundamental framework. This framework consists of four stages of coverage. The first stage is the deductible or the amount you need to pay before the plan begins to pay. Not all plans contain a deductible but there is a standard deductible that changes each year. Next is the initial coverage stage. During this phase of coverage, when you fill prescriptions, you pay an amount and the insurance pays an amount towards the total cost of the drug. Some plans work with a copay amount and others work with a coinsurance amount. The difference is a co-payment is a fixed amount whereas coinsurance is a percentage of the drug cost. This stage continues until the total cost, what you paid AND what insurance paid reaches the annual coverage limit. At this point you have reached the dreaded “doughnut hole”. This term simply means you have exhausted the initial coverage limit of the policy. During the doughnut hole stage you pay a percentage of the cost of the manufacturers’ discounted price and the government covers some of the cost. This stage continues until you reach an out of pocket drug costs that changes each year. At this point you are in the final stage which is the catastrophic stage, where again your insurance policy begins to cover the drug costs. During this stage you pay a copay or co-insurance for name brand and generic drugs.
First we take a look at the technical aspect of Part D. All part D’s have the same fundamental framework. This framework consists of four stages of coverage. The first stage is the deductible or the amount you need to pay before the plan begins to pay. Not all plans contain a deductible but there is a standard deductible that changes each year. Next is the initial coverage stage. During this phase of coverage, when you fill prescriptions, you pay an amount and the insurance pays an amount towards the total cost of the drug. Some plans work with a copay amount and others work with a coinsurance amount. The difference is a co-payment is a fixed amount whereas coinsurance is a percentage of the drug cost. This stage continues until the total cost, what you paid AND what insurance paid reaches the annual coverage limit. At this point you have reached the dreaded “doughnut hole”. This term simply means you have exhausted the initial coverage limit of the policy. During the doughnut hole stage you pay a percentage of the cost of the manufacturers’ discounted price and the government covers some of the cost. This stage continues until you reach an out of pocket drug costs that changes each year. At this point you are in the final stage which is the catastrophic stage, where again your insurance policy begins to cover the drug costs. During this stage you pay a copay or co-insurance for name brand and generic drugs.