If you’re reading this, then you’re likely looking to learn more about Medicare Part D. Medicare Part D is a federally regulated prescription drug insurance program that is operated through private insurance companies. These companies offer prescription drug coverage to Medicare beneficiaries. Many wonder how Medicare Part D works on its own and how it can be provided as an added coverage to a Medicare Advantage plan. Read on to learn more about Medicare Part D, how it compares to other parts of Medicare, and precisely how it works with Medicare Advantage.
What is a Medicare Part D Prescription Drug Plan?
Medicare Part D prescription drug plan is a federally regulated prescription drug plan that is offered as insurance coverage to Medicare beneficiaries. The plans are then offered by private insurance companies and are provided with precise guidelines outlined from The Centers for Medicare and Medicaid Services (CMS). These guidelines change yearly and are communicated to the plans offering the coverages, for them to set up the plan’s structure before it is offered during Open Enrollment, which falls on October 15th to December 7th of each year. The plans then use the guidelines and create a structured policy that incorporates the guidelines provided by CMS, to set up a cost-sharing structure unique to the insurance company offering the plan. The plan will also have a specific formulary of medications that they cover. It might even have a preferred pharmacy network that will offer the policyholder the best cost-sharing arrangement for the prescriptions covered under the formulary of their unique policy.
What is a Medicare Advantage Plan?
Since you’re wondering, a Medicare Advantage Plan is an all-in-one alternative to a traditional Medicare plan. Private insurers offer these types of plans and contract with CMS to offer health insurance benefits alternative to Original Medicare for those who qualify for Medicare. Some of the additional benefits provided with a Medicare Advantage policy can include extra benefits not offered with Original Medicare such as:
– Hearing aids, routine dental, vision care, and other benefits according to the plan specifics.
– Possible lower cost-sharing and premiums than Original Medicare, while using the coverage.
– Limits on the amount you have to pay out of your pocket.
Many Medicare Advantage Plans also include Part D prescription drug coverage included in their plan. As mentioned previously, the Medicare Advantage plans might even include benefits not covered by Medicare, like routine dental care, consistent eye exams, glasses, hearing aids, and other plan-specific benefits.
Types of Medicare Advantage Plans
There are many various types of Medicare Advantage plans that cover different needs. Different Medicare Advantage plans can charge monthly premium amounts and have different prices for out-of-pocket costs. Some of these plans include:
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
- HMO Point-of-Service (HMOPOS)
- Special Needs Plans (SNPs)
- Private Fee-for-Service (PFFS)
- Medical Savings Account (MSA)
Most Medicare Advantage plans fall under two categories. These are HMO or Health Maintenance Organization, and PPO, which stands for Preferred Provider Organization. HMO policies usually require individuals to stay within their network of doctors. Typically, the HMO plan’s cost is less, as the plans have a contract with the network providers that require them to charge the insurance company a certain amount for each covered service. HMO plans are a reliable option, as long as the providers you desire to see are within the network. A PPO plan, much like an HMO plan, has a network of providers and connections. However, unlike the HMO, the PPO plan gives you the option of going outside the provider network, typically at a higher cost-sharing.
How to Measure the Quality of Your Medicare Part D or Medicare Advantage Plan
Medicare typically uses a five-star rating system to assess the quality of Medicare Advantage and Part D plans, with five stars being excellent, four being above average, and three being average. These ratings are based on various factors, including how well the plans helped members manage their care, chronic disease management, member satisfaction, and how often members get screening exams, vaccines, etc. The ratings are then posted on the Medicare plan finder website. Around 36% of all plans score a four or above on the rating system, ensuring above average prescription drug coverage for those using Medicare Advantage and Part D together.
Medicare Part D alongside Medicare Advantage: How Do They Work?
If you are currently taking essential medications, or feel as if you might need some in the future, then it is wise to invest in a Medicare Part D Plan. You can enroll in either a stand-alone Medicare Part D Prescription Drug Plan, or enroll in a Medicare Advantage Prescription Drug plan (or known as Medicare Part C). A Medicare Advantage Prescription Drug plan covers the same Medicare Part D benefits to help you get your prescription drugs. If you do not sign up for a Part D plan, you might be forced to pay out of pocket, unless you have another insurance backup. To enroll in either one of these plans, you must sign up during your initial enrollment period, which occurs during the same enrollment period for Original Medicare. You are also able to enroll in either plan during the open enrollment period, which takes place between October 15th to December 7th of each year.
If you decided to enroll in Parts A & B (Original Medicare), you’d pay your Part B premium and deductible. You’d also pay your Part D premium and deductible if you decide to enroll in Part D. In addition, you will also pay the coinsurance that is required by Medicare, which is usually 20% of the service’s cost. With a Medicare Advantage plan which might include a Medicare Part D prescription drug coverage, the plan will have a more specific cost-sharing setup and will have an out of pocket maximum that is built into the coverage.
Please see our Medicare Advantage page on our website, which will explain more in-depth about how having a Medicare Advantage can benefit a Medicare-eligible recipient.
If you have any questions or concerns about how Medicare Part D works alongside Medicare Advantage, give Healthcare American a call today!
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