Medicare Part D Explained | (And How To Avoid The Donut Hole)

Part D of Medicare is something I get asked a lot of questions about it can often be one of the most confusing parts of Medicare to understand today I'm going to break down how Medicare Part D works we'll be talking about the doughnut hole or the coverage gap as well and whether or not that's something you need to worry about so stay tuned hi.

My name is Stefanie apt I am an independent insurance broker and I specialize in helping seniors all across the country to navigate the world of Medicare I try to put out videos about all of the different parts of Medicare as well as Medicare plans and if you find value in the videos I'll ask you to take just a second and subscribe to the.

Channel you can like the video and be sure to leave your questions in the comment section below I love to read those and I'll be sure to reply Medicare Part D is the part of Medicare that covers your prescription medications and you can get Medicare Part D benefits either through a standalone Medicare Part D prescription drug plan or through.

A Medicare Advantage plan that includes prescription drug benefits either way the Part D coverage you get will be pretty similar Medicare Part D has different coverage levels or phases and includes a coverage gap or a doughnut hole so today I'm going to talk about how that all works we're going to break down the different Medicare Part D.

Phases of coverage and how those work we'll talk about the doughnut hole or the coverage gap and whether or not you need to worry about it and finally we will talk about how to find the best Medicare Part D plan to cover your specific medications and meet your specific needs Medicare Part D plans all have different phases of coverage so.

There's a deductible phase there's you are initial level coverage phase there's the coverage gap or the doughnut hole and then there's the catastrophic coverage phase it's important to know that Medicare Part D plans are calendar year renewable plans so every Part D plan renews and resets every January first including the.

Phases and most Medicare beneficiaries will only ever get to that first or second phase in a given year when it comes to insurance the deductible is the amount that you have to pay out of your own pocket before the insurance kicks in so for Part D this means that you'll have to pay the full cost of your medications until you've met that plans.

Deductible before the Part D plan is going to kick in in 2020 the standard drug deductible for Part D plans is four hundred and thirty five dollars per year now some Part D plans have lower deductibles and some have $0 deductible but the vast majority of Part D plans have a deductible of about four hundred and thirty five dollars in 2020 so a lot.

Of people's reaction to that is what that is a high deductible I'm not even taking that many medications I'll never even meet that deductible the good news is that many Part D drug plans even if they're showing that they have a four hundred and thirty five dollar drug deductible actually have a zero dollar deductible on your lower level generics.

Like your tier 1 or tier two generic medications so if you're taking only tier 1 and tier two medications it's very likely that that deductible may not even apply you however if you're taking a brand name medication or in most cases at tier 3 or higher then you will have to pay the full cost of that medication at the pharmacy before your drug plan.

Kicks in and remember deductibles reset along with your plan every January 1st after this deductible phase of coverage comes your initial level coverage phase and this is generally the phase you want to stay in so after you've met your deductible now when you're in the level coverage stage you're just going to pay a set copay or a set coinsurance.

Amount that's been established by your drug plan for your specific medications the amount you pay will depend on which tier your medication falls under and the tiers have been established by the drug plan and they can vary a little bit from one drug plan to another because these tier categorizations can vary a little bit between Part B drug plans.

We recommend using your drug list to shop every year and find the best Part D plan for your specific medications and I'm going to talk about that some more in a little bit after the initial level coverage phase comes the donut hole now there's been a lot of talk about the donut hole is closed or the doughnut hole is supposed to close in 2020 but.

Really there still is a coverage gap and most people think of that as the donut hole so whether you want to call it the donut hole or the coverage gap I'm going to break down what you can expect your medication cost to be if you get to this coverage phase during the year now keep in mind most people will never reach the coverage gap phase of coverage recent.

Studies stated that only about 10 percent of Medicare beneficiaries actually reach the donut hole or the coverage gap this coverage gap comes after a certain spending threshold the spending threshold dollar amount can change and in 2020 the spending threshold is four thousand and twenty dollars and that is the spending limit.

That gets you into the coverage gap so every month when you refill your medications you're going to your pharmacy and you're paying a certain amount for your medications and the insurance company is paying the rest once the total amount that you and the insurance company together have paid equals four thousand and twenty dollars.

You've reached that spending threshold and you're now in the coverage gap phase of coverage and when you're in the coverage gap in general you're going to now have to pay 25 percent of the cost of your patience and that comes off of the price that your insurance company has set with the pharmacy that you use for that drug.

So let's say for example you're taking a medication that has a $400 retail price and you are in the initial level coverage phase paying maybe a forty five dollar copay for that medication now that you're in the coverage gap you will have to pay 25 percent of the costs of that medication which equals 100 dollars so now you're paying $100 for this.

Medication when before you were paying $45 so you can see that your drug costs can really jump when you're in the coverage gap the items that count towards getting you to the coverage gap are any amount that you've paid into your deductible your co-pays and your coinsurance for your covered medications things that don't count towards getting.

You to the coverage gap would be the monthly premium that you have to pay for your drug plan any amount that you pay for medications that aren't covered and any amount that you would pay for medications that are at a completely out of network pharmacy now some Medicare beneficiaries will actually come out of the coverage gap can get to the final.

Coverage phase which is called catastrophic coverage this part gets a little bit tricky once you've spent six thousand three hundred and fifty dollars in 2020 you are now in catastrophic coverage the reason it gets tricky though is that in order to get to catastrophic coverage Medicare only counts the costs that are going towards.

Your troop which stands for your true out of pocket or your total out of pocket these are examples of the out-of-pocket costs that are counting towards your troop or your true out-of-pocket so these are the cost that will help you get to the catastrophic phase of coverage and the amount you've paid into your deductible your co-pays.

And coinsurance when you're in your initial level coverage phase almost the full cost of the brand name medications that you've purchased during the coverage gap but for generic drugs it only counts the amount that you paid for the medications in the coverage gap not the full cost once all of these costs add up to six thousand three.

Hundred and fifty dollars in 2020 you're now in the catastrophic coverage phase and in this phase generally your prescription drug costs go down in this phase you'll only pay 5% of the cost of your medications or three dollars and sixty cents for generic medications or $8.95 for brand name medications whichever is higher the coverage gap is.

Pretty lousy and no one's ever happy if they get there it is better than it was in years past it used to be when Medicare Part D was first established that you had to pay the full cost of all of your medications when you were in the donut hole so how can you avoid the donut hole well I'm going to share some tips with you the first and most.

Important tip is to shop your Medicare Part D drug plan every year as I mentioned earlier in the video different Part D drug plans can categorize different medications into different tiers which can in turn determine how much you have to pay for the cost of your medications additionally there are certain Part D.

Drug plans that offer more coverage during the coverage gap than others if you're going to fall into the doughnut hole it can be hard to avoid however there are some plans that can reduce your out-of-pocket costs so you definitely want to actively shop your plan every year and that's something that we do as a free service for all of.

Our Medicare supplement and Medicare Advantage clients and I'm also going to link a video in the description below that shows you how to shop and find the best Medicare Part D drug plan on your own using the Plan Finder tool another tip is to pay cash for some of your medications if the costs are low enough now if you pay cash for your.

Medications instead of using your Medicare Part D drug plan those costs will not count towards that spending through hold that gets you into the coverage gap so it's always a good idea to ask your pharmacy what the cash price would be for that drug and see if it is the same or maybe less than what the set copay or.

Coinsurance amount is that's been set by your Part D plan there are many pharmacies like local grocery stores that offer very very low cash pay prices for generic medications so it's always a good idea to check there you also could try using websites like good rx comm to find free coupons for your medications and blink is.

Another resource that you can look into and these websites and resources offer you free coupons to get pretty big discounts on certain prescription medications so if you're taking a lower level generic you can sometimes find that the costs are lower if you pay cash or use one of these coupons then if you use your drug plan for that medication.

And have it be counted towards your total out-of-pocket to get to the coverage gap in general Medicare Part D can be kind of complicated depending on what medications you take however the good news is that you can change your Part D plan every year there's an open enrollment every fall it's called the Medicare annual election period where.

You can change your Part D plan and choose a new Part D plan and that's between October 15th and December 7th if you have more questions about Medicare Part D be sure to check out the links in the video description below and you can always feel free to call or email us at any time thank you so much for watching and we'll see you soon.


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