Below is some information about Medical D. If you have any question about Medicare D and your medications, call us, we can help!

Enrollment

Enrollment for most beneficiaries is voluntary. The initial enrollment period took place from November 15, 2005 through May 15, 2006. Potential beneficiaries who did not enroll by the May 15 deadline (or within a given time frame after their initial eligibility date) incurred a late enrollment penalty of 1% per month based on the average cost of the premium until their enrollment.

Annual enrollment periods for Medicare Part D begin on November 15th of the prior plan year. The initial enrollment period for the second year of Medicare Part D started November 15, 2006. In its first year, beneficiaries eligible for both Medicaid and Medicare (dual eligible's) were transferred from Medicaid prescription drug coverage to a Medicare Part D plan on January 1, 2006. Enrollment in January 2008 was 25.4 million, which was 6.2% higher than the 2007 enrollment. (An additional 14.2 million Medicare beneficiaries received drug coverage from other sources such as veterans benefits and retirement plans.
As of 2008 there were 1,824 stand-alone Part D plans available. The number of available plans varied by region. The lowest was 27 (Alaska) and the highest was 63 (Pennsylvania & West Virginia). This allows participants to choose a plan that best meets their individual needs. Plans can choose to cover different drugs, or classes of drugs, at various co-pays, or choose not to cover some drugs at all. Medicare has made available an interactive online tool called the Prescription Drug Plan Finder that allows for comparison of drug availability and costs for all plans in a geographic area. The Prescription Drug Plan Finder can be used to perform a personalized or general search for plans; in either case, the tool allows one to enter a list of medications along with pharmacy preferences. The Plan Finder output includes the beneficiary's total annual costs for each plan, along with a detailed breakdown of the plans' monthly premiums, deductibles, and prices for each drug during each phase of the benefit design (initial coverage period, coverage gap, and catastrophic coverage period). Plans are required to update this site with current prices and formulary information every other week throughout the year. Some enrollees criticize the Prescription Drug Plan Finder as complex to use, especially for many Medicare beneficiaries who have limited computer skills and Internet access. Nonetheless, use of this tool is essential in order for people to make an informed choice considering the actual costs for each plan.

Beneficiary cost sharing (deductibles, coinsurance, etc.)

The MMA establishes a standard drug benefit that Part D plans may offer. The standard benefit is defined in terms of the benefit structure and not in terms of the drugs that must be covered. In 2008, this standard benefit requires payment of a $275 deductible. The beneficiary then pays 25% of the cost of a covered Part D prescription drug up to an initial coverage limit of $2,510. The defined standard benefit is not the most common benefit offered by Part D plans. Only 10 percent of plans for 2008 offer the defined standard benefit. Most eliminate the deductible and use tiered drug co-payments rather than coinsurance.

Once the initial coverage limit is reached, the beneficiary is subject to another deductible, known officially as the Coverage Gap but referred to more commonly as the "Donut Hole," in which they must pay the full cost of medicine. When total out-of-pocket-expenses on formulary drugs for the year, including the deductible and initial coinsurance, reach $4050, the beneficiary then reaches catastrophic coverage, in which he or she pays $2.25 for a generic or preferred drug and $5.65 for other drugs, or 5% coinsurance, whichever is greater. The $4050 amount is calculated on a yearly basis, and a beneficiary who amasses $4050 in out-of-pocket costs by December 31 of one year will start their deductible anew on January 1. Most low-income subsidy patients are exempt from all or part of the donut hole and the deductible.

The only out-of-pocket costs that count toward getting out of the coverage gap or into catastrophic coverage are True Out-Of-Pocket (TROOP) expenditures. TROOP expenditures accrue only when drugs on the enrolled-in plan's formulary are purchased in accordance with the restrictions on those drugs. Any other purchases do not count toward either the coverage gap or catastrophic coverage. Monthly premium payments do not count towards TROOP.

Among Medicare Part D enrollees in 2007 who were not eligible for low-income subsidies, 26% had spending high enough to reach the coverage gap. Fifteen percent of those reaching the coverage gap (4% overall) had spending high enough to reach the catastrophic coverage level. Enrollees reaching the coverage gap stayed in the gap for just over four months on average.
It should be noted that the thresholds above related only to the "standard" defined benefit structure. Individual health insurance providers often offer their own variations of the standard benefit (sometimes known as "enhanced" benefit plans) that may eliminate the deductible phase completely and/or extend the Initial Coverage limit to shrink the size of the donut Hole. Typically, the premiums for these enhanced plans are higher to offset the increased benefit.

For 2008, the percentage of stand-alone Part D (PDP) plans offering some form of coverage within the doughnut hole rose to 29 percent - this is an increase from 15 percent in 2006. The percentage of Medicare Advantage/Part D plans (MA-PD) plans offering some form of coverage in the coverage gap is 51%, up from 28% in 2006. The most common forms of gap coverage cover generic drugs only.
Most plans use specialty drug tiers, and some have a separate benefit tier for injectable drugs. Beneficiary cost sharing can be higher for drugs in these tiers.
Excluded drugs

While CMS does not have an established formulary, Part D drug coverage excludes drugs not approved by the Food and Drug Administration, those not for use in their medically accepted indication, drugs not available by prescription for purchase in the United States, and drugs for which payments would be available under Parts A or B of Medicare.
Part D coverage excludes drugs or classes of drugs which may be excluded from Medicare coverage. These may include:

• Drugs used for anorexia, weight loss, or weight gain
• Drugs used to promote fertility
• Drugs used for erectile dysfunction
• Drugs used for cosmetic purposes (hair growth, etc.)
• Drugs used for the symptomatic relief of cough and colds
• Barbiturates
• Benzodiazepines
• Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations
• Drugs where the manufacturer requires as a condition of sale any associated tests or monitoring services to be purchased exclusively from that manufacturer or its designee

While these drugs are excluded from basic Part D coverage, drug plans can include them as a supplemental benefit, provided they otherwise meet the definition of a Part D drug. However plans that cover excluded drugs are not allowed to pass on those costs to Medicare, and plans are required to repay CMS if they are found to have billed Medicare in these cases.