Medicare News

November 2023 Edition

My goal with this newsletter is to:

1
Keep You Informed I will be sharing current articles about the changes in Medicare.
2
Answer Your Questions I'm available to answer issues specific to you.
3
Stay Connected I want to make Medicare coverage as simple as possible.

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Medicare Part D Drug Coverage Benefits Overview

Medicare Part D is prescription drug insurance. There are two ways to get this Medicare prescription drug coverage. How it works depends on your other Medicare coverage.

Medicare Part D and Original Medicare: If you have Original Medicare (Part A and/or Part B) and a Medicare Supplement Plan, you buy a stand-alone Medicare Part D plan from a private health insurance company to get prescription drug coverage. You can shop for your choice of stand-alone plans each year, which vary in terms of cost and coverage. You'll pay a separate premium for the Part D plan, and many also have an annual deductible.
Medicare Part D and Medicare Advantage: Medicare Advantage, sometimes called Medicare Part C, is a "combined" or bundled alternative to Original Medicare and is sold by private health insurance companies. Medicare Advantage plans cover all of the benefits of Part A and Part B and the client has copays for these services. Most of these plans also include prescription drug coverage. If you have a Medicare Advantage plan, you usually do not buy a separate, stand-alone Medicare Part D plan, as the Part D coverage is bundled in the Medicare Advantage plan. There are exceptions for certain less common Medicare Advantage plans that don't include their own prescription drug coverage, but that is rare.

Four Phases of Medicare Part D Coverage

(Applies to both stand-alone Part D plans as well as Part D plans that are bundled in a Medicare Advantage plan):

The "Donut Hole" - Although this sounds like a sweet treat, this is actually not a good thing when it comes to Medicare. While Original Medicare (Parts A & B) DOES NOT cover prescription drugs, it does help subsidize the cost of those drugs. It does this by allotting an "allowance" to each Medicare beneficiary, beginning on January 1 of each year. The allowance in 2024 is $5,030 for each person on Medicare, whether they have their drug plan built-in to their Medicare Advantage plan or have a Medicare Supplement plan and a stand-alone Part D drug plan.

Here are the four phases of Medicare Part D and their associated costs:

Phase 1: Deductible

Your plan won't start to pay for your covered drugs until you meet the annual deductible. On many plans the deductible may not be applied to the Tier 1 and/or Tier 2 generic drugs. The maximum deductible allowed by law is $545 in 2024. You enter the next phase when you hit the deductible.

Phase 2: Initial Coverage

During this phase, you pay copays or coinsurance for covered drugs, depending on where the drug falls in your plan's formulary. You enter the next phase when you and your plan have spent a combined total of $5,030 in 2024 for covered drugs.

Phase 3: The "Donut Hole"

During this phase, rather than the copays or coinsurance on the plan's formulary, you pay up to 25% of the cost of covered drugs. This phase is also called the "coverage gap". You will enter the final phase when you've spent $8,000 in 2024 for covered drugs.

Phase 4: Catastrophic coverage

During this phase, you pay 5% of the cost of your covered prescription drugs, or $4.15 for generic drugs, or $10.35 for brand-name drugs in 2023, whichever is higher. This phase continues until the end of the year. 2023 is the last year for the 5% coinsurance during the catastrophic coverage phase. The Inflation Reduction Act eliminates that coinsurance starting in 2024.

The moral of this story is that the more you can work with your doctor and/or pharmacist to take GENERIC drugs, the less likely you will be to get into the Donut Hole and have to pay 25% of the cost of your drugs.

Reminder – Annual Open Enrollment is from October 15 – December 7, 2023. If we haven't already spoken, and you have questions about your Medicare plan and possible changes for 2024, please visit my website at www.themedicareanswerguy.com, click on contact and schedule an appointment.

Jim Robeson CLU, ChFC	Medicare Made Easy 10755 Scripps Poway Pkwy #617 San Diego, CA 92131\| (858) 935-9120 jim@themedicareanswerguy.com themedicareanswerguy.com
Disclaimer – We do not offer every plan available in your area. Currently, we represent 10+ organizations and over 100 products in your area. Please contact Medicare.gov or 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.

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