Let’s take a look at an important aspect of Medicare coverage: Part D, which covers prescription medications (think “D” for drugs). Each Medicare Prescription Drug Plan has a unique list of covered drugs which is called a formulary.
Here are some important notes regarding Medicare Part D coverage:
Drugs may be placed into different cost “tiers” within the specific formulary
More common/generic drugs will often be in a lower tier costing you less
You can choose your Part D plan based on your current list of medications to help you obtain the most appropriate plan for you
Commercially available vaccines that are medically necessary to prevent illness must be covered by a Medicare drug plan (if not already covered under Medicare Part B)
You should receive an “Evidence of Coverage” (EOC) each September from your plan which explains what your Medicare drug plan covers, how much you pay, etc.
You should review this notice each year to determine if your current plan will continue to meet your needs or if you need to consider another plan for the next calendar year
If you do not receive this important document, contact your plan representative
Your plan’s contact information should be available via “Personalized Search” on the Medicare website
You can also search by your plan name
Common Coverage Rules:
Prior Authorization: Your prescriber may be required to show that the drug is medically necessary for the plan to authorize coverage
Quantity Limits: Different medications may have limits on quantity fillable at one time (ex: 10 days, 14 days, 30 days, 60 days, etc.)
Step Therapy: You must attempt treatment with one or more similar, lower cost drugs before the plan will cover the prescribed drug
If you or your prescriber believe one these coverage rules should be waived, you can contact your plan for an exception. Your plan’s contact information should be available via “Personalized Search” on the Medicare website.
You can ask your prescriber or other health care provider if your plan has special coverage rules and if there are alternatives to an uncovered drug
It is not uncommon to be required to attempt treatment with other similar drugs (often less expensive, lower tier) on your formulary first
You can obtain a written explanation from your plan which should include the following:
Whether a specific drug is covered
Whether you have met any requirements to be covered
How much you will be required to pay
If an exception to a plan rule may be made if requested
You can request an exception if:
You or your prescriber believes you need a specific drug that is absent from your plan’s formulary
You or your prescriber believes a coverage rule should be waived
You believe you should pay less for a more expensive, higher tier drug since your prescriber believes you cannot take any of the less expensive, lower tier options for your condition
If you disagree with your plan’s denial of coverage there are five additional levels in the appeals process
Additional Considerations:
Your Medicare Part D plan is allowed to make changes to its formulary during the year
These changes must be made within existing Medicare guidelines
If a change is made to your formulary:
You must be provided written notice at least 60 days prior to the effective date of the formulary change
OR your plan will be required to provide the current drug for 60 days under the previous plan rules
Many Medicare Advantage Plans (Part C) cover prescription medication coverage, and you cannot have concurrent coverage of prescriptions through both a Medicare Advantage Plan and a Medicare prescription drug plan. You’ll be unenrolled from your Advantage Plan and returned to Original Medicare if you have an Advantage plan with prescription coverage in addition to a Part D Prescription Drug Plan.
Even if a desired medication is covered, it is important to note that some plans may require fulfillment via mail order services in lieu of local retail pharmacy pickup
This may be very inconvenient for some (ex: people that travel often) and may be avoidable when comparing plans
If you have any questions, please contact your financial advisor at The Center. We are more than happy to help you or refer you to one of our professional resources.
Josh Bitel, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.
Sources: www.medicare.gov this information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.
Any opinions are those of the author and not necessarily those of Raymond James. Raymond James is not affiliated with Josh Bitel. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.