Probably one of the most confusing parts of Medicare.
Would be Part. D plans. And so what I'm going to do.
During this brief.
Video is talk about the cost of the plans.
And the coverage.
In other words, how.
These plans work
Welcome to Medicare School Daily, where we help you understand.
Medicare.
Save money, avoid making Medicare mistakes,
and above all else, get the most out of your Medicare benefits.
Now, today's topic is understanding Medicare.
Part D Plans, prescription drug plans.
So first off.
You need to understand that not all medications.
Are going to be covered by Medicare.
Medicare covers
Most prescription drugs, but not all.
Prescriptions. Medicare doesn't cover any type.
Of medication that would be a natural type of a med.
It's not.
Going to cover things that.
Are going to be supplements.
It's going to have to be something that would be a synthetic medication.
And so not all medication are covered.
I've had clients before.
That.
Had what's called irritable bowel syndrome,
and there may be seven different meds available, but Medicare is.
Only going to cover. Maybe four of those meds.
So just because you're taking it now doesn't necessarily mean
it's going to be available for you once you go on Medicare.
Now, more than likely, yes, you will be able to get it, but
not always.
And so we want to make sure you understand that Medicare has.
Not approved.
All medications to be on the plans.
Number two, very important, not.
All medications will be in every plan's
Formulary.
When you get a prescription drug plan, the most
Important Decision is to make sure your medications
are covered.
And so there will be in any given market, anywhere from 15 to
Maybe 30 different drug plans Available.
Every advantage plan has the option of having an embedded drug plan.
So when we look at plans and we make these decisions the
Formulary is The most Important Decision.
And so you have to understand then
That every plan is not going to have every Medication.
And so that's really What we're deciding.
We're taking your medications And making Sure
To see if we can Find a formulary.
Where those meds are going to
Be covered because formularies are going to vary in size
Some plans may Cover 3500 Medications.
Another plan formulary may have 5000 meds, another one may have 7000 meds.
So when you see Price variations
Within the premiums of drug plans, it's because of the size of the
Formulary All right.
And so that's why not all
Medication covered in every single plan.
Thirdly, copay Cards are
Usually notice we underline usually void on Medicare.
Many of you That are covered by employer plans.
Or maybe individual plans and you're not yet 65, you may have a co-pay
Card for a very expensive Medication.
That may retail for 2000 or 5000.
You're getting that for a $5 co-pay or $25 copay.
Almost always those plans become void once you're on Medicare.
In fact, you read the fine print
or you read on the back of the card or at the bottom of the card.
It will usually say
These cards are no longer valid.
Once you're On Medicare.
Now there may be a way to get your
Meds at a reduced. Cost, but that may be through foundations
or some kind of a pharmaceutical assistance plan of the state
or maybe the manufacturer.
Has. Some kind of a plan, but usually copay.
Cards are going to be void.
Once you go on Medicare.
And then fourthly, out-of-pocket expenses, meaning what you pay,
we call those co-pays, can change throughout the year.
This is one of the most confusing and the biggest surprises
that people have when they go on Medicare.
They realize that their co-pays.
Fluctuate throughout the Year.
And the reason for that is because Medicare
Has four
Potential stages in each of these stages.
That you Go through
Can result in a Different co-pay.
All right.
So to understand that, you really have to understand the.
Different stages.
Now, before I show you those stages, I want to make just a quick comparison.
If you're right
Now, are covered by an employer provided.
Plan where you have an individual plan.
You don't have Four stages on your plan.
That's only Medicare plans, group plans and individual plans below
65 have one stage.
So what happens in those plans?
Group plan individual plans below 65 is a medications
Covered Usually has a
Tiering number one, two, three, four, five.
And that tier
Number lets us know what our co-pay. Is.
And so if I'm on that plan
Say I have a tier one at $5 or a tier three at $50 co-pay.
That co-pay on those plans will be fixed throughout the whole year.
Again group plans and individual plans, fixed co-pays, one stage plans.
So my $5 co-pay doesn't change throughout
The year or my $50 co-pay Doesn't change throughout the year. But when you go on
Medicare, Medicare has four Stages.
So that means I could have the same medication,
that the co-pay could change up to Four times In one year.
So Medicare co-pays fluctuate group plans, individual plans are fixed.
So let's understand real quickly the stages that you go through.
First off, we have a deductible stage. Stage one that means that our co-pays Are
Applied to the deductible. Now I'm recording This video in 2022.
You may be watching it now Or next year.
But the whole point is every year Medicare sets a deductible. This year In 2022 that deductible $480.
Doesn't mean you have to show up and write a check necessarily.
For $480 It just simply means that your co-pays are applied
to the deductible, and if We ever reach that deductible this year $480
then we would be done in stage one and we would move to stage two.
But if my co-pays never reach the Deductible, I never go beyond stage one.
I stay in that stage.
But if I reach my deductible then I go to stage two.
This is called the initial coverage stage.
This is when you just simply.
Have a very reasonable copay.
And so we pay co-pays for our medications.
But what's happening is you pay your co-pay.
Behind the scenes.
Medicare is tracking the full retail cost of the medication.
You didn't pay full retail, you paid a co-pay.
And the difference in that retail cost was covered by the insurance company.
So in this stage, what they're doing, they meaning Medicare
along with the pharmacy, they're tracking the full retail cost.
What the insurance company paid and what you pay combined.
And if that number ever reaches a certain dollar amount,
It's a total amount retail, not
Your cost, but retail, if it ever reaches that dollar amount.
That's called. The threshold.
The threshold this year is $4,330.
So if I reach in retail cost $4,330,
not your cost, but total retail if I reach that number 4000 330.
Then I will be done in this stage and I will move to the next stage.
Now, the fact is 95% of all people never go beyond stage one or stage two.
But about 5% of the Medicare population will finally reach that retail threshold.
And when they do, they go to stage three which,
Is officially by Medicare called the coverage gap, laymen's
We call it the donut hole. And
While we're in the donut hole What's going to
happen is we're going to pay a flat 25% of the retail
Cost to the medication in the donut hole.
Again, only 5% Of all people get there.
But those who are
there in this stage will pay 25% of the retail costs.
So if I'm on a medication
that retails for $100 in the donut hole, it'll cost me $25 co-pay.
If I'm taking a medication
that retails for $500, I'll have a co-pay of $125.
And so we pay 25% of the cost in the donut hole.
Now they track a whole new number in the donut hole that is $7,050.
Only 1% of all the Medicare population gets there.
So I'm not going to go into that in this video.
But the point is, if I ever get to that $7,050 number,
then I am done in the donut hole in the coverage gap
and then I will go to stage four,
which is called catastrophic coverage.
Now here, everyone's happy.
Medications are dirt cheap because here in stage four,
my co-pay is a flat 5%
of whatever the retail cost of the medication is.
OK, so I just pay 5%.
So that's why I can be on one medication
that if I move all the way through the stages
because of that retail cost, my co-pay can change
four different times throughout the year.
Now, the likelihood
most of you would never see the donut hole or catastrophic.
Only 5% of all people do.
Only 1% ever even get to catastrophic.
All right. So that's what makes
the whole Medicare Part D plan so confusing
because we have stages, group plans and individual plans.
One stage Medicare has four stages.
And notice these reset every January.
So we may hit the donut hole
in July or we may hit the donut hole in November.
We may hit it in February whenever we hit it.
And then we're going to start all those stages over again
the following year.
All right. So that's the way those work.
And then also want to make sure you understand
as we talk about cost and coverage,
that Medicare has this very important opportunity
for you to be able to change your drug plan if you need to.
That opportunity is called the Medicare Annual Enrollment Period.
Those dates are very specific.
It's etched in stone every October 15th through December 7th.
If you want to
change your drug plan or you want to change your Advantage plan
that has a drug plan included, this is when you have to do it.
So here's the process of changing because
about 15 to 20% of the Medicare population
will change their drug plan on an annual basis.
And so what's going to happen in this process
is whatever drug plan you're on this year
will mail you a packet of information called an ANOC
that stands for Annual Notice Of Change.
They'll, have that mailed to you.
You'll receive it around the 15th of October,
and now
you have the next seven weeks to review the plan
and see if you need to switch the plan.
And so what you're looking for when this annual notice
of change comes, is you're looking for changes.
Now, listen, there are people all the time that get the ANOC
and they just throw it away.
They assume that because they like their plan
this year, they'll like it next year.
Never do that
because Medicare gives that company that insurance Part D plan
the right to change anything they want.
You may like the plan this year, but you may hate it next year.
And that's why that annual notice of change is important.
Open up, see what they're doing.
And so what could they do?
Well, number one, they could change the premium.
And every now and then we'll see a company
drastically raise the premium I've seen him
double the price or triple the price.
And so you may like the premium this year,
but you may not like it next year.
They will disclose that in the annual notice of change.
Number two,
you're going to make sure
that all your medications are still covered.
Why? Because Medicare gives those companies
the right to change the formulary.
They can add meds, they can drop meds,
and so they can change that formulary
so if there's a formulary change, if you don't know about it,
you may be very disappointed when you go to pick up
your prescription on the new plan in January
and you realize that medication is no longer covered.
And so that's again, why you open the ANOC to see
if your medications are still covered.
And then lastly, you're
going to make sure that your meds have not been re tiered
Medicare plans like group plans and individual plans
will have every medication
that they're going to cover be given a tiering number.
That's usually tier one, two, three, four or five.
And that tiering
number, let you know what your co-pay is in that stage two.
And so what happens is from year to year,
those companies can re tier medication
one year may be a tier two and they bump a two,
tier four or two, tier three, they bump to Tier five.
And I have seen tiering changes like that raise the co-pay
about 150, hundred and $75 every single month.
So now a medication that was reasonable one year
because they've been re tiered is now going to be very expensive
All right.
So you're going to be watching for these change.
And so if we have something
that is hurting us with the change that companies made,
then you're going to switch to plan.
We just have to make sure that that switching is done
by December seven.
All drug plans are for one calendar year, just like Advantage plans,
one calendar year.
And if we want to switch those plans
that we have seven weeks towards the end of the year
where we make the decision to switch.
But that new plan that we have selected
will not go into effect until the following January 1st.
All right.
And so it's very important to make sure that, you know, that
if you need to switch to drug plan, this is when we need to do it.
And again, many will not need to.
So if we've gone through the ANOC we're still happy with the plan
premiums, fine. Meds are still covered.
Everything is tiered properly, then you do nothing.
The plan will automatically renew
without you doing anything whatsoever.
All right.
But if you need to switch, then this is the time
that we need to do it.
So this is the way in which Part D plans work differently than
Your group plans, individual plans.
So once you go on Medicare, you got to live with these
particular guidelines.
Hey, thanks so much for watching the video,
and I do hope that it was helpful.
Now if you feel like
you need to learn more about Medicare
to make sure you're making the right Medicare decision,
really the best way and the easiest way to do
that is to go to MedicareSchool.com.
That's MedicareSchool.com,
and you'll be given the opportunity to be able
to click on Get the Free Workshop.
We call that the essentials workshop
and I do all the teaching.
And there you'll learn all the ins and outs of Medicare
to make sure that you have an accurate
and thorough understanding of how Medicare works.
The second thing you can do
is click where it says, talk to a Medicare guide,
and there
you can actually set up a time
where you can discuss your situation
with a Medicare guide.
They'll explain all your options
and actually even walk you
through the enrollment process as well,
if that's what you need to do.
And so go to MedicareSchool.com,
watch the workshop or talk to a Medicare guide.
It would be our privilege to assist you further.