Medicare prescription drug coverage (Part D)

Most Common Types of Medicare Advantage Plans

There are various types of Medicare Advantage plans. The two most frequently used are:

  1. HMOs (Health Maintenance Organizations). HMOs have closed provider networks and you usually have to get all care within your plan’s network except for emergency services. You choose a primary care doctor (PCP) who manages all of your medical care. These plans often require a referral for specialist care and prior authorization for certain tests and procedures from your PCP. HMO plans almost always include prescription drug coverage (Part D).
  2. PPOs (Preferred Provider Organizations). PPOs also have provider networks, but you can still go to any provider that takes Medicare. However, your payment is substantially less out-of-pocket, when you stay in the network. You will not need referrals for a specialist and you don’t have to pick a primary care physician (PCP). Most PPO plans also include prescription drug (Part D) coverage.

Other Types of Medicare Advantage Plans

  1. Private Fee-for-Service (PFFS) Plans. Senior Healthcare Advisors offer Medicare PFFS plans, as a Medicare Advantage Plan. PFFS is a type of Medicare Advantage Plan (Part C) that is not the same as Medigap or Original Medicare. The plan determines how much it will pay hospitals, doctors, and other health care providers, and what your cost is when you get care.

With a PFFS, you do not have to choose a PCP (primary care physician), nor do you need a referral for a specialist. PFFS may cover prescription drugs, however, if your PFFS Plan does not offer prescription drug coverage, you can enroll in a separate Medicare Drug Plan (Part D) to get coverage.

“You can go to any Medicare-approved doctor, other health care provider, or hospital that accepts the plan’s payment terms, agrees to treat you and hasn’t opted out of Medicare (for Medicare Part A and Part B items and services). Not all providers will.” – (2022).

  1. Medicare SNPs are a type of Medicare Advantage Plan (like a PPO or HMO). Medicare SNPs cover only people with specific characteristics or diseases The benefits of Medicare SNPs are tailored to their provider choices and drug formularies that best meet the specific needs of the groups they serve. Sometimes, SNPs cover out-of-network services and some do not. Check with your Senior Healthcare Advisors (855-824-6618| TTY 711) or your plan to see if they cover services out of network, and if so, how it affects your costs. Medicare SNPs normally have specialists in the conditions or diseases that their members are affected by.

Your Costs With Medicare Advantage

Each Medicare Advantage differs, so it’s not easy to give you a snapshot of your costs. Each private company that offers you a plan can decide what to charge you for premiums, copayment amounts, and deductibles.

Some Medicare Advantage plans have what is called a “zero premium”, meaning that it does not add any additional premiums over what you are paying already for Part B.

**You have to have both Medicare Part A and Part B to enroll in a Medicare Advantage plan.**

Costs Breakdown

  1. To switch to a new Medicare Advantage Plan, simply choose which plan you want to join during one of the enrollment periods. You’ll automatically be disenrolled from your old plan at the start of your new plan’s coverage.
  2. Unless you have other prescription drug coverage, we suggest that you carefully consider Medicare prescription drug coverage (Part D). Remember, you may only be able to switch at certain times of the year.

Medicare Advantage: Maximum Out of Pocket (MOOP)

Every Medicare Advantage plan must have an out-of-pocket maximum to protect you. Medicare defines the maximum allowable amount for this Out-of-pocket benefit each year.

An important feature of Medicare Advantage plans is the MOOP – maximum out-of-pocket. This limits the medical cost you could be responsible for in a plan year.

Why is this important? For Medicare Advantage (2022), your maximum out-of-pocket limits for in-network services can reach up to $7,550. If you use an out-of-network service, you could have a MOOP of $11,300. Medicare covers only 80% of the cost of your Part A and Part B benefits. This means that you are responsible for the other 20%. 20% can be a great deal of money. For example, if you have a $150, 000.000 hospital bill, you would owe $30,000.00.

When you review a potential Medicare Advantage plan (Part C), look at the MOOP on that plan. Many people ask us to compare Original Medicare vs Medicare Advantage plans. Original Medicare does not have any MOOP to protect you. You could pay that 20% forever. So if you cannot afford the more comprehensive Medigap plans, then a Medicare Advantage plan at least has an MOOP to protect you. For many folks, this makes Medicare Advantage coverage a more attractive option than Original Medicare alone.

Is There A Catch To Medicare Advantage?

Medicare Advantage plans have proven repeatedly that they are the answer to many of the healthcare needs that arise with Medicare beneficiaries.

But don’t take our word for it, the Kaiser Family Foundation (2022) research revealed on average 32,600 Medicare beneficiaries search the internet for the best Medicare Advantage plan daily.

Medicare Advantage plans, or Part C, are fully loaded with all the benefits of Part A and Part B. It is mandated by law.

Be assured that Medicare Advantage plans are authorized by the federal government which proves that it is not a scam and that they are just trying to help you.

Medicare Advantage plans are not magic plans with free benefits. They are also not from thin air. These plans are funded by Medicare which maintains those benefits using your monthly Part B premium.

Medicare Part D Prescription Drug Plans

Each Medicare prescription drug insurance plan includes its list of which drugs are covered. This list is called a drug formulary. 

Drugs on the formulary are differentiated by tiers. These tiers have different costs for the drugs that fall under each category. A drug on one tier may be lesser or more expensive than a drug on another tier.

Your Medicare Advantage is an all-in-one prescription drug plan. If you do not have Medicare Part C (Medicare Advantage) you must enroll in a stand-alone Medicare Part D prescription drug plan.

  • Plans may have annual deductibles. This is the cost you are required to pay before your plan helps pay for your medications. However, Medicare applies a cap on your deductible, in other words, a yearly maximum deductible amount.
  • Medicare Supplement insurance plans do not cover prescription medications.
  • Part D drug plans must cover a large range of prescription drugs that people with Medicare take including most drugs in protected classes.
  • They must provide notification when you place a refill request. In addition, they must provide you with at least a month’s supply under the same plan rules.
  • The result of a change may require you to either change the drug that you are currently taking or pay more for it. If these options are not feasible, you can also ask for a formulary exception. A formulary exception is completed by your doctor. It is a request to the plan to continue to provide your drugs because of medical necessity if they are no longer on the plan’s formulary.

There are Two Ways to Enroll in Medicare Part D

  1. Through a stand-alone plan or PDP for short. This plan is just a drug plan. Nothing more. You will pay a premium for this plan in addition to any premiums that you may pay for your original Medicare (Part A and Part B).
  2. Through a Medicare Advantage plan with prescription drug coverage or MAPD for short. Medicare Advantage plans (Medicare Part C) combine all the benefits of original Medicare plus additional benefits like dental, vision, hearing, and prescription drug coverage.

Given the changes in Medicare Advantage and Part D plan benefits, prescription drug formularies can change, and premiums increase. Each September, you will receive an Annual Notice of Change (ANoC) letter explaining all of the upcoming year changes that affect your plan. Then you have a chance to choose another plan if you are unhappy with the future adjustments to your existing plan.[1]

More about Medicare Advantage Prescription Drug Plan

  • A Medicare drug plan can make changes to the drugs that it offers during the year if it follows Medicare guidelines. These changes can come about because of factors such as therapy changes, new drugs being released, or new medical information.
  • Joining a Part D plan is voluntary. However, there are consequences if a Medicare beneficiary does not enroll in a drug plan when they first become eligible for Medicare. The consequence is a late enrollment penalty that accrues over time. This late enrollment penalty grows in dollar amounts the longer the beneficiary continues without enrolling in a drug plan. This penalty is calculated and added to any future premiums for Medicare coverage in the future.
  • The only exception to this is if you have other prescription drug coverage outside of Medicare that is as good as Medicare’s. This includes coverage from a current or former employer or if you receive benefits through Medicaid.

***Disclaimer: A Senior Healthcare medical specialist has reviewed this information. It is for educational purposes only and is not intended to replace the advice of your doctor or other health care provider. We encourage you to discuss any questions or concerns you may have with your provider.

[1] (2022). Plan Annual Notice of Change (ANOC).

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