Know your Part D Benefits
How the Affordable Care Act impacts prescription drug expenses
The year is starting anew, and for many Medicare recipients, understanding the Affordable Care Act may be an important part of planning for the new years healthcare expenses. While the legislation focuses on prevention, adding benefits for Medicare recipients like coverage for annual wellness exams and some preventative services it also makes changes to the prescription drug benefit. With all these changes, the question on most members minds is, How does this impact me and my wallet?
If you have Medicare Part D (prescription drug coverage), your plan likely includes a donut hole, or a coverage gap. Once you and your plan have paid the established limit for covered medication (for 2013, the limit is $2,970), you have to pay all additional costs out of your own pocket. After you’ve reached your out-of-pocket maximum, known as the catastrophic coverage threshold (for 2013, the number is $4,750), the plan kicks in again and helps pay for prescription drugs.Starting in 2011, once Medicare Part D participants reached the donut hole, an automatic 50 percent discount was given on all brand-name drugs, along with a 7 percent discount on all generic brands. In 2013, that discount has increased to 52.5 percent for brand-names and 21 percent for generics. Each year, the savings will continue to increase.In 2020, the donut hole will close,and all Medicare recipients enrolled in Part D will receive a 75 percent discount on both brand-names and generics. If you participate in Medicare Part D, here are some things to remember:
- You will only receive discounts on prescription drugs that participate in the Medicare Coverage Gap Discount Program.
- If you have a Part D plan that already includes coverage in the donut hole, the new savings will be applied to the total amount remaining after your current coverage is applied. For example, if your supplemental plan covers 60 percent of the cost of brand-name prescriptions and you purchase a $100 brand-name drug, the 2013 discount of 52.5 percent will be applied to the remaining $40, making the amount you owe $19.
- If you’re taking part in Extra Help a program that helps people with limited incomes cover the cost of prescription drug plan costs you do not qualify for these discounts.
- You will receive an Explanation of Benefits notice in the mail every time you use your prescription drug coverage. Read it carefully to make sure you’re getting the discounts you’re entitled to; if not, you can appeal.
- Even though you’re only paying 47.5 percent on brand-name drugs in 2013, the entire drug cost goes toward the total you need to qualify for catastrophic coverage.
Visit medicare.gov or call 1.800.MEDICARE (1.800.633.4227) for more information.