Most Part D drug plans have a coverage gap (also called the “donut hole”). There is a limit on what the drug plan will cover for your prescription drugs when you are in the donut hole. The donut hole begins after you, and your drug plan has spent $4,430 in 2022 for covered drugs. This amount changes yearly. Once you reach the donut hole, you will pay 25% of the cost of brand-name prescription drugs. Even though you will only pay 25%, almost the full price of the drug will count as out-of-pocket costs to get you out of the donut hole. Your 15% and what the manufacturer pays (95% of the drug’s cost) will count. You will pay 25% of the price for generic drugs, and your Part D plan will pay the remaining 75%. How the coverage for generic drugs is different than how it does for brand-name drugs. Only the 25% you pay for generic drugs will count toward getting you out of the donut hole. Things that count towards getting you out of the donut hole: Your yearly deductible, coinsurance, and copayments The discount you get on brand-name drugs in the coverage gap What you pay in the coverage gap Things that don’t count towards getting you out of the donut hole: – The drug plan premium. – Pharmacy dispensing fee. – What you pay for drugs that aren’t covered. Call Kevin Leinum about how enrolling in a Medicare Advantage or Medicare Supplement plan can reduce you…

The date the coverage becomes effective depends on which enrollment period you used to sign up for your Part D plan. If you sign up for a Part D plan during the Annual Enrollment Period, which runs from October 15th through December 7th, your coverage will be effective January 1st of the following year. If you sign up for a Part D plan during the Open Enrollment Period (OEP), there are only certain situations in which you can do this, which runs from January 1st through March 31st; the coverage will be effective the first of the month after you submit your enrollment. For example, if you sign up in January, your Part D coverage will be effective February 1st. If you sign up when you turn 65 during your Initial Enrollment Period (IEP), your coverage will be effective the first of the month of your birthday month. For example, if you turn 65 on September 8th and submit your enrollment application in August, your Part D plan will be effective on September 1st. If you turned 65 but were still working and deferred your enrollment in Medicare because you had health insurance provided by your employer, your coverage will begin the first of the month following your enrollment in a Part D plan. If you enroll in a Part D plan during a Special Enrollment Period. The effective date of your coverage will generally be the first of the month following your enrollment.

Suppose you don’t enroll in a Part D prescription drug plan or a Medicare Advantage plan that includes Part D coverage when you are first eligible for Medicare. In that case, you may be assessed something called the Part D late enrollment penalty. The late enrollment penalty is an amount is added to your Part D premium, and once it is incurred, it never goes away. You will be assessed a late enrollment penalty if, at any point, after your Initial Enrollment Period is over, you don’t have Part D coverage or other creditable prescription drug coverage for 63 or more days in a row. The amount of the Part D late enrollment penalty depends on how long you did not have Part D or creditable prescription drug coverage. The amount is calculated by multiplying 1% of the “national base beneficiary premium” ($33.37 in 2022) times the number of full, uncovered months you did not have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium. The national base beneficiary premium can change every year, and as a result, the penalty amount can change each year. The Part D penalty takes effect as soon as you enroll in a Part D Prescription Drug plan after a break of 63 days or more. Let expert Kevin Leinum help you understand the many parts of Medicare and determine the right fit for you.

If you have original Medicare, Part B will cover telehealth services, and you will have to pay a 20% coinsurance of the Medicare-approved amount for your doctor or other health care provider’s services after you pay the Part B deductible. You will have to pay the same amount for most telehealth services as if you received the service in person. Due to the Coronavirus (COVID-19) pandemic, Medicare has allowed doctors and other health care providers to use telehealth services to treat COVID-19 (and for other medically reasonable purposes) from offices, hospitals, and places of residence (like homes, nursing homes, and assisted living facilities). Medicare coinsurance and deductibles still apply; however, healthcare providers are reducing or waiving those amounts in some cases. If you are enrolled in a Medicare Advantage plan, they must, at a minimum, provide the same benefits provided under Medicare Part A and Part B, so the same telehealth services are available. Depending on the Medicare Advantage plan you are enrolled in, additional telehealth services may be available, and the out-of-pocket costs may be lower. Kevin Leinum – your local Medicare Expert – can help you understand the many parts of Medicare and determine what the right fit is for you. Give us a call to discuss the options available to you.

Below is a high-level outline of the various stages of Part D plans: Stage 1 – Deductible (not all Part D plans have deductibles) Stage 2 – Initial Coverage Stage 3 – Coverage Gap is also known as the Donut Hole Stage 4 – Catastrophic Coverage Once you have spent $7,050 in out-of-pocket costs in 2022, you move out of the donut hole into stage 4 or catastrophic coverage. Once you reach the catastrophic coverage stage of your Part D drug plan, you will only have to pay low coinsurance or copays for covered drugs for the remainder of the year. You will pay either a 5% coinsurance or $3.95 copay for generic medications and $9.85 for brand-name, whichever is lower while in the catastrophic stage. It is important to remember that even if you are in the catastrophic coverage stage, a 5% coinsurance can still amount to significant out-of-pocket costs if your prescriptions are very expensive. Call Kevin Leinum – your local Medicare Expert about what Medicare covers or how enrolling in a Medicare Advantage or Medicare Supplement plan can improve your coverage and reduce your out-of-pocket costs.