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Why Purchase Medicare Part D

Medicare has four parts. The original Medicare consists of Parts A and B, the original federal program. Part C is Medicare Advantage. Medicare Part D is prescription drug coverage, which helps cover the costs of medicine. Prescription drug coverage is optional.  Additionally, it is only available through private insurance companies approved by the federal government. While it is optional, Part D is offered to everyone who qualifies for Medicare. Costs, of course, can vary from plan to plan depending on the provider.

How to Get Medicare Part D?

There are two different ways to acquire Medicare Part D:

1. Purchase a standalone prescription drug plan. If you have Medicare Parts A and B, you can choose to add Part D to cover the costs of prescription drugs. The cost is separate cost from any existing coverage.

2. Purchase a MAPD.   Medicare Advantage Plans include Parts A and B.  And, many include prescription drug coverage.

What Does Medicare Part D Cover?

Each Medicare Part D plan has a list of approved drugs.   This list is the formulary.   Formularies identify what is covered and what is not covered. Plans sort their list of prescriptions into categories called tiers. Usually, drugs in a lower tier will cost less than drugs in a higher tier. The tiers often go from one to five or six.  Tier one is  low-cost.  These are typically common generic RX.  Tier five or six are specialty drugs.  These are the highest cost drugs and specialty medications. Not all medications are covered by Medicare Part D, however. Coverage may be limited due to medical necessity, availability, cost, or safety.

How To Enroll in Medicare Part D

Usually, if you qualify for Medicare, you qualify for Medicare Part D.  However, beneficiaries must have a qualify for a valid enrollment period.

• Your Medicare Initial Enrollment Period (IEP): You can enroll in a Part D plan in the 3 months you turn 65, the month of your 65th birthday or 3 months after.

• The Medicare Annual Enrollment Period (AEP): This runs from Oct. 15 to Dec. 7 every year. During the AEP, you may make changes to your Medicare Part C and Part D coverage. They will take effect on Jan. 1 of the following year.

• The Medicare Advantage Open Enrollment Period (OEP): This lasts from Jan. 1 to March 31 each year. You may add, drop or change your Part D coverage during this time.

• Special Enrollment Period (SEP): You may be able to enroll in a new Part D plan if you’re eligible for an SEP. You may qualify for an SEP under certain circumstances, such as if you make changes to a job-based drug coverage plan, or if you have or lose Extra Help.

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Medicare Supplement Plan G

Also known as Medigap Plan G, Medicare Supplement Plan G has been available for several years now. Another plan, Medigap Plan F, was very popular and was phased out in 2022. In its absence, Medigap Plan G has taken its place.

Medigap Plan G is one of the ten standardized Medicare Supplement Policies.  Plans are named in chronological order of the alphabet (A, B, C, etc.). Original Medicare does not cover all the treatments and services that many people need.  These policies are available to fill in the gaps. Any hospital, facility, or doctor that accepts Medicare will accept the Medigap Plan G. The vast majority of hospitals and doctors in the United States do accept Original Medicare.   Additionally,  Plan G is one of the plans that cover foreign travel.

What Does Plan G Cover?

Plan F, which is now unavailable, was considered the gold standard of Medigap Plans because it covered 100% of the gaps in Medicare. However, when it was phased out last year, Plan G soon became one of the most popular plans because it is almost as much coverage as Plan F. Medigap Plan G is nearly as much coverage, with one distinct difference. Plan G does not cover the Original Medicare Part B deductible, which was $233 in 2022. Even with the difference in coverage, beneficiaries of Medigap Plan G find it more cost-effective than Plan F when considering their respective premiums. Plan G covers everything that Original Medicare (Parts A and B) cover at 100% except for the Part B premium. This means that beneficiaries will pay nothing out of pocket for covered services and treatments after the deductible is met.

Medigap Plan G, much like Plan F, also covers “excess charges.” An excess charge is what happens when a doctor does not accept the full Medicare-approved amount for the payment, which can mean that they charge beneficiaries up to 15% more than the Medicare-approved amount for services or procedures. Since the year 2016, the following states have made excess charges illegal: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.

Some beneficiaries may prefer the High Deductible Plan G.   Click here to learn what a High Deductible Plan G offers. 

Click here to watch our training video about Plan G.

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How Do Medicare Supplement Plans Work?

Original Medicare consists of Part A and Part B, which are Hospital Insurance and Medical Insurance, respectively. Together, Medicare Parts A and B cover and pay for many, but not all, of the healthcare services and supplies that seniors will need. A Medicare Supplement plan will help pay for the beneficiary’s share of some things that Medicare does not cover.

Here are some important things to know:

• Medicare supplement plans are not the same as Medicare Advantage plans.

• Beneficiaries must pay a monthly premium for their Medicare Supplement plan in addition to the Part B premium from original Medicare.

• Private insurance companies that provide Medicare supplement policies cannot cancel the beneficiary’s coverage even if they have persistent health problems.

What Do Medicare Supplement Plans Cover?

Medicare Supplements help to cover costs not covered by Original Medicare. Each plan provides a range of benefits. Basic benefits can include the following:

• Part A coinsurance and hospital costs up to an additional 365 extra days after Medicare benefits are used

• Part B coinsurance or copayment

• Blood (first 3 pints)

• Part A hospice care coinsurance or copayment

Certain Medicare Supplement plans may include additional benefits such as:

• Skilled nursing facility care coinsurance

• Part A deductible

• Part B deductible

• Part B excess charge

• Foreign travel exchange (up to plan limits)

• Out-of-pocket limit

What Do Medicare Supplement Plans Not Cover?

While Medicare Supplement plans cover many things, there is a general list of procedures and services that they do not cover. This list includes the following:

• Long-term care (like non-skilled care you get in a nursing home)

• Vision or dental services

• Hearing aids

• Eyeglasses

• Private‑duty nursing

• Prescription drug coverage

Beneficiaries who need prescription drug coverage can find it under Medicare Part D. To get coverage for the previously mentioned products, and other goods and services, a Medicare Part C, a Medicare Advantage Plan, can be a good option.

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Does Medicare Offer Family Plans?

Many Americans are currently enrolled in family health care plans either through the exchange or through their employer-provided health insurance. It is not uncommon for entire families to be covered under one policy. Medicare, however, only provides individual coverage to single beneficiaries. Two spouses can be both enrolled in Medicare, but must each have their own individual plans. This means that beneficiary’s families will need separate coverage, because they cannot be added to the Medicare policy.

Therefore, the short answer is no, Medicare does not offer family plans. But it’s more complicated than that. Although over half of all Medicare eligible Americans aged 65 and older are married, Medicare is not dependent on marital status.

The beneficiary and their spouse must enroll in their own separate Medicare plans, at whatever time they become eligible as individuals. Married partners may even need to enroll at different times, depending on factors such as age, health, and disability. However, marital status can influence some Medicare costs.

The reason that marital status can influence some of the Medicare costs is this: for Medicare Part B, the combined household income is what is considered for determining the premium. In most cases, each beneficiary will still pay the standard monthly part B premium, which is $164.90 per month for this year (2023).   This premium is adjusted annually by the Centers for Medicare & Medicaid Services (CMS). If the beneficiary’s tax returns show a combined household income of $194,000, then each beneficiary will pay more for their monthly premiums. The higher the family’s combined annual income, the higher their individual Medicare Part B premiums will be.    The additional premium amount is known as the Part B IRMAA (Medicare income-related monthly adjustment amount).   Like the Part B premium, IRMAA amounts are also adjusted annually.

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What is a Medicare Advantage Plan

Original Medicare includes benefits for Part A (hospitalization) and Part B (doctor visits).  However, not all of a beneficiary’s needs may be satisfied.   (Click here to learn 5 things that are not covered.)  A Medicare Advantage Plan, also known as Medicare Part C or MAPD, can be an effective and financially smart way to ensure that senior citizens have the medical coverage they need going into their golden years.

While not part of the original federal health plan, Medicare Part C became law in 1982. The way it works is that the federal government pays private insurance companies a specific amount of money per person to bundle the original Medicare benefits. Many companies also add prescription drug coverage, or Medicare Part D, in their advantage plans. Some of these plans cover additional services than original Medicare, making them a smart choice for many senior citizens.

Because many Medicare Advantage plans work like private insurance plans, the options for them include:

• Health maintenance organization plans (HMOs)

• Preferred provider organization plans (PPOs)

• Private fee-for-service (PFFS)

Because of their connection to the federal plan, Medicare usually sets the fee for both the provider and the individual enrollee. But, for a PFFS plan, the private insurance company sets those fees. Medicare Advantage plans must follow Medicare rules and guidance from the federal government, though each private company can have different out-of-pocket costs or access to services. In addition, insurance companies can, and do, change the rules of their Medicare Part C (Advantage) plans each year.

Already a certified Medicare agent?   Work with a better FMO.   In addition to $500 monthly lead dollars, we offer every agent state of the art quoting, enrollment and tracking tools at no charge. Click here to get started.  

Who Needs Medicare Supplemental Insurance

One of the most common questions you will have to answer from your clients will be, “why do I need supplemental insurance?” This is a good question, and will allow you to explain exactly why supplemental insurance and/or Medicare Advantage plans make financial sense for many seniors.   Seniors have the option of adding Medicare Supplement or Medicare Advantage plans to fill the coverage gaps.

Medicare Part A and B cover many of the typical medical expenses of senior citizens. Some of these include visits to primary care doctors or specialists, laboratory tests, or hospitalization. These original parts of Medicare also cover stays in skilled nursing facilities, surgical procedures, and outpatient procedures.

However, Parts A and B do not cover all of a typical senior citizen’s expenses. For example, despite the near ubiquitous use of hearing aids in old age, Medicare does not cover hearing care, hearing exams, or hearing aids. Also not covered are dental care, dentures, vision care, routine foot care, or long-term care. Additionally, prescription drugs, for the most part, are not covered under the original Medicare but by Part D, which has to be purchased separately as supplemental insurance.

Therefore, if a senior citizen knows or anticipates that they will need any of the typical healthcare used by their demographic, such as hearing aids, glasses, dentures, or prescription medication, they would benefit from purchasing a supplemental insurance plan.

This video will help you determine whether a Medicare Supplement or Advantage plan best suits the needs of your client.   Click here to view. 

Already a licensed health insurance agent appointed to sell Medicare?   Learn what we offer our agents.

Interested in marketing Medicare Supplements and Advantage plans?   Click here to learn how to get started.

What is the difference between Part A and Part B of Medicare?

In order to help your clients choose the best healthcare coverage for their needs, you need to understand the coverage they already have: Medicare. There are four parts to Medicare.  Medicare Part A and Medicare Part B are provided by Medicare.  Those two parts make up the original federal health program.  Part A and B are referred to as Original Medicare.  Remember, Medicare is a US government entity.   Part C and Part D are purchased from private insurance carriers.

Medicare Part A is hospital insurance.  As hospital insurance,  Part A generally covers the following.

• Inpatient hospital stays

• Prescription drugs administered in the hospital

• Skilled nursing facility stays

• Mental health inpatient stays

• Hospice care

• Limited or temporary home health care

Medicare Part B is medical insurance.  As medical insurance, Part B generally covers the following.

• Annual wellness exams

• Doctor and specialist visits

• Preventative services (flu shots, etc.)

• Bone mass measurements

• Tests and screenings for certain diseases

• CPAP machines for sleep apnea

• Certain diabetes equipment and supplies

• Limited home health visits

• Durable medical equipment (walkers, wheelchairs, etc.)

This is not a complete list of the medical services covered by Medicare Part B.  However, it is a starting point to help your clients understand where their gaps in coverage are and how to choose supplemental insurance to address those gaps.

Click here to learn how to compare Medicare Advantage plans.

Click here to learn how to compare Medicare Supplement plans.

Medicare Advantage and Supplemental Sales Video

Five Things Medicare Does Not Cover

The reason that supplemental and advantage plans are so crucial is that Medicare Part A and Medicare Part B do not cover everything. Without sufficient insurance, this can mean out-of-pocket expenses and surprise bills later in life, when many people are on a fixed income.

Here are five things Medicare does not cover:

1. Long-term or custodial care. Custodial care includes the everyday tasks that a person may need help with as they age, which can include anything from getting dressed to putting in eye drops or using the bathroom.

2. Most dental care.  Even though dental health is an extension of physical health,  Medicare does not offer any benefits.  Click here to view standalone Metlife Dental plans.

3. Eye exams.  Vision care is not covered.   Many independent carriers offer standalone vision plans.

4. Dentures.

5. Hearing aids and the exams for fitting them.

There are tools that the government provides so that seniors can find out if a service or supply is covered under their Medicare Part A or B plan.  Click here to access the Medicare.gov coverage tool. 

Some other common services that are not covered by government-issued Medicare include the following.

• concierge care,
• retainer-based medicine,
• boutique medicine,
• covered items and services you get from an opt-out doctor or institution (except in the case of a qualified urgent or emergency need).

Note: If an individual is not present in the US, Medicare will not pay for Part A or Part B claims.   Additionally, that individual can not enroll in a Medicare Advantage plan or a Medicare Drug plan.

What Does Will Medicare Pay for?

Click here to learn with Medicare does pay for.

Medicare Donut Hole 2023

The Medicare Donut Hole 2023 is also known as the Part D coverage gap. The coverage gap occurs after the initial coverage period, when the beneficiary’s total drug cost reaches a specified limit. For 2023, the limit is $4,660.00. This cost includes a combination of what the beneficiary AND the insurance carrier has paid, which is why so many seniors can fall into the donut hole. Once people are in the donut hole, or coverage gap, they are responsible for a percentage of the cost of their prescribed medication(s).

What happens when the donut hole is reached?

Although beneficiaries are responsible for a percentage of the cost of their medication while in the coverage gap, they typically pay no more than 25% of the cost of approved, brand-name prescription drugs. Some plans offer even lower costs while in the coverage gap. The discount applies to the beneficiary’s plan negotiated pricing that specific drug. Although members pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as out-of-pocket costs. This helps get them out of the donut hole faster, because member costs count toward out-of-pocket maximum payments.

How do I get out of the donut hole?

Catastrophic coverage kicks in to cover the costs of medication once a beneficiary has spent $7,400 in out-of-pocket costs. This number includes what the beneficiary pays in covered medication(s) and some costs that are covered by family members, charities, or other persons on their behalf. During this period, beneficiaries will pay significantly lower copays or coinsurance for their approved drugs for the remainder of the year. These out-of-pocket costs that help them reach catastrophic coverage include:

• Their deductible

• What they paid during the initial coverage period

• Almost the full cost of brand-name drugs (including the manufacturer’s discount) purchased during the coverage gap

• Amounts paid by others, including family members, most charities, and other persons on their behalf

• Amounts paid by State Pharmaceutical Assistance Programs (SPAPs), AIDS Drug Assistance Programs, and the Indian Health Service

The Medicare Part D plan should keep track of how much money beneficiaries have spent out of pocket for covered drugs and their progression through coverage periods. This information should appear in monthly statements.

Note: Beneficiaries with Extra Help do not have a coverage gap. They pay different drug costs during the year. Drug costs may also be different for those enrolled in a SPAP.

Click here to learn more about Medicare Drug Pricing.

Medicare prescription drug prices

Every time you turn on the tv or talk to a Medicare beneficiary, you hear about Medicare prescription drug prices.  The actual cost of prescription drugs with a Medicare plan can have a lot of moving parts.

Here is a list of some things that determine what Medicare beneficiaries pay for their prescriptions each year:

1.  The premium for your Part D (if you have a stand alone prescription drug plan).  This cost varies depending on the carrier and plan coverage option you choose.  The price can be as little as about $7 up to about $100.  This all depends on your personal needs.
2. Most plans have an annual deductible for certain medications.  This depends on where the medication falls on the plan’s formulary.  In other words, what tier it is classified as (Most plans do not charge a deductible for Tier 1 medications).  In 2023 PDPs cannot exceed an annual deductible of $505 .
3. Copayments and coinsurance are the amounts you pay for covered drugs once you have met your plan’s deductible (if your plan has one).  The amount you pay for a copay or coinsurance depends on the tier level assigned to your medication by your particular drug plan.
4. If you hit the coverage gap (sometimes called the donut hole), you will not pay more than 25% of the cost of  covered brand name drugs.  Many people don’t reach the coverage gap. Once you and your drug plan spend a specified total amount of money for your prescriptions ( $4,660 in 2023), you reach the coverage gap. spent a certain amount for covered drugs. This amount may change each year.  Please note; people with Medicare who get Extra Help paying Part D costs do not fall into the coverage gap.

Some other things that effect the cost of your Medicare prescription drug prices:

1.  Medicare provides “Extra help” to individuals who have limited income and resources.  This is a program that helps pay for Medicare Part D costs including; premiums, deductibles and coinsurance as well as other costs.   It will also cover any late enrollment penalty that an individual may have incurred.  Some people automatically receive Extra Help if they are on full Medicaid coverage while others have to apply.  After you apply for extra help, you will receive a letter stating what level of help you will receive and how much you will pay for your prescriptions.
2. You may have to pay a late enrollment penalty.  The penalty is added to your (Part D) Medicare prescription drug plan premium. This penalty applies after the initial enrollment period is over; if there was a period of 63 or more days in a row where you did not have either Medicare Part D or other credible prescription drug coverage.
   In most cases, you will pay the penalty for as long as you have Medicare Part D.  Please note: this applies even if you have a $0 Medicare advantage plan.

   Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2023) by the number full months you didn’t have either Medicare Part D or other creditable drug coverage. The penalty amount is added to your monthly Part D premium by rounding to the nearest $.10.

3. Each prescription drug plan has it’s own monthly premium.  This amount varies by carrier and plan offered.  It can be helpful to enlist the help of a licensed Medicare agent to find a plan that covers your prescriptions best.

Important:  The inflation reduction act may change the amount Medicare beneficiaries pay annually for their medications; click here to learn more.

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What Does Medicare Part A Cover

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Does Medicare Cover Hospice ?

How to Qualify for Hospice Care:

Your clients qualify for hospice care if they have Medicare Part A and meet the following conditions:

• A hospice doctor (and regular doctor if applicable) certifies that they are terminally ill (defined as a life expectancy of 6 months or less).

• They accept comfort care (palliative care) instead of continuing to try to cure the illness.

• They sign a statement choosing hospice care instead of other Medicare-covered treatments for the terminal illness and related conditions.

Your clients can usually get Medicare-certified hospice care in their home or other live-in facility like a nursing home. They can also get hospice care in an inpatient hospice facility.

What is Hospice Care:

Depending on the terminal illness and related conditions, a hospice team will create a plan of care that can include any/all of these services:

• Doctors’ services.

• Nursing and medical services.

• Equipment for pain relief and symptom management.

• Medical supplies.

• Drugs for pain and symptom management.

• Aide and homemaker services.

• Physical therapy services.

• Occupational therapy services.

• Speech-language pathology services.

• Social services.

• Dietary counseling.

• Spiritual and grief counseling for you and your family.

• Short-term inpatient care for pain and symptom management.

• Inpatient respite care, which is care provided in a Medicare-approved facility (like an inpatient facility, hospital, or nursing home), so that the usual caregiver can rest.

• Any other services Medicare covers as the hospice team recommends.

What it Costs in Medicare:

• Clients pay nothing for hospice care.

• Clients pay a copayment of up to $5 for each prescription for outpatient drugs for pain and symptom management. In the case the hospice benefit doesn’t cover a drug, the client’s hospice provider should contact the Medicare plan to see if Part D covers it.

• The client may have to pay for board if they live in a facility and choose to get hospice care.

• To learn more about what is covered under Hospice Care, visit Hospice Care Coverage.

Find out what Medicare covers

Click  here to learn 5 things Medicare does not cover.

If you would like more information on Medicare enrollment, you can find it at Medicare.gov.

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