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What is Medicare Part D

If you are thinking about signing up for Medicare, you will need to ask the question; What is Medicare Part D.  Medicare Part D is prescription drug insurance.  This insurance will cover your medication needs. If you choose a Medicare Part D plan, you will pay a monthly premium to an insurance carrier for your coverage. The insurance carrier will send you an ID card to use at your  insurance provider’s network of pharmacies to fill your prescriptions. In most cases you will not pay full retail price for your medication, you will pay a copay (a percentage of the drug’s price).  The insurance carrier pays the remaining balance.

The federal government controls the Medicare Part D program:

Medicare Part D is administered through private insurance companies. These companies provide beneficiaries prescription drug coverage. This program began in 2006 and offers Medicare recipients a valuable benefit that saves them thousands of dollars on medication each year.  Beneficiaries can choose 2 ways to receive this benefit.

1.  They can enroll in a standalone prescription drug plan along with a Medigap/Medicare Supplement plan.
2.  They can choose a Medicare Advantage(Part C) plan that includes prescription drug coverage.

All Medicare Part D plans must follow guidelines set by the federal government.  This means, every insurance carrier who participates must submit it’s plan to the CMS/Centers for Medicare and Medicaid Services.  The carriers have to do this every year to have their plans approved before they can offer them to clients.

Each year the drug plan providers make changes to benefits; this includes the formulary, in network pharmacies, providers as well as costs.  The changes go into effect on January 1st.  Be sure to check your coverage during open enrollment every year.  This is important if you need to change your insurance provider.  If you do not check, it could end up costing you a lot.

Find the best prescription drug plan for you, click here

If you need help finding the right plan for you, please contact us either by phone at (203)796-5403 or by email at [email protected]

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Medicare Part D Income Penalty 2017

This post will explain the Medicare Part D Income Penalty 2017.

The cost of your Medicare Part D coverage will go up if, you reported an adjusted gross income of over $85,000. for a single person on your IRS tax return from 2 years ago.  For couples, your cost rises if the income you reported on your IRS tax return two years ago equaled more than $170,000. The income that Medicare uses to assess your Part D cost is your adjusted gross income as well as any other type of tax-exempt income you may have.

In fact, The rate you pay will change according to how high your income level is. The more income you have, the higher your premium for Part D coverage will rise.  Your normal part D plan premium payment will stay the same and you will continue to use the same payment method.  Medicare will automatically deduct any additional premium charges you receive directly from your Social Security check.  Medicare will send you a bill only if the additional premium amount is more than your Social Security check.

The additional premium uses a calculation that starts with the national base beneficiary premium of $35.63 for 2017. Below we have listed some examples of the rise in premium cost levels for Part D. The examples will help you figure out how much more you will pay for Part D coverage in 2017. Additional costs will not apply unless, your income is above the specified amounts.

 Additional premium costs for Medicare Part D in 2017, as calculated by income level as follows:

Medicare Part D Enrollment Penalty

How much is the Part D penalty?

The cost of the Medicare part D enrollment penalty depends on how long you go without Medicare Part D or creditable prescription drug coverage.

How do I know if there will be a Medicare part D enrollment penalty?

After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be. Most people will have to pay this penalty for as long as you have a Medicare drug plan. The exceptions would be for those that drop coverage or are approved for a drug help program such as MSP.

What if I don’t agree that I have a penalty?

You may be able to ask for a “reconsideration.” Your drug plan will send you a letter explaining how to appeal.  All appeals will be sent to a company called Maximus that will review appeals.  Maximus is the only company that can review them. As a result, you will need to wait until they make a decision. You must do this within 60 days from the date on the letter telling you that you owe a late enrollment penalty. Also send any documentation that supports your case.

Do I have to pay the penalty even if I think it is wrong?

You must pay the penalty until a decision has been made on the appeal. Failure to pay the penalty could result in termination of your enrollment.

How long does it take to decide on the appeal?

In general, Maximus (Medicare contractor) has 90 days to make a decision.

What happens if Maximus decides the penalty is wrong?

If Maximus decides you should not have a penalty, they will send you a letter stating that fact.   Your drug plan will then stop charging you the penalty and will send details regarding a refund of the penalty amount you already paid.

What happens if Maximus decides the penalty is correct?

They will send you a letter stating the penalty is correct. You will be forced to continue paying the penalty if you want to maintain you drug coverage.

Do you have a Medicare supplement plan (also called Medigap)?  If so, a high deductible plan F supplement may be a way to save money compared to your current supplement plan. CLICK TO LEARN ABOUT HIGH DEDUCTIBLE F PLAN SUPPLEMENTS

Medicare Part D Premiums

Medicare Part D premiums range from between $10 and $100 per month.  The amount depends on what plans  are available in your area as well as  the particular plan you choose. The maximum deductible in 2016 is $360. This is the amount you must pay out-of-pocket before Medicare will contribute to your prescription costs.

What is the Medicare Part D Penalty

If you have gone without Part D or other credible drug coverage for a period of 63 days or more after your initial enrollment period. You may owe a Medicare Part D Penalty.  What is the Medicare Part D Penalty –

With Medicare as with all insurance plans it is wise to know all the ins and outs before you start.  If you find a knowledgeable insurance agent to help you sort things out, you will be ahead of the game.  Here at Crowe and Associates our job is to help clients understand insurance.  We want you to feel confident that you have chosen the right policy for both your health needs and your budget.  That is why it is important that you are aware of any possible penalties that can cost you money.

The dollar amount of the penalty

Medicare will officially calculate your penalty based on the number of full months you went without coverage.   The penalty is 1% of the national base beneficiary premium multiplied by the number of uncovered months and then rounded to the nearest $0.10.  That amount will be added to your monthly part D premium.  (Note: Since the national benchmark premium may increase each year, the penalty amount will also change accordingly.

Click Here for a Part D Late Enrollent Penalty Reconsideration Request Form

You should mail both completed forms as well as supporting documentation to the address below:

MAXIMUS Federal Services
3750 Monroe Avenue, Suite 704
Pittsford, NY 14534-1302

Or faxed to:
Fax number: (585) 869-3320 or  toll free fax number: (866) 589-5241

Do you have questions or need assistance navigating the Part D late enrollment penalty reconsideration process?  Please contact the office at either 203-796-5403 or at [email protected] if you have questions or require additional information about insurance.

Medicare Part D Connecticut

In this post, we want to explain some things about Medicare Part D Connecticut.  We want you to understand as much as possible about the coverage that is available to you.  This way you can make an informed decision.  In fact,  Medicare Part D plans are Medicare drug plans offered by private insurance companies.  Medicare offers these plans either on a stand alone basis or as part of a Medicare Advantage plan.   Multiple insurance companies offer various part D plans.  The plans range in monthly premiums from as little as $12 a month up to $140 a month in Connecticut.  The Benefits (copays for drugs) also range greatly.  The prices for drugs vary from pharmacy to pharmacy.  You should make a list of all your medications and check which insurance plan includes the medication that you use.

Many people incorrectly think

That there is a Part D plan offered by the Government or Medicare.  Medicare only established the guidelines of what the base part D benefit and premium should be.  They do not have an actual Medicare Part D plan that a consumer can enroll in.  This must be done with a private insurance company.

Members are eligible to enroll in a Part D Rx plan when they turn 65 or first become eligible for Medicare.  They may also add, drop or make a change to an Rx plan every January during the Medicare Annual Election Period.

CLICK HERE FOR MORE MEDICARE INFORMATION AND RATES

Crowe and Associates is a full service brokerage.  In addition to Medicare, we offer clients a full range of medical, dental, life, home and auto insurance products.  We also offer advice on investment products including annuity and bridge loan products.

Please feel free to contact us with any insurance or investment questions.  We are here to help you.  You can contact us either by phone at (203)796-5403 or by email at [email protected]

We always get a lot of questions on Medicare Part D.  Here are some commons questions that we hear and additonal information on part D.  If you have other questions, please email Ed Crowe at [email protected]

1.  Popular Summer Medicare Part D Coverage Questions

2.  More on your Medicare Part D Coverage and the 2012 Donut Hole

3.  Average Retail Drug Prices

1.  Popular Summer Medicare Part D Coverage Questions

Question:  As we travel around this summer, will we still have Medicare Part D prescription coverage outside of our home state? Read more

We always get a lot of questions on Medicare Part D.  Here are some commons questions that we hear and additonal information on part D.  If you have other questions, please email Ed Crowe at [email protected]

1.  Popular Summer Medicare Part D Coverage Questions

2.  More on your Medicare Part D Coverage and the 2012 Donut Hole

3.  Average Retail Drug Prices

1.  Popular Summer Medicare Part D Coverage Questions

 Question:  As we travel around this summer, will we still have Medicare Part D prescription coverage outside of our home state?

Yes.  You can use your Medicare Part D prescription drug plan at any of your plan’s network pharmacies, and most Part D plans include more than 50,000 pharmacies in their network.  If you are in a remote area of the country and are having trouble finding a network pharmacy, you can always telephone your Medicare Part D plan’s Member Services department and ask them to help you find the nearest pharmacy (the toll-free number is on the back of your Member ID card). 

Question:  If I purchase prescription drugs while outside of the United States, and bring them back with me, will my Medicare Part D plan reimburse me for these drugs if they are on my Part D plan’s formulary?

 Probably Not.  Although you can always ask your plan for more information, the Medicare Part D program does not anticipate coverage for medications purchased outside of the United States. 

Question:  We just moved from North Carolina to Florida and our Medicare Part D plan was cancelled because of our relocation.  Can we enroll back into our same plan now (in July) or do we have to wait until November/December?

 You can enroll now into a new Medicare plan.  Most people are not allowed to change Medicare Part D prescription drug plans outside of the annual Open Enrollment Period (or Annual Election Period) that runs from October 15 through December 7 of each year.  However, a Special Enrollment Period is available for people who move to a new Medicare plan service area during the plan year and allows people to join a new Medicare prescription drug plan or Medicare Advantage outside of the annual Open Enrollment Period.   

 Question:  I will turn 65 in September and will be eligible for Medicare.  When is the best time to join a Medicare prescription plan?

 It depends on when you need your Medicare prescription plan coverage to begin.  Initially, you have a seven (7) month window of time to join a Medicare Part D or Medicare Advantage plan.  So if you enroll in a Medicare Part D plan within the three (3) months before the month that you become eligible for Medicare (for example, the 3 months before you turn 65), your Medicare plan coverage will start on the first day of your birthday month (or Medicare eligibility month).  If you join a Medicare plan during your birthday (or eligibility) month, your prescription drug coverage will start on the first day of the next month.  Finally, if you join a Medicare plan during the three (3) months after your birthday (or eligibility) month, your drug coverage will start the first day of the month following the month when you enroll.

 Did you have a question that needs answered?  No problem, you can email Ed Crowe at [email protected] for answers.

2.  More on your Medicare Part D Coverage and the 2012 Donut Hole

 Question:  How do I find out how much more money I need to spend before I exit this year’s Donut Hole?

 The easiest way may be to check your monthly Explanation of Benefits letter.  Your Medicare Part D plan regularly sends you an Explanation of Benefits (EOB) statement detailing your Medicare plan coverage.  You will notice that the letter is separated into sections and in Section 2, you will find information on your current stage of coverage.  You will also see a box in Section 2 of your EOB letter that is entitled, “What happens next?”  In this box, your Medicare plan shows the details of how much more you will need to spend before moving into the next stage of your plan’s coverage. 

 So if you are in the Initial Coverage stage, the “What happens next” area will tell you exactly how far away you are from your Coverage Gap (or Donut Hole).  If you are in the Donut Hole, you will see how much more money you will need to spend before entering the Catastrophic Coverage portion of your Medicare Part D plan.   

Question:  I have already reached my Medicare drug plan’s initial coverage limit of $2,930 and entered the 2012 Donut Hole, so do I now pay the difference between the $4,700 out-of-pocket limit and my plan’s $2,930 initial coverage limit before exiting the Donut Hole?

 Not exactly.  You will stay in the 2012 Donut Hole until your total out-of-pocket costs exceeds the $4,700 threshold – less any name-brand drug discounts you receive while in the Donut Hole.  As a note, there are two different numbers that are used to define your Medicare drug plan’s Donut Hole or Coverage Gap: (1) The total negotiated retail value of your medications:  When the total value of the retail cost of your drug purchases exceeds $2,930, you go into the 2012 Donut Hole. (2) Total Out-of-Pocket Spending:  After your actual spending for covered medications has reached $4,700, you exit the Donut Hole.  (Remember, the brand-name discount counts toward meeting this total out-of-pocket spending amount).

 For example, if you are in your Medicare Part D plan’s Initial Coverage Phase, purchase a medication with a $100 retail cost, and only pay a $30 co-payment out of your own pocket (the plan pays the other $70), you get $30 credit toward the $4,700 Donut Hole exit point and $100 toward your $2,930 Initial Coverage Limit.

Now when you are in the Donut Hole and you buy the same $100 medication, and your plan does not have any Donut Hole coverage, you are responsible for the full $100 drug cost.  However, this year, you will get a 50% discount on all brand-name drugs bought in the Donut Hole, or a 14% discount on generic drugs purchased in the Donut Hole.

 If your $100 medication was a name-brand, then you will pay only $50 – but, you will get the full credit for the $100 purchase toward meeting your $4,700 out-of-pocket threshold or Donut Hole exit point.

 On the other hand, if the $100 medication was a generic drug, you would pay $86 dollars and get credit only for the actual $86 you spent toward meeting the $4,700 Donut Hole exit point or out-of-pocket threshold.

Question:  Will the Medicare Part D plan’s Coverage Gap or Donut Hole really ever go away?

 Yes, but only to the extent that you will still pay 25% in the Donut Hole.  As many people know, the Medicare Part D Donut Hole is scheduled to “close” in 2020.  But medications will not be free when the Donut Hole is finally “closed”.  In 2020, the co-insurance or cost-sharing for both generic and brand-name drugs purchased in the Donut Hole will be no more 25% of the plan’s negotiated retail price.  So, if your 2020 Medicare Part D plan follows the CMS standard Medicare Part D parameters with 25% co-insurance paid during the Initial Coverage Phase, you will pay no more in the Donut Hole than you would pay during normal coverage and the Donut Hole will be effectively eliminated.

 On the other hand, if your 2020 Medicare Part D plan has a $0 (or low) co-payment for your medications during the Initial Coverage phase, and then you find that you are paying 25% of your medication retail prices in the Donut Hole, it may not seem as though the Donut Hole is “closed,” although it technically is.  

3.  Average Retail Drug Prices

 Question:  What does the “negotiated” retail drug price mean and why is it important?

 The negotiated retail drug price is the amount that you would pay for your medication at a particular pharmacy when you have a Medicare Part D prescription drug plan.  The negotiated retail price for a certain medication may be different from the pharmacy’s regular price, and it can be different from pharmacy to pharmacy and from Medicare Part D plan to plan.

For example, if you purchase a formulary medication like Lipitor®, you may see on your receipt a negotiated retail price slightly more or slightly less than someone who is enrolled in another Medicare plan.  And, if you were to go to a different pharmacy using your same Medicare plan, the negotiated retail price could also be slightly different.

 The negotiated retail price is important to you because your total annual negotiated retail drug costs are used to determine the point when you enter into your plan’s Donut Hole phase.  So based on the differences in negotiated retail price between plans, you may meet someone using the same medications, but entering the Donut Hole a short-time before or after you.  Also, if you are in the Donut Hole, you will receive a discount on the negotiated retail price of your formulary medications.  So, based on the negotiated retail prices, people in different Medicare plans will pay different discounted prices in the Donut Hole.

I get a lot of questions about the various Medicare penalties and how much they cost.  I will summarize them here and then provide a link to a site which provides the specific detail.  Here is the overview.

Everyone who qualifies for Medicare does not need to pay for Part A of Medicare.  Some people do not qualify for part A and they need to pay a premium if they want the coverage.  For them, part A costs $451 a month but for most people it costs $0

Medicare Part B costs $99.90 a month for most people.  It can cost less for some people and more for higher income earners.  For example, an individual making over $85,000 a year will pay $139.90. The scale tops out at $319.70 a month for those that make over $214,000 a year.

If you sign up late for part B, you will pay a 10% penalty for every 12 months you didnt have part B, for life.   If you are over age 65, actively working and getting health coverage, you do not need to sign up for part B.  If you are not actively working and getting retirment coverage over the age of 65, you should sign up for part B because the penalty will count for you.

There are two Part D penalties.  The first is for those that sign up late for part D drug coverage.  The penalty is 1% of the average premium for every month you do not have a part D plan.  The average premium is about $31.00 a month which puts the penatly at about 30 cents for every month you do not have a plan.  The penatly never goes away.

There is also a Medicare Part D income penalty.   The penalty starts at about $11.00 a month for those that make over $85,000 a year.  It is added on to the insurance plans premium every month.   Here is a grid of the penalty levels

CMS has a very good page which summarizes this information.  You can see it by clicking here.