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What is the Part D  Penalty for Late Enrollment?

What is the Medicare Part D Penalty for late enrollment?  A part D late enrollment is when a beneficiary is without Medicare part d prescription drug coverage or other creditable prescription and medication coverage for a period of 63 days or more. It is a penalty fee for those who are uninsured. Generally, the policyholder will have to pay the penalty for as long as they hold the prescription drug coverage.

The cost of the part D late enrollment penalty changes yearly because it is calculated based on national averages. Medicare calculates the fee by multiplying 1% of the “national base beneficiary premium” by the number of months that the policyholder did not have Part D of Medicare (or other creditable coverage). In 2023, the national base beneficiary premium was $32.74.

How Does a Policyholder Know If They Have to Pay?

Once the beneficiary joins a Medicare part D drug coverage plan, the plan will then calculate their late enrollment penalty.

Reconsideration

Sometimes, insurance companies can make mistakes. If the policyholder does not agree with the application of this penalty, then the drug plan can send information on how to request what is known as a “reconsideration.”  However, by law, the late enrollment penalty is considered part of the beneficiary’s Medicare premium.  The premium must be paid (including the penalty).  Otherwise, the beneficiary runs the risk being unenrolled from their coverage.

If the reconsideration ends up being decided in the policyholder’s favor, meaning that the late enrollment penalty is not valid, then the Medicare drug plan can and will remove the late enrollment penalty fee. The plan will then send documentation to the policyholder explaining what happened and whether or not they are eligible to receive a refund. On the other hand, if the Medicare Part D contractor evaluates the reconsideration and finds that the late enrollment penalty is valid, then they will instead send the beneficiary documentation explaining why they must pay the penalty as part of their Medicare premium.

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What Doesn’t Medicare Part D Cover?

Medicare Part D is prescription drug coverage, provided by private insurance companies licensed by the federal government. There are certain kinds of drugs that are excluded from coverage, however. Medicare coverage does not include the following:

• Drugs used to treat anorexia, weight loss, or weight gain

  • Note: Part D may cover drugs used to treat physical wasting caused by AIDS, cancer, or other diseases

• Fertility drugs

• Drugs used for cosmetic purposes or hair growth

  • Note: Drugs used for the treatment of psoriasis, acne, rosacea, or vitiligo are not considered cosmetic drugs and may be covered under Part D

• Drugs that are only for the relief of cold or cough symptoms

• Drugs used to treat erectile dysfunction

• Prescription vitamins and minerals (except prenatal vitamins and fluoride preparations)

• Non-prescription drugs (over-the-counter drugs)

How to Access Medicare Part D Coverage:

In order to avoid additional medical expenses, it is a good idea to work with your doctor and pharmacy to ensure that what they are prescribing you is covered under your private prescription drug coverage. The following are some ways to ensure this coverage:

• Before you go to the pharmacy, find out if your drug is on your plan’s formulary. If possible, ask your doctor to check that your prescription is covered. Otherwise, call your plan directly or check your plan’s website.

• Find out whether your plan places any restrictions on coverage, such as:

  • Prior authorization: you must get prior approval from the plan before it will cover a specific drug

  • Step therapy: your plan requires you try a different or less expensive drug first

  • Quantity limits: your plan only covers a certain amount of a drug over a certain period of time, such as 30 pills per month

• Use a preferred, in-network pharmacy to fill your prescriptions. Many pharmacy networks include both preferred and non-preferred pharmacies. You typically pay less for your prescriptions at preferred pharmacies.

These steps will help you avoid gaps in coverage and unexpected fees and costs from prescriptions that are not covered by Medicare Part D.

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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 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.

SilverScript Medicare Prescription RX Plans

Meidcare now offers clients new options for SilverScript  Medicare Prescription RX plans in 2016.

SilverScript will provide two prescription plan options in 2016: SilverScript Choice as well as SilverScript Plus.  The SilverScript Choice offers comprehensive coverage with low premiums and co-pays.  SilverScript Plus provides additional coverage in the coverage gap (commonly referred to as the donut hole). The Plus plan is designed for people who need to take several medications on a regular basis.  Because these people are more likely to reach the donut hole during the 2016 plan year.

Both SilverScript prescription medication plans offered in 2016 will feature a $0-deductible, low co-pays for many drugs and competitive premiums. In fact, SilverScript premiums in 30 states are lower than they were in 2015.  In fact, premiums in eight of those states is below $20.  Also,  SilverScript Choice plans have the lowest prescription drug plan premium in four states.  Members can access a convenient nationwide network consisting of a wide selection of pharmacies across the country. These include many large national and regional chains, many independent, community-based pharmacies, and the CVS/Caremark mail service pharmacy.  Additionally, in 2016, SilverScript is introducing a new list of covered medications.  This will help to keep co-pays low for some frequently prescribed drugs.

SilverScript recently received a 4-star performance rating from CMS for delivering value, clinical outcomes and customer service.

CLICK HERE TO REQUEST MEDICARE QUOTE INFORMATION.

Most Medicare Prescription Drug Plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.

   Click here to learn more about the Medicare donut hole.

Please contact us if you would like to learning more about the SilverScript or any other Medicare RX plan. You can either call the office at 203-796-5403 or email us at admin@croweandassociates.com for an appointment.

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 admin@CroweAndAssociates.com if you have questions or require additional information about insurance.

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 Edward@Croweandassociates.com

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 Edward@Croweandassociates.com

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 Edward@Croweandassociates.com 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 am often asked about Medicare Part B drugs and how they are different from Medicare Part D drugs.  The answer is fairly straight forward.  A Medicare Part B drug is any drug that is administered to the patient by injection or IV at the doctors office or some other Medical facility.

When this is the case, the drug falls under the Medicare Part B benefit.  It is not a part D drug and will not fall under your Rx benefits.  In other words, it is treated like a medical benefit instead of a drug benefit.

There is one exception to this.  If the patient/member picks up the drug at the pharmacy and then has it administered to them by the doctor or at the facility, it may still fall under the Medicare part D drug benefit.  The difference is that the patien actually purchased it at the pharmacy vs. it being supplied by the doctor of facility.

Part B drugs are covered at 80% by most Medicare Advantage plans, leaving the member to pay 20% of the cost which can be increadibly expensive.  Aetna Medicare Advantage plans are an exception to this rule as they only charge a $50 copay for Part B drugs vs. 20% of the cost.

The other good way to cover part B drugs is to have a Supplement in place.  A plan F  or C will cover the Part B drug at 100%.

If you have specific questions or need any information, please email Edward Crowe at Edward@Croweandassociates.com or ca