Long-Term Care Planning: Prescription Drug Coverage
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In your long-term care planning, one thing you will want to research is prescription drug coverage. Medicare Part D covers prescription drugs, which is often an expensive part of medical care. Following are the two main ways to get prescription drug coverage:
Part D plans, which add drug coverage to original Medicare
Medicare Advantage plans, which include Part D prescription drug coverage (MA-PDs).
If you are choosing among Part D plans, you need to consider a few variables:
Are the drugs you take on the plan's formulary (list of drugs)?
Is the pharmacy you generally use in the plan's network?
Does the plan require you to use generic rather than brand name drugs, or to give certain drugs a trial before it will approve more expensive ones?
Do you have to pay a deductible or copayment for drugs?
Are financial-assistance plans available?
Most Medicare Part D plans have a so-called doughnut hole, a gap in coverage that begins after you and your drug plan have spent a certain amount for covered drugs. In 2014 that amount is $2,850. After you're in the doughnut hole, in 2014 you pay 47.5 percent of the plan's costs for covered brand-name drugs and 79 percent of the plan's costs for covered generic drugs.
What you’ve paid from the beginning of the year — deductibles, co-insurance, and copays (but not the drug plan premiums) — counts toward getting out of the coverage gap, as do any discounts for brand-name drugs that you get in the gap. After you reach $4,550, catastrophic coverage takes over and pays 95 percent of Part D drug costs.
To estimate how much you will have to spend in the doughnut hole, go to AARP's calculator. Under the Affordable Care Act, the doughnut hole will shrink every year until it disappears in 2020.
Even with Medicare Part D, prescription drugs can be very expensive. Financial assistance may be available from Medicare, your state, pharmaceutical companies, or charities. Here are some resources for financial assistance:
Extra Help: Medicare's Extra Help program provides low-cost Part D coverage for people with incomes and assets under a certain level. Income limits are higher if you have dependents living with you or if you live in Alaska or Hawaii. Assets include money in savings or checking accounts, stocks, bonds, and other investments, but not your home, car, or household items.
If you qualify and join a Medicare drug plan, you get help paying for your monthly premium, yearly deductible, coinsurance, and copayments. If you have Medicaid and live in a nursing home, this drug coverage is free. To apply for Extra Help, go to Social Security or call 800-772-1213.
State Pharmacy Assistance Programs: Many states have State Pharmacy Assistance Programs (SPAPs) that help some people pay for prescription drugs based on financial need, age, or medical conditions. To find out what is available in your state, contact your State Health Insurance Assistance Program (SHIP).
Pharmaceutical assistance programs: Many major pharmaceutical companies offer assistance for people who are taking their drugs but cannot pay the full price. There is a list of pharmaceutical assistance (or patient assistance) programs at Medicare.gov. Even if the drug company is not on the list, try calling the company to see what help you can get. The formal request must be made by a doctor.
Charity programs: Charity programs include organizations that help people with low incomes pay for prescription drugs. These organizations often serve people with a particular disease, such as cancer or neurological conditions.
Private insurance you may have (such as retiree benefits) in addition to Medicare may help with prescription drug coverage. Check with your plan to see how it coordinates benefits. Medigap supplemental insurance, however, does not cover drug expenses.