Determining the Extent and Limits of Your Medicare Coverage

By Patricia Barry

Copyright © 2018 by AARP. All rights reserved.

When you enroll in the traditional Medicare program, you don’t get much information about it sent to you along with your Medicare ID card. (The official handbook, “Medicare & You,” is mailed out to beneficiaries each fall. You can read the current issue at any time online.)

But if you join one of Medicare’s private plans — a Medicare Advantage plan of any type, or a stand-alone Part D drug plan — you’re essentially entering into a legal agreement with that plan. So sooner or later (either together with your plan membership card or separately), you’ll receive a hefty information packet that should include the following documents:

  • Evidence of coverage: This booklet is important, so be sure to keep the information in a safe place. As required by Medicare law, it contains masses of stuff you can use for reference when you first join the plan and throughout the year. Here are some examples:
    • Phone numbers: Call if you have any questions or problems.
    • An explanation of how the plan works and its conditions and rules: This part lays out the plan’s responsibilities in giving you coverage and the rules you must accept.
    • Details of the plan’s benefits and costs: This information spells out the plan’s costs and benefits for this particular year, which may be different from those the same plan provided last year or will provide next year.
    • An explanation of your legal rights if you have a complaint against the plan or disagree with a decision it makes: This section includes detailed instructions on how to file a complaint or make an appeal.
  • Drug coverage information: If the plan in question is a stand-alone Part D drug plan or a Medicare Advantage plan that includes Part D drug coverage, the packet should include the following:
    • The plan’s formulary: A formulary is a list of all the medications the plan covers. It also shows which drugs come with restrictions such as prior authorization, quantity limits, and step therapy. It also says which pricing tier of co-pays each drug falls into, so you can tell what you’ll pay.
    • The plan’s pharmacy network: This list shows all the pharmacies in your area that accept your plan’s card. It also shows which ones are preferred pharmacies (where your drugs may cost less) or specialty pharmacies (which stock special drugs, such as those that are injected or require special handling).
  • Provider information: If your plan is a Medicare managed care plan (HMO, PPO, Special Needs Plan, or Medicare Cost plan), the packet should include the following:
    • The plan’s provider directory: This item lists doctors, hospitals, and other facilities that are in the plan’s network of providers and have agreed to treat its members.
    • The plan’s service area: This list indicates all the areas that your plan covers. It may be a collection of counties or zip codes or (in the case of regional PPOs) a state or group of states.

Everything in your plan’s info pack is critical, so keep it someplace where you can remember to find it in case you need to look up the fine print of the plan’s rules sometime during the year. If any item listed here is missing (according to the type of plan it is), call the plan and ask for it.