Standard Benefits for Medicare Part D Plans

Standard benefits for Medicare Part D plans include:

  • • Formulary
  • • Catastrophic Coverage
  • • Deductible
  • • Coverage Gap

Total Out-of-Pocket Drug Costs
The amount the consumer pays for prescription drugs starting January 1, not including premiums, but including the following:

  • • Deductible
  • • Copays/Coinsurance
  • • Coverage Gap Drug Costs

Note: Costs that are paid by the member, another person on behalf of the member, a qualified State Pharmaceutical Assistance Program (SPAP), a bona fide charity, and Drug
Manufacturers will count toward TrOOP. However, costs paid by employers or unions do NOT count toward TROOP.

Part D Definitions

  • Definition of Formulary: A list of the drugs that are covered by the plan.
  • Definition of Abridged formulary: A partial list of the commonly used covered drugs on the plan formulary.
  • A Formulary Exception Request: Request for the plan to cover a medication that is not included in the formulary.

Quantity Limits of Prescription Drugs

  • The plan will only cover a certain amount of these drugs for one copayment or during a certain amount of time.
  • These limits may be in place to ensure safe and efficient use of a drug.
  • If more than this amount is prescribed, or the limit is not right for the member’s situation, the member or his/her doctor can ask the plan to cover the additional quantity.

Up Tier for Medicare part D Plans

  • Definition of Up Tier: Medication has been moved to a higher tier.
  • Tier Exception Request: Request that the plan cover a Tier 2 or 3 medications at the next tier lower
  • Tier 2 requests for Tier 1 coverage – There must be a Tier 1 drug used for treating the same condition that the requested Tier 2 generic drug is being used to treat.
  • Tier 3 requests for Tier 2 coverage – There must be a Tier 2 drug used for treating the same condition that the requested Tier 3 drug is being used to treat.

Note: If the plan grants the member’s request to cover a drug that is not on the formulary, the member may not ask the plan to provide a higher level of coverage for the drug.

Medigap Insurance – Tier Transitional Fills:

  • During the first 90 days of enrollment, members are allowed one 31-day transition supply of any drug requiring a Prior Authorization, Step Therapy Override or Formulary Exception.
  • Members who obtain a transition supply will receive a letter from us within 3 business days.
  • The letter notifies members that they received their medication due to our transition policy and advises them of the coverage determination/exception process.
  • Members can request to go through the prior authorization process if all required alternates have failed or are inappropriate/contraindicated for their condition.

Note: Members in a long term care facility are allowed three 31-day transition supplies.

Step Therapy with a Prescription Drug Plan
There are effective, clinically proven, lower-cost alternatives to some drugs which treat the same health condition.

The Plan may require that a member try an alternative drug for their health condition before the Plan will cover the drug a member is requesting. If a member has already tried other drugs or a provider thinks other drugs are not right for the situation, a member or a member’s doctor can ask the Plan to cover these drugs.

Prior Authorization for the Use of Certain Part D Plans
Some drugs require approval by the Plan prior to a member receiving the drug. A member or member’s provider can ask a Plan to cover a drug and provide additional information to the Plan before the Plan will cover this drug. The Plan uses this information to help ensure the drug is covered appropriately for Medicare-eligible health conditions. In some cases, a member might be asked to try another drug on the formulary before the Plan will cover the drug they are requesting.

SPAP (State Pharmaceutical Assistance Program)

  • State-funded program designed to provide increased access to prescription drugs.
  • Benefits entail any combination of premium and/or copay assistance.
  • Income level/asset requirements vary by State, but almost all require members to be enrolled in Part D and apply for Extra Help to qualify for additional SPAP benefits.
  • Some but not all, require members to be in a PDP Plan with premiums below the regional benchmark.

Reasons SPAPs coordinate with PDPs:

  • Payment of member premiums
  • Administer SPAP’s copayment benefit for them (some state exceptions)
  • Some SPAPs coordinate their benefits independent of the PDP (i.e., RI)
  • CMS guidance impacts SPAPs’ relationships with PDPs
  • Not allowed to ‘steer’ SPAP members to one plan over another.
  • SPAPs must work with all PDPs in a state, but can establish operational coordinating requirements that only a limited number can administer.
  • PDPs are required to coordinate with SPAPs.

SPAPs can legislatively pursue ‘authorized representative status’ to enable them to make enrollment decisions on members’ behalf.

  1. If non-authorized, then members make own selection of Part D plan.
  2. Low Income Subsidies (LIS)
  3. Low-income consumers/members can get significant financial assistance for their Medicare Part D costs.
  4. Help includes lower or no monthly premiums, lower or no copayments or coinsurance and no coverage gap.
  5. Federal and state income levels and assistance may change each year.

How Does a Consumer Apply for Extra Help?
Your consumer automatically qualifies and doesn’t need extra help if:

  • They receive both Medicare and Medicaid benefits (dual eligible) and meet certain income requirements, and/or
  • They receive both Medicare and Supplemental Security Income (DSSI) benefits and meet certain income requirements.
  • If the consumer does not automatically qualify for LIS, the consumer may contact the Social Security Administration and request a Low Income Subsidy Application Form.

TTY/TDD users: 1-800-325-0778
7 am – 7 pm EST Monday – Friday; or to complete an application online

Also, see our guide on Part D for additional resources plus you will be able to compare plans.

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