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.
- If non-authorized, then members make own selection of Part D plan.
- Low Income Subsidies (LIS)
- Low-income consumers/members can get significant financial assistance for their Medicare Part D costs.
- Help includes lower or no monthly premiums, lower or no copayments or coinsurance and no coverage gap.
- 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
www.ssa.gov to complete an application online
Also, see our guide on Part D for additional resources plus you will be able to compare plans.