We ask a Sanford Health Plan expert about Medicare Part D coverage, who needs it and more

 

 

Transcript

Mick Garry (host): Welcome to “Medicare Simplified,” a podcast by Sanford Health Plan that will help you make the most of your Medicare Advantage benefits.

I'm your host, Mick Garry.

Today we're going to give you information that can help you decipher prescription coverage under Medicare. The truth is, it can be a challenge finding the right plan because there are a lot of plans out there. Choosing the right one is best done when you're familiar with the choices.

To that end, we're joined by Jack Arnette today. Jack is an inside sales manager for Sanford Health Plan and can help us navigate what can be an intimidating process. It can be particularly intimidating if you're a rookie when it comes to the world of Medicare.

So, let's start with the basics, Jack. Let's help the Medicare rookies today.

Jack Arnett (guest): Good to be here and good to see you again.

Mick Garry: We hear a lot about Medicare Part D on TV and elsewhere. Can you tell us what it is?

Jack Arnett: Medicare Part D is the federal government's, Medicare's prescription drug program that is available for all Medicare beneficiaries across the United States. Medicare sets the parameters, sets the framework and sets the rules, but these Part D plans are offered by independent insurance companies across the country.

Mick Garry: What does Part D cover?

Jack Arnett: If a Medicare beneficiary is looking at Part D coverage, I think there are three main areas they need to consider:

One is the formulary. The formulary is a list of drugs that a particular company covers. It's a wide range of prescription Medicare medications that are categorized into tiers.

And that brings me to the next thing: Tiers.

Formularies typically will have several tiers, and that differentiates the cost that an individual would pay. Generally, Tier 1 to Tier 3 are your lower cost tiers, all the way up to tiers 4 and 5, which would be some of your high dollar prescriptions that will come with a higher copay or cost share.

The third thing is a network.

Most Medicare beneficiaries have been with the same pharmacies for many years and want to maintain that relationship. So, when a Medicare beneficiary is considering changing their drug plan or enrolling for the first time, they’ll want to make sure that the pharmacy that they choose participates with that particular plan.

This means a network pharmacy is very important for a beneficiary in choosing the right plan.

Mick Garry: So ultimately, do I need it? Do I need Part D?

Jack Arnett: I would answer that a couple ways.

No. 1, is it mandatory that a Medicare beneficiary enrolls into Part D? No. However, if a beneficiary refuses to enroll into a prescription drug plan and they do not have what Medicare deems as credible coverage – like through an employer or their spouse's employer – they may be assessed a penalty and that penalty stays with that individual for life.

So, if someone chooses to wait – say they enroll in Medicare at age 65 but don’t want a prescription plan yet – let’s say they tell me: “Jack, I don't even take an aspirin. I'm just going to wait a couple years,” and then something happens with their health and now they need a prescription drug plan. They're going to pay more than the person who enrolled in a plan at age 65 because Medicare will assess that penalty that stays with that beneficiary for life.

Mick Garry: How can you get coverage?

Jack Arnett: There are a couple different ways for that.

No. 1, if you're new to Medicare, whether you're just turning 65 or you continue to work and now you're beyond 65, 68, 70, Medicare allows for an enrollment into Part D.

At that time there are several ways an individual can obtain that coverage. One option available is going online and doing research themselves. But as you mentioned in your opening, it is daunting and there are a lot of options to choose from. Doing your own research will always be one of your options.

However, working with a trusted advisor, an insurance agent that has experience in Part D, is really my recommendation because that agent will have the knowledge needed to help you navigate all things part D. Part D plans get approved by county. Some part D plans are national plans available across the country, and some are just regional plans that may have a small network or a small geographic area. So, getting with that trusted advisor, a source that you know and trust that has experience in the Medicare field, is really the best way, in my opinion, to choose the right plan.

Mick Garry: So, it is very important to know that your agent is familiar with local options, correct?

Jack Arnett: Absolutely, part D hasn't been around forever – 2006 is when the first Part D plans came into play. So we're not even 20 years into this. But there have been some changes and there have been a lot of companies that have come and gone. There are some national players and some regional players that have maintained. So, when you're talking with that trusted advisor – that insurance agent that has the knowledge and the experience – you're going to be able to determine really quickly if they’re familiar with options available locally.

Mick Garry: Can I change plans if I'm uncomfortable with it?

Jack Arnett: You can. Medicare allows for a couple different enrollment periods throughout the year.

If a Medicare beneficiary wants to opt out of the coverage that they initially chose first, they can do that. If you're 65 years old and you enroll into Medicare – generally that takes place the first of the month that you turn 65 – then Medicare gives you a full 12-month period to test out your coverage. Over that time, you can make sure that this is the plan you want. If it’s not, you are allowed to make a change during that time.

All Medicare beneficiaries have what's called Medicare Advantage open enrollment period from January 1 to March 31. During that time, beneficiaries can make a one-time plan decision or change as well. In addition, throughout the year there are what Medicare calls “special enrollment periods.”

Let’s say somebody enrolled into a plan here in Sioux Falls and at mid-year they moved out of state. Let’s say they moved to Green Bay, Wisconsin, and the plan they chose in South Dakota isn't available in Wisconsin. Then Medicare will obviously allow them to choose a different plan in the state that they're in.

But after that, if a Medicare beneficiary doesn't qualify for a special enrollment period after March 31st, then they will be locked into that plan until Jan. 1st of the following year.

Mick Garry: If you want to opt out, how does that go?

Jack Arnett: Well, you just don't have to renew that plan.

You would generally have to contact the Part D insurance plan that you are enrolled in, then tell them that you want to disenroll. You can do that. But again, that penalty then kicks in. Because of this, very few beneficiaries will ever opt out from Medicare's annual enrollment period, which is October 15th through December 7th.

We always encourage individuals to at least review the drug coverage, formularies change, deductibles, copays, cost shares change. I'm giving kind of a little bit of a sneak peek here: There will be some significant changes to Part D coverage for 2025. So, it is going to be wise for every single Medicare beneficiary to review their drug coverage come this fall.

Another thing I want to add: Throughout the rest of the year, on our Sanford Health Plan Align website, we will have additional information relative to Part D. We are staying on top of these changes. We will be well versed, well educated, and be in a great position to provide excellent information and guidance for all Medicare beneficiaries come this fall.

So I would encourage individuals, if you are kind of pre-shopping and just want some knowledge about what is going to happen this fall, stay tuned to Sanford Health Plan. Look on our website. There'll be a lot of information on there at their disposal.

Mick Garry: If you'd like to learn more about Medicare Advantage plan options from Sanford Health Plan, visit align.sanfordhealthplan.com or find more information in our episode show notes.

 

Important Align powered by Sanford Health Plan information. If you have questions, our customer service team is available at (888) 278-6485 (TTY: (888) 279-1549). Align powered by Sanford Health Plan is a PPO with a Medicare contract. Enrollment in Align powered by Sanford Health Plan depends on contract renewal. Sanford Health Plan complies with applicable Federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, sex, or any other classification protected under the law. If you need language services or information given in a different format please call (888) 278-6485 (TTY: (888) 279-1549). ATENCIÓN: si habla español, tiene a su disposición servicios gratuitos de asistencia lingüística. Llame al (888) 278-6485 (TTY: (888) 279-1549). 注意：如果您使用繁體中文，您可以免費獲得語言援助服務。請致電(888) 278-6485 (TTY: (888) 279-1549).