What is the Medicare Part D Coverage Gap

The Part D Coverage Gap used to be known as the "Doughnut Hole".  The Coverage Gap relates to a gap in the Medicare Part D coverage.  The gap in coverage affects many seniors that take several name brand drugs or many drugs that carry a high price tag.  Seniors with a Medicare drug plan start the year with coverage for their drugs.  If their drug costs reach a certain point they go into the gap where they have lower coverage for their drugs.  After they have spent a large amount of money they come out of the gap and have what is considered catastrophic coverage. 

The numbers for the gap for 2011 are as follows:  Coverage Gap begins at $2,840 and goes until $4,550
During the gap you must pay 50% of name brand drugs and 93% of generic drugs.  You pay around $2 - $6 for drugs once you are in catastrophic coverage.

NOTE:  The plan costs and your costs for the drugs count toward getting you into the gap.  Only your costs for drugs count toward getting you out of the gap!  This makes it harder for seniors to get out of the coverage gap.  There are several things that I recommend to my clients to help them avoid the Coverage Gap, or lower their costs during the coverage gap.  Please see my article on Avoiding the Medicare Part D Coverage Gap for these great tips!

What is Medicare Part D

Of the four parts of Medicare, Part D is then newest and the most complex.  I still get asked what is Medicare Part D which means that the government is failing to do a proper job of educating seniors on this very important and vital part of Medicare.  Medicare Part D covers prescription drugs that are typically filled at your local pharmacy or filled through mail order.  The typical Part D drug plan consists of four Tiers generally referred to as Tier 1, Tier 2, Tier 3, and Tier 4.  Tier 1 is for generic drugs, Tier 2 is for Preferred Brand, Tier 3 is for Non-Preferred Brand, and Tier 4 is for Specialty drugs.

Medicare Part D is administered through private insurance companies such as Humana, Wellcare, BCBS, AARP United Healthcare, and many others.  They are county specific, and their costs vary greatly from plan to plan and from region to region.  Also take note of whether or not the plan has a deductible.  Deductibles are common in Part D plans.  The important considerations when determining the best drug plan for you is to consider the costs, formulary, and your pharmacy choice.  A formulary is a list of drugs that is covered by the plan as well as their level of coverage or Tier.

NOTE:  Not all formularies are created equal!  Many times you will find your drug on one formulary and not on another.  Also, it is not unusual to find your drug on different Tiers on different formularies.

Finally, to complicate things even more they throw in the coverage gap, enrollment periods, and a penalty.  Please see my article on the Medicare Part D coverage gap, enrollment periods, and penalty for more detail on those subjects.

In summary, you will pay a monthly premium for Part D of Medicare which will be determined by which plan you select.  You need to check the plan's formulary against the drugs you are taking to determine whether your drug is covered and how well it is covered.   A great resource to accomplish this is online at www.medicare.gov

Enrollment Period ends for beneficiaries whose plan left the area

February 28, 2011 marked the end of the Enrollment Period granted by CMS for those Medicare Beneficiaries who lost their coverage due to their plan leaving the area.  On February 7 CMS sent out a notice saying they were extending the Special Enrollment Period (SEP) for individuals affected by Medicare Advantage (MA) and Part D plan (PDP) non-renewals (NRs) or service area reductions (SARs) to February 28, 2011 from the original end date of January 31, 2011.

Hopefully, everyone was able to make the necessary changes to their Medicare coverage as only the standard Special Enrollment Periods (SEPs) remain for those needing to make a change to their Medicare Advantage Prescription Drug Plans (MAPDs) and Prescription Drug Plans (PDPs)

Medicare and Medicaid

When it comes to Medicare and Medicaid lets start with some important distinctions.  I hate to be to basic, but I want to make sure that we understand the difference.  Medicare is a national social security program while Medicaid is a state run governmental program.  You can have Medicare without Medicaid, Medicaid without Medicare, and you can have both Medicare and Medicaid.  I'm going to deal here with the last combination of Medicare and Medicaid.  There are several levels of Medicaid depending on your state of residence as well as your income and assets.  Medicaid helps pay some or all of the costs that Medicare does not pay.  In order to take advantage of both Medicare and Medicaid, you will have to use providers that will accept and file both. 


There are Medicare Advantage programs that work with both Medicare and Medicaid.  One well known company that offers these programs is Wellcare.  Wellcare offers different programs depending on the level of Medicaid coverage that you qualify for.  The advantage to these programs is more provider options as well as additional benefits such as dental, vision, and even transportation.  Just make sure that you sign up on the right one.  TIP:  An easy way to get on to Medicaid is to apply for LIS. Please click here for more information on LIS and Medicaid

Blue Cross Blue Shield Medicare Advantage for 2011

Blue Cross Blue Shield is one of the most widely recognized names in health care.  They are a huge provider of health coverage for a lot of group plans, and this helps them when it comes to their Medicare enrollments.  Unfortunately, the name doesn't always translate to coverage.  One important note is that BCBS is different from state to state.  They are completely separate entities, and operate independent of each other.  So BCBS of Alabama is completely separate from BCBS of Tennessee. 


Start be making sure you are looking at the correct plans for your state and county.  BCBS offers several types of Medicare Advantage  and Prescription Drug Pans depending on your location.  For example, in Alabama BCBS offers a PPO, PFFS, and a SNP while Arkansas only has a PFFS plan available.  Both California and Florida offer a Regional PPO.  A quick review of the Florida Regional PPO shows a premium of $63/month, co-pays of $50 for specialists, $300 a day for hospital stays, and a lovely $150 Part D Drug deductible!  Click here to see another well known company that has started including a deductible for their drug coverage.  These companies should be ashamed of themselves for this kind of robbery.  In this county alone there are three plans that have a zero premium, lower co-pays then those described above, and no deductible on the drug portion of the coverage!

So why would anyone sign up for this type of coverage?  Well, the answer is simple.  People have BCBS when they turn 65 so they migrate to their Medicare coverage, not taking the necessary time to research the best plans for them in their area.  The lesson here is to not always assume that a company with a well known name is going to always provide you with the best coverage.

AARP United Healthcare Medicare Advantage Plans 2011

The AARP United Healthcare plan is the same throughout Florida!  It is also known as AARP Medicare Complete Choice Plan 2.  Probably everybody has heard of United Healthcare as they are a national insurer that covers a lot of group plans as well as individuals.  Most people were probably covered by United Healthcare at some point in their life.  The AARP plan in Florida is a PPO, and is an outstanding value since it has NO monthly plan premium!!  For more info on PPO's versus HMO's click here.

It also contains medicare Part D coverage as well with no deductible and still no premium.  You will be responsible for paying the copays when you use the plan or fill prescriptions.  The plan also contains extras like dental coverage and the wildly popular Silver Sneakers program at no additional cost.  

Since it is United Healthcare providing the coverage, their provider directory is extensive.  Don't fret if you can't find your doctor in the directory as there is coverage for out of network use.  Simply pay the higher co-pay if needed. 

The plan is available in other states, but keep in mind that plans will differ from state to state and even county to county.  The plan also has something unique called the Passport Program.  This program allows you to travel to designated states and still be in-network.  This is a great feature for snowbirds or retirees that love to travel.  For more information on the plan in your area be sure to check medicare.gov or talk to an agent near you!

Humana Medicare Advantage Plans Have some UNPLEASANT Surprises in 2011!!

We've all seen the ads on tv for the Humana Medicare Advantage plans.  And they somehow make them sound so good.  However, a closer look leaves a not so pleasant aftertaste!  Shockingly, they are now including a Part D drug deductible in many of their plans.  While common in stand alone Part D plans, this has not been seen in MAPD or Medicare Advantage plans.  The deductible of up to $310 is found in several of their plans for 2011.  So not only are they charging high premiums for their plans, they are also now including a Part D drug deductible as well.  

Make sure you compare the plans in detail before signing up to avoid finding out after the fact that you now have a deductible to pay that wasn't there before.  For more information on comparing Medicare Advantage plans and the most recent Humana Reader's Digest Healthy Living plan check out my blog at www.medicare-plans.net