Medicare offers prescription drug coverage to everyone with Medicare. Even if you do not take a lot of prescriptions now, it’s important for you to consider joining a Medicare plan. If you decide not to join a Medicare drug plan when you’re first eligible, and you don’t have other creditable prescription drug coverage (coverage that is as good as Medicare), or you don’t get Extra Help (from Medicaid or SPAP), you’ll likely pay a late enrollment penalty.
To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
2 Ways to Get Medicare Drug Coverage
There are two ways to get Medicare prescription drug coverage:
1. Medicare Prescription Drug Plans. These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and. Currently this is the only way to get Prescription Drug Coverage in the U.S. Virgin Islands. There are two companies that offer Prescription Drug Plans; AARP and Community CCRx.
2. Medicare Advantage Plans (like an HMO or PPO) or other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Part A and Part B coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan. There are no Medicare Advantage Plans in the U.S. Virgin Islands.
Both types of plans are called “Medicare drug plans.” In either case you must live in the service area of the Medicare drug plan you want to join.
Those electing to join a Part D plan will have to pay a monthly premium and pay a share of the cost of prescriptions. Drug plans vary in what prescription drugs are covered, how much you have to pay, and which pharmacies you can use. All drug plans have to provide at least a standard level of coverage, which Medicare sets. However, some plans offer enhanced benefits and may charge a higher monthly premium. When a beneficiary joins a drug plan, it is important to choose one that meets the individual’s prescription drug needs.
Although Part D plans’ benefit designs vary, they each include the following minimum level of coverage:
• Deductible: This is the amount you pay each year for your prescriptions before your Medicare drug plan begins to pay its share of your covered drugs. No Medicare drug plan has a deductible more than $320 in 2012. Some drug plans do not have a deductible.
• Copayments/Coinsurance: This is the amount you pay for each of your prescriptions after you have paid the deductible (if your plan has one). Some Medicare drug plans have different levels or "tiers" of coinsurance or copayments, with different costs for different types of drugs.
• Coverage Gap: Also called the “donut hole”. This means that there is a temporary limit on what the drug plan will cover for drugs. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs; in 2012 that amount is $2,930. Once you have enter the coverage gap, you get a 50% discount on covered brand name drugs and pay 86% of the plan’s cost for covered generic drugs until you reach the end of the coverage gap; when your out of pocket expenses reach $4,700.
• Catastrophic Coverage: After your out-of-pocket expenses have reached $4,700 you automatically get catastrophic coverage. The beneficiary is responsible for the greater of 5% of drug cost or a $2.60 co-payment for generic medications and $6.50 for brand-name drugs.
In addition to the 50% discount on covered brand-name prescription drugs, there will be increasing savings for you in the coverage gap each year until the gap is closed in 2020.
When Can You Join a Medicare Drug Plan?
• When you first get Medicare (Initial Enrollment Period): During the 7-month period that starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
• During Certain Times Each Year (Yearly Enrollment Periods): The yearly enrollment period is October 15 – December 7. You can join a Medicare Prescription Drug Plan, switch from one Medicare Prescription Drug Plan to another Medicare Prescription Drug Plan or drop your Medicare prescription drug coverage completely.
• In Special Circumstances (Special Enrollment Periods): You can make changes to your Medicare prescription drug coverage when certain events happen in your life, such as if you move or you lose other insurance coverage. These chances to make changes are called Special Enrollment Periods (SEPs). Rules about when you can make changes and the type of changes you can make are different for each SEP.
How to Join a Medicare Drug Plan
You can join a Medicare Prescription Drug plan several ways:
• Electronically on the internet, either through www.medicare.gov or the plan’s website.
• Over the telephone by calling 1-800-MEDICARE or calling the plan directly.
• Completing a paper application.
• Visiting the VI SHIP Office
How to Switch Your Medicare Drug Plan
You can switch to a new Medicare drug plan simply by joining another drug plan during Initial Enrollment Period, Yearly Enrollment Periods or Special Enrollment Periods. You don't need to cancel your old Medicare drug plan or send them anything. Your old Medicare drug plan coverage will end when your new drug plan begins.
How to Drop Your Medicare Drug Plan
If you want to drop your Medicare drug plan and you don't want to join a new plan, you can do so during Initial Enrollment Period, Yearly Enrollment Periods or Special Enrollment Periods.
• You can disenroll by calling 1-800-MEDICARE.
• You can also send a letter to the plan telling them that you want to disenroll.
• If you drop your plan and want to join another Medicare drug plan later, you have to wait for an enrollment period. You may have to pay a late enrollment penalty.
How much is the Part D Penalty?
The cost of the late enrollment penalty depends on how long you went without creditable prescription drug coverage.
The late enrollment penalty is calculated by multiplying 1% of the "national base beneficiary premium" ($31.08 in 2012) times the number of full, uncovered months you were eligible but didn't join a Medicare drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium.
The national base beneficiary premium may increase each year, so the penalty amount may also increase every year.
3 Ways to Avoid the Late Enrollment Penalty
1. Join a Medicare drug plan when you're first eligible. You won't have to pay a penalty, even if you've never had prescription drug coverage before.
2. Don't go 63 days or more in a row without a Medicare drug plan or other creditable coverage. Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs, or health insurance coverage. Your plan must tell you each year if your drug coverage is creditable coverage. You may get this information in a letter or in a newsletter from the plan. Keep this information, because you may need it if you join a Medicare drug plan later.
3. Tell your plan about any drug coverage you had if they ask about it. When you join a Medicare drug plan, the plan will send you a letter if it believes you went at least 63 days in a row without other creditable prescription drug coverage. The letter will include a form asking about any drug coverage you had. Complete the form and return it to your drug plan by the deadline in the letter. If you don't tell the plan about your creditable drug coverage, you may have to pay a penalty.
Drug Plan Coverage Rules
Medicare drug plans may have the following coverage rules:
• Prior authorization—You and/or your prescriber must contact the drug plan before you can fill certain prescriptions. Your prescriber may need to show that the drug is medically necessary for the plan to cover it.
• Quantity limits—Limits on how much medication you can get at a time.
• Step therapy—You must try one or more similar, lower cost drugs before the plan will cover the prescribed drug.
If you or your prescriber believe that one of these coverage rules should be waived, you can ask for an exception.
Do I Need a Part D Plan if I Have Employer Health Coverage?
If you have prescription drug coverage based on your current or previous employment, your employer or union will notify you each year to let you know if your prescription drug coverage is creditable. Keep the information you get.
Call your benefits administrator for more information before making any changes to your coverage. Note: If you join a Medicare drug plan, you, your spouse, or your dependants may lose your employer or union health coverage.
If you meet certain income and resource limits, you may qualify for Extra Help from Medicare to pay the costs of Medicare prescription drug coverage. There are two ways to get extra help in the U.S. Virgin Islands; through State Pharmaceutical Assistance Program (SPAP) or Medicaid.
State Pharmaceutical Assistance Programs (SPAPs)
Some states have State Pharmaceutical Assistance Programs (SPAPs) that help people pay for prescription drug based on financial need, age, or medical condition.
How to Apply for SPAPs
Each SPAP has different rules about eligibility, how to apply, and how it works with Medicare prescription drug coverage. For more information, call (340) 773-2323 on St. Croix and (340) 774-0930 on St. Thomas/St. John.
Medicaid is a joint federal and state program that helps pay medical costs for some people with limited income and resources and meet other eligibility requirements. Medicaid also offers benefits not normally covered by Medicare, like help with personal care and rides to doctor appointments. If you qualify for Medicaid in your state, you automatically qualify to get Extra Help paying for Medicare prescription drug coverage.
How to Apply for Medicaid
Each state has different rules about eligibility and applying for Medicaid. Please call (340)773-1311 on St. Croix or (340) 774-0930 on St. Thomas/St. John to see if you qualify and learn how to apply.