Medicare FAQs & Quicklinks

Original Medicare is the federal health insurance program that consists of two parts:

Part A (Hospital Insurance) which covers all or part of:

• Hospital stays
• Emergency room visits
• Care in a skilled nursing facility
• Hospice
• Some at-home health care

Part B (Medical Insurance) which covers all or part of:

• Primary & Specialist doctor visits
• Outpatient care
• Medical supplies
• Preventive services

No. You must have a separate qualifying drug plan through a private insurance company.  You are required to have one in place once when you become eligible for Medicare, otherwise you could face permanent penalties. 

See the Prescription Drug Plan FAQs & *NEW* 2025 Part D Drug Cost FAQs below for more detailed information

Original Medicare is designed for those who are:

• U.S. citizens age 65+

• Legal residents who have lived in the U.S. for at least 5 years and are age 65+

• Younger than 65, and have been declared disabled for 24 consecutive months by the Social Security Administration

• Younger than 65, and diagnosed with End-Stage Renal Disease (ESRD) or Lou Gehrig's Disease (ALS)

Individuals who took Social Security prior to turning 65, those who have been disabled for two or more years, or those who have certain qualifying diseases are auto-enrolled into Medicare. 

Those who have delayed taking their Social Security benefits until after they turn 65 will need to enroll themselves. 

The recommended way to enroll is to first register for a free MySSA account by following these steps:

1. Visit ssa.gov & click the "Sign in" link in the top righthand corner
2. Click the blue "Sign in with Login.gov" button
3. Click "Create an Account" and enter the email you will use to access your account & receive important paperless notices from the Social Security Administration
4. Verify your email (which will be your Username from now on)
5. Once your email is verified, you will be prompted to create a password & log in for the first time
6. When logging in, SSA.gov uses two-factor authentication security codes that you will receive either by text or email to finalize the login process each time

To enroll in Original Medicare:

1. Login to your MySSA.gov account when you reach your Initial Enrollment Period (see the FAQ above regarding that timeframe)
2. Click the blue "Apply for Medicare Benefits" button that will automatically populate once you are inside your IEP
3. Complete the application. Allow yourself at least 45 minutes to an hour to finish
4. Check your mailbox for mail from SSA acknowledging the receipt of your application, and if they require any other information from you
5. You can expect to receive your Medicare card in the mail 60-90 days after applying.  You will also have an electronic version of your card in your MySSA.gov account in as little as 30 days
6. You may also enroll by visiting your local Social Security office or calling them at 1-800-772-1213

If you'd like some assistance, we are available to help guide you through the process at no cost to you. Simply book an appointment and we'll discuss what you need to do to get started

While Original Medicare covers some healthcare costs, it doesn't cover everything. 

Here is a breakdown of the common costs you need to be aware of:

• Part A Premiums:  For the majority of working Americans, you will be eligible for Part A benefits without a premium if you or your spouse paid Medicare taxes for at least 10 years(40 quarters) and are eligible to receive Social Security benefits now or in the future.  In some rare instances, a beneficiary may have to pay a monthly premium.

• Part A Deductibles/Coinsurance:  This is the amount you must pay out-of-pocket before Medicare pays for eligible services.

• Part B Premiums:  Every person who is eligible to receive Medicare will face a Part B premium. Part B premiums are set by CMS(Centers for Medicare & Medicaid Services) on a yearly basis, but may be higher depending on your yearly household income.  For more on this aspect of Part B premiums, please see the FAQ below regarding IRMAA.

• Part B Deductible:  This is the amount you must pay out-of-pocket before Medicare will cover qualifying services. 

• For a complete list of this year's costs, visit:  https://www.medicare.gov/basics/costs/medicare-costs

Technically no, but it's important to understand that there is no cap on how much your out-of-pocket expenses could be using Original Medicare only.

As an example:

• In 2024, Original Medicare has a deductible of $1632 you must pay out-of-pocket before any services are covered

• If you had a unplanned hospitalization that cost $30,000, you would be subject to pay 20% of the bill after the deductible is met

Using the example above, here's how you would be charged if you had Original Medicare only:

• $30,000 (Total bill) -  $1632 (Deductible) = $28,368 (Balance)

• $28,368 x 20% = $5673.60 (Your share)

• $1632 (Deductible) + $5673.60 (Your share) = $7305.60 Out-of-pocket

To fix this and lower your overall costs, it is recommended that you add either a:

• Medicare Advantage Plan (Part C), or
• Medigap Supplement (Plans A - N) with a Prescription Drug plan (Part D)

IRMAA, or Income-Related Monthly Adjustment Amount, is an additional amount tacked onto Part B & Part D premiums for beneficiaries who exceed certain income limits. 

Here's some important points to know:

• IRMAAs are determined by the Social Security Administration(SSA) by looking back at your tax information from 2 years ago

• IRMAAs most often apply to high income earners

• IRMAAs are assessed by SSA on a yearly basis.  It is possible to have an IRMAA occur one year(for instance, as a result of receiving an inheritance)and then have it dropped the next year when your income falls below the limits

• You will receive a predetermination letter in the mail, followed by an initial determination letter explaining the nature of your IRMAA

• If you are drawing Social Security Retirement income, your Part B & D premiums with the IRMAA will automatically be deducted from your check

• If you are not yet drawing your Social Security benefit, then you will receive a quarterly invoice where you will be given options on how you'd prefer to pay your bill in the future 

• IRMAAs can be appealed if you have experienced a qualifying life change or hardship that has impacted your current income, or if an error in your tax information is found 

• Click here to download the IRMAA appeal form

• To view this year's IRMAA income tables, visit: https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles

For seniors turning 65, once you become eligible for Medicare, the Initial Enrollment Period(IEP) is a 7-month timeframe that includes the 3 months prior to your 65th birthday, the month of your birthday, and the 3 months after your birthday.

For those with disabilities, it is the 7 months that includes the month you receive your 25th disability check, the 3 months before and the 3 months after.

For those delaying Medicare until after 65, you have 8 months from the time you either lose employer coverage or you stop working, whichever comes first. For more on this topic, see the "Can I delay Medicare?" & "What else should I know about delaying Medicare? FAQs below.

*Note: If your IEP happens to run concurrently with the Medicare Annual Enrollment Period (October 15-December 7), your IEP will have priority.  This means that you can ignore the annual enrollment dates for that year, because they do not apply to you

Yes, you can, but only under certain circumstances:

• The employer-based plan must be considered "creditable".  Short-term medical, medical discount/reimbursement programs and hospital indemnity plans do NOT qualify as "creditable coverage". Your employer is required by law to disclose to you whether or not the coverage they offer meets the federal minimum standard to be considered "creditable"

• The employer must have 20 or more employees

• The employer doesn't require you to take Medicare in order to stay on their plan

If your employer plan meets these requirements, then you may delay Medicare until you stop working without penalty

There are some important points you should know when considering whether or not to delay Medicare:

• Some employers allow you to stay on their plan, however, they may charge extra fees onto your monthly premiums once you turn 65 

• If your employer plan meets the requirements and you decide to delay Medicare, you do NOT need to notify Social Security unless:

1. You are already receiving Social Security Retirement benefits, or
2. You were auto-enrolled into Medicare prior to age 65

• If either of these apply to you, you will need to visit your local SSA office or call 1-800-772-1213

• It is recommended that you still take Medicare Part A(Hospital Insurance) when you first become eligible. If you or your spouse have paid taxes for 10 years, or 40 quarters, then your Part A will not have a premium, and may be used in addition to your employer coverage

• If you delay Medicare and you either have a planned retirement date, or were terminated short-notice, you have an 8-month window that begins the day after your last day of work, to complete the following steps in this order: 

• Download and print the "Request for Employer Information" form

1. Turn it in to your employer's HR Department. Do NOT fill it out. They must complete it and return it back to you
2. Apply for Part B Medicare (or Both A&B) by using your MySSA.gov account, visiting your local SSA office or by calling 1-800-772-1213.
3. Include the completed form with your Medicare application

• If your retirement date is planned, it is recommended you start the the process 2 months prior to your retirement date to avoid a lapse in coverage

• Failure to complete the above steps within the 8-month timeframe means you will have to wait until the next year's Medicare Open Enrollment Period (Jan 1-March 31) to enroll. You will also accrue permanent monthly Part B & Part D penalties for every month outside of that window where you are without Medicare

• You are allowed to have COBRA during the 8-month window, however, it doesn't exclude you from accruing late enrollment penalties if you keep it beyond that timeframe

If you have any other questions, or would like assistance with this process, please book an appointment with us so we can help you navigate the transition.

There are two programs that may be available to you if you meet certain income requirements: 

1.) Medicare Savings Program (MSP)

•  A federal program administered by your state's Medicaid system that eliminates part or all of your Part B Premium, co-pays, deductibles and coinsurance depending on what level you qualify for

• Is designed for those who have very limited income and resources

• Allows for Part B late enrollment penalties to be forgiven

• Eligibility is the same as for Original Medicare (See "Who is eligible for Medicare" FAQ above), as well as that you must be a resident of the state where you will apply for the MSP

• The federal government decides the income limits, while each state sets its own resource/asset limits. You will need to call either the Social Security Administration at 1-800-772-1213 or your state's local Medicaid office for more information on what the limits are and what information you need to apply

• The Medicare Savings Program is separate from your state's Medicaid system.  Go here to see if you qualify for Medicaid and start the application process with your state 

2.) Low Income Subsidies(LIS), also called "Extra Help with Part D"

• A federal program that reduces the cost of your out-of-pocket prescription drugs

• Is designed for lower income individuals

• Waives or lowers Part D Premiums, co-pays & deductibles

• Allows for Part D late enrollment penalties to be forgiven

• If you qualify for Medicaid, are receiving Social Security Income (SSI), or are enrolled in the Medicare Savings Program, you'll be auto-enrolled into LIS

• To find out if you qualify and to apply, visit https://secure.ssa.gov/i1020/start . Scroll to the bottom of the page to get started. Once completed, you can expect to receive a decision in the mail within 2-4 weeks

If you'd like some assistance, we are available to help guide you through the process at no cost to you. Simply call or book an appointment and we'll discuss what you need to do to get started.

Medicare Advantage plans are a  "bundle of services" offered by private insurance companies that include your Part A & B coverage, and sometimes Part D.

Medicare Advantage plans also have added benefits* not included in Original Medicare, such as: 

• Generous Dental Benefits
• Comprehensive Hearing coverage, including Hearing Aids
• Vision Benefits
• Complimentary Gym Membership
• Over-the-Counter Spending Money
• Healthy Food Allowance
• Complimentary Transportation
• Flex Spending Account to use toward certain healthcare or utility costs
• Capped out-of-pockets costs
• And more

*Benefit availability varies by plan and county of residence 

Most Part C plans have a $0 monthly premium.

As long as you are up to date with paying your Medicare Part B premium, you will stay enrolled in your Advantage plan

Anyone who is actively enrolled in Original Medicare Parts A & B can enroll into a Medicare Advantage Part C plan.

See the "Who is eligible for Medicare" FAQ above for more info on who qualifies for Original Medicare

Most of the time, yes. The Kaiser Family Foundation estimates that 89% of all Medicare Advantage plans include prescription drug coverage. These plans are referred to as MAPDs

In an HMO, or Health Maintenance Organization plan: 

• Coverage is limited to a smaller network of providers

• You are required to get a referral by your Primary Physician in order to see any specialists or get certain tests/images

• Out-of-pocket cost are typically lower

• Plan benefits are often more generous(ex: $2000 dental benefit with an HMO vs. $1000 with a PPO)

• Preventative healthcare is limited to your county of residence

• No out-of-network coverage, except in the event of an emergency

In a PPO, or Preferred Provider Organization plan:

• Access to a larger network of providers

• No referrals are required to see specialists

• Nationwide coverage

• Benefits are less generous

• Out-of-pocket costs may be higher

• May have an additional monthly premium

Yes. Some employers offer a Medicare Advantage plan as part of their retirement package, but you are not obligated to take it.

Here's some important things to consider:

• Employers often charge an additional monthly premium for their Part C plan

• Employers use the same private insurance companies for their plans as the Medicare Advantage plans available to the public

• Employer Medicare Advantage plans often do not have a "donut hole" 

• Some employers charge an additional premium for the prescription drug portion of their plan 

• If you opt out of enrolling into your employers Medicare Advantage Part C plan, typically you will not be allowed to re-enroll in the future

• It's important to speak with your employer's administrator about the costs and timelines that you may be facing before making any decisions

If you'd like a no obligation cost comparison or have other questions about switching to a private Part C plan, please call or book an appointment and we'd be happy to help

The great news is, yes, you can.

There are no disqualifying pre-existing conditions, and in fact, some Part C plans are tailored to lower out-of-pocket costs for those with certain chronic illnesses* such as diabetes, COPD, high blood pressure, heart disease & dementia.

If you would like to see about switching to one of these types of plans, please call or book an appointment and we'd be glad to help

*Plan availability varies by county of residence

Yes. If you have TRICARE for Life(TFL) or are VA connected, you may also have a Medicare Advantage plan.

Think of it like this:

1. TFL/VA is your military healthcare entitlement
2. Original Medicare is your federal healthcare entitlement
3. Medicare Advantage is an additional private health insurance plan
4. These 3 are meant to be used in tandem

Here are some other important things to know:

• You will never lose access to your TFL/VA benefits by combining them with a Medicare Advantage plan

• VA.gov* states "Funding for VA healthcare could change in the future. We encourage you to sign up for every healthcare benefit you're eligible for so you have options as you need them."

• Adding a Part C plan connects you to a network of civilian doctors and hospitals, giving you quicker access to care

• Medicare Advantage plans often have no additional monthly premium

• Some plans could help reduce your Part B monthly premium by as much as 70%**

• Veteran-focused Part C plans offer comprehensive dental, vision & hearing benefits that may be lacking using the VA alone

• You will not have co-pays, medical bills or any other out of pocket expenses other than your Part B premium. If you happen to receive a bill, simply click the link and follow the instructions to submit a medical, pharmacy or dental reimbursement claim. Go here to download a blank copy of the claim form for your records 

If you'd like additional guidance regarding TFL/VA & Medicare Advantage, please call or book an appointment and we'd be honored to assist

* Scroll down the page and expand the "If I already have VA healthcare benefits, should I still sign up for Medicare when I turn 65?" 

**Benefit availability varies by plan and county of residence

Only during certain times of the year, or under qualifying circumstances. 

If you are New to Medicare or decide your Part C plan is no longer a good fit, you may switch during the following:

Initial Enrollment Period (IEP)

• A 7-month window only available to those who are new to Medicare beginning 3 months prior to your birthday, the month of your birthday, and the 3 months following (See the "When is my Initial Enrollment Period" FAQ above for more on IEPs)

• The plan you have chosen at the end of this window is the one you will be enrolled in until next year's annual enrollment

Medicare Annual Enrollment Period (AEP)

• Runs annually October 15th-December 7th

• The plan you have chosen at the end of this window is the one you will be enrolled in which becomes active January 1

Medicare Advantage Open Enrollment Period (OEP)

• Runs annually January 1 -  March 31

• You are allowed a one-time change that you must keep until next year's Medicare Annual Enrollment Period

Special Enrollment Period (SEP)

• Can occur at any time during the year

• Is triggered by a qualifying event, which includes, but is not limited to:

1. Retiring and losing your employer coverage
2. Moving to a new county of residence, even if it's within the same state
3. Become newly qualified for extra financial assistance(such as gaining Medicaid)
4. Have been diagnosed with certain qualifying chronic health conditions
5. Live in a federally declared disaster area

For further guidance on this topic, or if you believe you have experienced a qualifying event, please call or book an appointment and we'd be happy to help

When you are within a qualifying enrollment period, there several ways:

• Go to Medicare.gov or call 1-800-MEDICARE
• Choose a company and call or go online
• Find a local broker

If you'd prefer a more tailored approach,  please call or book an appointment and we'd be happy to help you get started

You easily view and compare Medicare Advantage plans in your area by going here. (TX, WI, SC, MI, AZ only)

Simply input your doctors, meds and any health conditions to get a list of options that could be a good fit for you.

And remember, we're only a phone call away if you get stuck or have questions

Yes, you are required to have a qualifying drug plan in place while in Medicare, regardless of whether or not you take any prescriptions.

You will need to either enroll in a standalone drug plan or a Medicare Advantage plan with drug coverage (MAPD).

Failure to do so means you may face a permanent penalty if you are without qualifying drug coverage for too long

No. Prescription drug plans are offered by private insurance companies and are separate from Original Medicare

• Premium* - The monthly cost to keep your plan active**

• Deductible - The amount you must spend out of pocket before insurance covers its share**

• Copay - Your share of the cost to fill the prescription after the deductible is met.  You will pay this amount at the pharmacy or through your mail order company**

• Coverage gap (see Donut Hole FAQ below)

*See IRMAA FAQ  above regarding part D premium adjustments

** Varies by plan

There are sweeping changes coming to Part D drug costs in 2025. 

Go to our dedicated FAQ section below to read about what we know so far. 

*Note - These new rules regarding Part D are subject to changes/updates between now and enrollment season in the fall

Prescription drugs that are covered by your insurance will fall into 1 of 5 different tiers (This information below applies to 2024 plans ONLY.)

It's important to understand which tier your prescriptions are in because it also affects how much you pay at the pharmacy:

Tier 1:   Preferred Generic Drugs -

• Generic drugs are a low cost equivalent to Name Brand drugs. If there are multiple generic options available, Preferred Generics are the least expensive for you out-of-pocket because they are the option your insurance company would prefer you take 

Tier 2:   Generic Drugs - 

• These are also low cost options to Name Brand drugs, however, the cost to fill them will be slightly higher than Preferred Generic drugs

Tier 3: Preferred Brand Name Drugs - 

• The same as with Generics, Preferred Name Brand drugs are less expensive for you out-of-pocket because they are the option your insurance company would prefer you take 

Tier 4: Non-Preferred Name Brand Drugs -

• These are covered Name Brand drugs, however, the cost to fill them will be slightly higher than Preferred Name Brand drugs

Tier 5: Specialty Drugs - 

• These are typically the highest out-of-pocket Name Brand drugs. They are usually Biologics, which treat certain complex or rare conditions such as Rheumatoid Arthritis, HIV, IBD, and some cancers to name a few and have no generic equivalent

Plans update which drugs they cover on an annual basis, so it's important for you to review if there have been any changes to your insurance company's list of covered drugs, especially if you are prescribed a new one, in order to help keep your costs down

*NEW* Go here for important information on how Part D drug costs are changing in 2025

The Donut Hole is one of 4 phases of coverage for prescription drugs. These are important to know about because depending on which phase you are in will determine how much your out-of-pocket costs are.

They occur in this order: 

The Deductible Phase - 

You pay 100% of the full retail cost of covered prescriptions until you meet the deductible. The most a deductible can be in 2024 is $545, and for some plans it is as low as $0. 

Once you have met the deductible, you enter the Initial Coverage Phase.

The Initial Coverage Phase - 

The insurance company picks up the majority of the cost, and you only pay a pre-set copay or percentage. 

If the full retail value of your total drug costs (split between you and your insurer) have reached $5030 for the year, you enter the Donut Hole.

The Donut Hole Phase - You must pay 25% of the full retail cost of your prescriptions until you have paid $2970 out-of-pocket for the year.

As an example, if the retail price of X prescription is $1500/fill, you would pay $375 (25% of $1500) at the pharmacy for 8 fills before you would exit the donut hole for the year, since: 

• $375 x 8 fills = $3000 (meets the additional out-of-pocket requirement)

In 2024, once you meet a total of $8000 in drug costs($5030 retail price + $2970 out-of-pocket), you enter the Catastrophic Coverage Phase.

The Catastrophic Coverage Phase - Once you have exited the Donut Hole, 100% of your prescription costs are covered, with the exception of your premium, if you have one

It depends. 

Each insurance company has a formulary, which is a list of all the prescriptions they cover. If you take a prescription drug that is not on your insurance's formulary, you will be charged full price at the pharmacy.

It's also important to note that insurance companies update their lists of covered drugs annually, and sometimes a drug that was covered in the past is no longer and vice versa.

There is good news though!  See the FAQ below to learn the overlooked ways you can save on your prescription drug costs

Most of the time, yes. The Kaiser Family Foundation estimates that 89% of all Medicare Advantage plans include prescription drug coverage. 

These plans are referred to as MAPDs and typically have $0 monthly premium

See the "When Do I enroll in Medicare Advantage" FAQ in the section above

• Has a separate monthly premium with a private insurance company

• Satisfies the minimum requirement for drug coverage to be paired with Original Medicare Parts A & B

• Is recommended that you take a Medigap Supplement alongside Original Medicare & Part D in order to cap your medical out-of-pocket expenses. To learn more about why, see the Medigap Supplement FAQ section below

You may only be enrolled in a standalone Part D plan during certain qualifying periods:

Initial Enrollment Period (IEP)

• A 7-month window only available to those who are new to Medicare beginning 3 months prior to your birthday, the month of your birthday, and the 3 months following (See the "When is my Initial Enrollment Period" FAQ above for more on IEPs)

• The plan you have chosen at the end of this window is the one you will be enrolled in until next year's annual enrollment

Medicare Annual Enrollment Period (AEP)

• Runs annually October 15th - December 7th

• The plan you have chosen at the end of this window is the one you will be enrolled in which becomes active January 1

Special Enrollment Period (SEP)

• Can occur at any time during the year

• Is triggered by a qualifying event, which includes, but is not limited to:

1. Retiring and losing your employer coverage
2. Moving to a new county of residence, even if it's within the same state
3. Become newly qualified for extra financial assistance(such as gaining Medicaid)
4. Have been diagnosed with certain qualifying chronic health conditions
5. Live in a federally declared disaster area

For further guidance on this topic, or if you believe you have experienced a qualifying event, please call or book an appointment and we'd be happy to help

You can easily view and compare Part D drug plans & prices in your area by going here. (TX, WI, SC, MI, AZ only)

Simply input your doctors, meds and any health conditions to get a list of options that could be a good fit for you.

And remember, we're only a phone call away if you get stuck

You may qualify for Low Income Subsidies(LIS), also called "Extra Help with Part D", if you meet certain low-income requirements. 

LIS is a federal program that:

• Reduces the cost of your out-of-pocket prescription drugs

• Is designed for lower income individuals

• Waives or lowers Part D Premiums, co-pays & deductibles

• Allows for Part D late enrollment penalties to be forgiven

• If you qualify for Medicaid, are receiving Social Security Income (SSI), or are enrolled in the Medicare Savings Program, you'll be auto-enrolled into LIS

• To find out if you qualify and to apply, visit https://secure.ssa.gov/i1020/start . Scroll to the bottom of the page to get started. Once completed, you can expect to receive a decision in the mail within 2-4 weeks

The good news is that there are many overlooked ways to get your prescription drug costs down. 

• Sign up for a free GoodRX discount card

• Get your prescriptions mail ordered with your current insurance company (90 day supplies are often less expensive)

• Apply for drug company Assistance Programs/Manufacturer coupons (You'll need your doctor's help to get this process going)

• Use Specialty Pharmacies that work directly with doctors (Consult your doctor about the possibility of this option. YMMV)

• Ask if your doctor has samples of your prescription

• Talk to your doctor about switching to an equivalent or generic that is on your insurance's formulary, if available

• Ask your doctor to request a formulary exception with your plan (This is when the insurer agrees to cover a drug for medically necessary reasons when they normally wouldn't.)

• *NEW* - Use Online Pharmacies such as Mark Cuban's CostPlusDrugs.com or Amazon Pharmacy for savings on generic drugs(Prime Members pay $5/month with free shipping)

• Consider switching to a new standalone drug plan or Medicare Advantage plan that covers your prescription or has it in a lower drug tier

*This is not to be interpreted as medical advice. Please consult your doctor regarding any healthcare/prescription changes or needs. We are not affiliated with any company mentioned above.

In 2022, the Inflation Reduction Act (IRA) was signed into law making significant changes to Part D drug coverage which affects both Medicare Advantage and standalone Prescription Drug Plans. 

These changes will take effect in three major ways:

• Covered out-of-pocket drug costs will now be capped at $2000/year  (This amount will be adjusted yearly to coincide with inflation)

• You will no longer pay set copays at the pharmacy, but will instead be charged 25% coinsurance (This now includes all tiers of drugs, including generics)

• The Donut Hole (Coverage Gap) will be eliminated

These permanent changes will be effective January 1, 2025

Your Part D drug costs for covered prescriptions will now be billed in three different ways, called phases. 

Here's how they will work:

Deductible Phase - You pay 100%

• In this first phase, you are required to pay 100% of your drug costs, up to the 2025 maximum of $590 (Some plans will likely have a deductible of $0)

Initial Coverage Phase - You pay 25%, Your insurer pays 75%

• *NEW - Once you have reached your deductible, you will pay 25% coinsurance for all drugs covered by your insurer until you reach the $2000 max out-of-pocket

• *NEW - You now have the option to set up a payment plan with your insurer if the 25% coinsurance is too costly to pay up front (More about that below)

Catastrophic Phase - Your insurer pays 100%

• *NEW - Once you reach your $2000 out-of-pocket max, carriers and manufacturers pick up 100% of your drug costs for the rest of the plan year

It depends. 

Each insurance company has a formulary, which is a list of all the prescriptions they cover. If you take a prescription drug that is not on your insurance's formulary, you will be charged full price at the pharmacy.

It's also important to note that insurance companies update their lists of covered drugs annually, and sometimes a drug that was covered in the past is no longer and vice versa. We especially expect this to be the case in 2025.

There is good news though!  See the "How else can I save on my prescriptions?" FAQ below to learn about the overlooked ways you can save on your prescription drug costs.

Possibly. You may end up facing these charges in addition to your $2000 out-of-pocket max:

• Non-covered prescriptions will be charged at full price

• A pharmacy "dispensing fee" for filling your prescription

• Certain drugs administered by doctors or their care team (such as chemotherapy or biologics) will be covered under Part B Medicare and will not count towards your $2000 cap

Sure. Because you will be required to pay 25% of your drug's full retail price instead of a set dollar copay, it's possible that your pharmacy costs may be higher even though the overall out-of-pocket cap is much lower than in previous years.

To solve this, you will be able to sign up for a new program called the Medicare Prescription Payment Plan (MPPP). 

Here's what you need to know:

• The MPPP allows you to pay your annual prescription costs over time instead of being charged a larger sum at the pharmacy all at once(More about that in the next FAQ)

• You will need to voluntarily opt-in to the MPPP through your insurance carrier - there is no auto-enroll option

• You may opt in or  out at any time of the year and for any reason

• Your annual drug deductible is allowed to be included in the MPPP

• There are no income restrictions and as long as you meet some basic qualifications, anyone who is covered under Medicare can apply

• You are given a grace period of at least two months to pay, and carriers are not allowed to terminate the policy even if payment is not received within that timeframe

• If you previously set up an MPPP with a drug company but decide to switch plans, you are still responsible for making the original payments; however, you are permitted to initiate a new MPPP with the new drug company without penalty or delay

• The MPPP is only available for your covered Part D drug costs and is separate from your Part B and D (if applicable) monthly premiums, uncovered prescription costs and your Medical deductible, copays & coinsurance

MPPP's are meant to be easily accessible for seniors, but there are a few qualifications you must meet:

• Your monthly drug costs for covered meds must be $600 per month or more

• You must agree to make monthly payments for the remainder of the calendar year

•  You cannot be on LIS or the Medicare Savings Program

• MPPP's are only for covered drugs that count against your $2000 out-of-pocket max. Uncovered drugs are excluded

As an example, let's say your plan has $0 deductible, but the 25% co-insurance requirement now puts your covered monthly drug costs at $700. 

In this scenario, if you put in your request for an MPPP in January, your total drug cost would be capped at $2000 for the year by March, and your payment would be $166.66/month through December. 

From what we understand thus far, your monthly MPPP amount depends on when you initiate it, so your monthly payment *could* be more if you begin it later in the year. The above is just meant to be a simple illustration of how it might work for you and is subject to change.

The good news is that there are many overlooked ways to get your prescription drug costs down. 

• Sign up for a free GoodRX discount card

• Get your prescriptions mail ordered with your current insurance company (90 day supplies are often less expensive)

• Apply for drug company Assistance Programs/Manufacturer coupons (You'll need your doctor's help to get this process going)

• Use Specialty Pharmacies that work directly with doctors (Consult your doctor about the possibility of this option. YMMV)

• Ask if your doctor has samples of your prescription

• Talk to your doctor about switching to an equivalent or generic that is on your insurance's formulary, if available

• Ask your doctor to request a formulary exception with your plan (This is when the insurer covers a drug for medically necessary reasons when they normally wouldn't. Your doctor will get the process going)

• *NEW* - Use Online Pharmacies such as Mark Cuban's CostPlusDrugs.com or Amazon Pharmacy for savings on generic drugs(Prime Members pay $5/month with free shipping)

• Consider switching to a new standalone drug plan or Medicare Advantage plan that covers your prescription or has it in a lower drug tier

*This is not to be interpreted as medical advice. Please consult your doctor regarding any healthcare/prescription changes or needs. We are not affiliated with any company mentioned above.

These new changes to Part D drug costs are some of the most sweeping to happen to Medicare since 2006 when Medicare Advantage plans were first introduced. 

Because of that, it's more important than ever to communicate just how crucial it is to do a policy review heading into 2025. 

As of this writing (June 2024), these are the final key takeaways we feel you need to be aware of:

• While these are the initial rules and guidelines put out by the government, they are subject to being revised at any time

• Although the out-of-pocket max is $2000, it cannot be assumed that your drug costs will automatically go down or  that your drugs will remain covered under your current plan

• This legislation has shifted a significant financial responsibility onto insurance companies and it's unclear as of yet how they intend to compensate for that

From what we have been advised, it's possible carriers may:

• Move lower tier drugs(aka less expensive) to a higher tier, thus making them costlier at the pharmacy

• Remove certain higher tier drugs from being covered entirely

• Increase the monthly premiums of standalone Part D drug plans by at least 10% - 16% (estimated)

• Increase the out-of-pocket costs for the medical portion of your plan (Medicare Advantage plans only)

• Decrease certain benefits to Medicare Advantage plans (TBD)

While we won't understand the full scope of these changes until October, we do know that they are coming and that they will affect everyone a little bit differently.

As far as we can tell right now, these new rules will give huge financial relief to some, and may end up costing others a bit more at the pharmacy despite the new $2000 max out-of-pocket rule.

So, before the 2025 enrollment season begins, here's what we need to you to do to prepare:

• Don't auto-enroll! Instead, consider meeting with your agent to further discuss these changes, or if you prefer, schedule a time to speak with Aaron beginning October 1st (The sooner, the better!)

• Further educate yourself by reading our recommended links below

• Watch our video explaining these changes

Medigap plans, also called Medicare Supplement Insurance: 

• Are optional standalone plans that work alongside your Original Medicare Parts A & B

• Offer nationwide coverage with no networks or referrals needed (excludes most elective surgeries)

• Help lower your out-of-pocket costs that you might face with Original Medicare alone

• Typically have no or limited additional benefits that Medicare Advantage plans have (dental, hearing, transportation, etc.)  

•  Separate monthly premiums in addition to your Part B & Part D premiums (vary by state and company)

• May have a deductible up to $1632 in 2024

• Some plans have co-pays and coinsurance 

To view this year's cost chart, go to https://www.medicare.gov/health-drug-plans/medigap/basics/compare-plan-benefits

You can enroll in a Medigap Supplement when you first become eligible for Original Medicare Parts A & B regardless of your age.

Here are some other things to know:

• You have a 6 month open enrollment window to enroll in a Medigap plan , starting from the date of when your Part B becomes active

• If you enroll within the 6 month timeframe, you are guaranteed acceptance and no pre-existing conditions will disqualify you

• It's important to note that this open enrollment period is a once in a lifetime event

• You may switch plans during the enrollment window, but whichever one you have at the end, is what you will stay enrolled in

See the "Who is eligible for Original Medicare FAQ" for more on who qualifies

Yes. There are no enrollment period restrictions, meaning, you may enroll or choose a new plan at anytime of the year.

However, once you switch plans outside of your open enrollment, you will be subject to underwriting where insurers look at your current & past health conditions, procedures and medications. 

Unlike with Medicare Advantage, it is possible to be denied or charged a higher premium

Yes. If you are new to Medicare and initially signed up for Medicare Advantage, you trigger what's called your "Trial Rights Period".

Here's what that means:

• Since switching to Medicare is a big life change, you are allowed to "try-out" both Medicare Advantage and Medigap Supplements to see which is a better fit for you

• You are not required to try out both

• If you do, you must enroll in the Medigap Supplement of your choice within 12 months of when your Part B started, or 

• Within 12 months of when your Medicare Advantage plan became active, whichever comes later

• You are guaranteed acceptance during your Trial Rights Period and cannot be denied due to pre-existing conditions

• If you are beyond these timeframes, then your Trial Rights Period has ended and is no longer available to you

• You may switch to a Medigap supplement from a Medicare Advantage plan after your Trial Rights Period has ended, but you will be subject to underwriting

Plans of the same type are structured uniformly across all 50 states, however the monthly premiums will vary from company to company.  

As an example:

• A Plan N Supplement in New York state must have the same coverage benefits as a Plan N in Nevada, however, the monthly premium will vary between those states and the companies that offer them 

• Similarly, a Plan N in the same state may be offered by many companies, but the premiums will likely differ

Lastly, it's important to note that your monthly premiums are occasionally reassessed by your supplement company, and are likely to increase as you age.

If you'd like help further understanding your options, feel free to call or book an appointment and we'd be happy assist