Prescription Drug Plans
Prescription drug plans are the part of medicare that is the most concerning. The Medicare-approved drug plans have 4 phases
1. Deductible Phase - In the deductible phase you are required to pay the full cost of your prescription drugs until you meet the deductible. The deductible varies by plan but cannot be more than the deductible set for the current year by the Centers of Medicare Services. Some plans have a $0 deductible and some have the max allowed by medicare for the year. There are also some plans that have certain tiers that you can get without paying towards the deductible
2. Initial Coverage Phase - Once you meet the deductible phase, you move to the Initial phase. In this part, you pay a Copay or Co-insurance to pick up your drugs. You will stay here until your drug costs exceed the coverage gap threshold.
3. Coverage Gap Phase - After your drug costs reach the coverage gap threshold, you pay 25% the cost of your drugs, some plans do have some additional coverage through the coverage gap.
4. Catastrophic Phase - Once you reach your true out-of-pocket (TrOOP) you will pay smaller co-pays or co-insurance for the rest of the year.
I am not going into the details of the cost points of each stage as what's more important is choosing the plan that fits your drugs the best, some or all of these stages could apply, or may not, it just depends on what you take and who the coverage is with.
Coverage Tiers
With Medicare, all drugs do not have to be covered but at least one drug of every category must be covered. So no matter what you take there will be a medication you can get.
The Medications are organized into Tiers:
Tier 1 (Preferred Generics) - This is the lowest cost tier of drugs, there are usually generics and common inexpensive drugs.
Tier 2 (Non-Preferred Generics) - This is the second-lowest tier for Prescription drugs. It is still generic drugs but they are a little more expensive and less common than the tier 1 drugs.
Tier 3 (Preferred Brand Name Drugs) - These are the common brand name drugs
Tier 4 (Non-Preferred Brand Name Drugs) - These are the rest of the brand name drugs
Tier 5 (Specialty Tier) - These are your most expensive and usually combination drugs.
Some plans also have a Tier 6 (Select Care Drugs) - These are usually drugs to help with certain chronic conditions that are being covered at a very low cost for the beneficiary.
