How PDP Plans Work
By now you probably have a good idea of what Medicare Part D is and the difference between PDP and MA-PD plans. The next step is understanding how Medicare Part D works.
It’s important to note that the level of coverage you have under your Medicare prescription drug plan may change throughout the year. This change depends on which stage of coverage you are currently in. Learn more about the stages of coverage below.
Stage 1: The Deductible
The first stage occurs at the beginning of your prescription drug coverage. This is the period when you pay for your prescription drugs in full until you meet your yearly deductible amount. After the deductible is met, you move into the Initial Coverage stage.
Some plans do not have a yearly deductible. Under these plans, you would begin in the Initial Coverage stage.
Stage 2: Initial Coverage
In this stage, you will either pay a copay or coinsurance (a percentage of the drug’s cost) when you have a prescription filled. This stage lasts until you and your plan reach $4,020 in 2020 drug spending, at which time you move into the Coverage Gap stage.
Stage 3: Coverage Gap
This stage is commonly referred to as the “Donut Hole.” It occurs after you and your plan reach $4,020 in 2020 in drug spending. During the Coverage Gap stage, you are usually responsible for paying a higher portion of the drug cost. After your true out-of-pocket costs (TrOOP) reach a total of $6,350 in 2020, you move into the Catastrophic Coverage stage. Out-of-pocket costs include your annual deductible as well as your copayments or coinsurance. Premiums do not count towards TrOOP.
Note: Some plans provide additional coverage in the Coverage Gap, which can lower your share of the cost for drugs during this stage.
Stage 4: Catastrophic Coverage
After you reach a total of $6,350 in 2020 in out-of-pocket expenses, you will start paying a different copay or coinsurance for both generic and brand-name prescription drugs. In the Catastrophic Coverage stage, copays are typically lower than during the Initial Coverage stage. This stage lasts until the end of the plan year.
When comparing plans to decide which one is right for you, there are certain things to keep in mind. You should be aware that many drug plans use rules, programs and restrictions to help control costs and ensure patient safety.
For some drugs, some Medicare prescription drug plans may have a coverage rule that requires you to try one or more alternative, lower-cost prescription drugs to treat your health condition before the plan will cover the prescribed drug. For example, if your doctor or other prescriber prescribes Drug A, but Drug B also treats your medical condition, your plan may require that you try Drug B first. If Drug B does not work for you, then the plan may cover Drug A as originally prescribed.
Some plans require approval before a certain prescription drug is covered. For certain prescription drugs, additional coverage requirements may be in place to ensure that our members use these drugs in a safe way, while also helping to control costs for everyone. We require that you obtain SilverScript Medicare Part D Formulary Prior Authorization (prior approval) before certain drugs will be covered under the plan. To receive that approval, you and/or your doctor or other prescriber must complete and submit a Prior Authorization request.
This restriction occurs when the plan only covers a certain quantity of a particular prescription drug. If your doctor or other prescriber feels it is medically necessary to exceed the limit, you or your doctor or other prescriber must request an Exception before the higher quantity can be covered.