Popular Donut Hole Questions

During this time of year, many people will begin to enter the Coverage Gap or “Donut Hole” portion of their Medicare Part D coverage and find their coverage costs changing.

If you have already purchased medications with a retail value of $4,020 you are in the 2020 Donut Hole.

Question:  I have purchased medications worth $3,930 so far this year, my next brand-name drug purchase has a retail cost of $400, bringing me into the Donut Hole (or Coverage Gap).  Will I get a Donut Hole discount on the full $400 retail price or just the $90 that falls into the gap?

Your Donut Hole discount (which is 25%) only applies to the $90 portion of the retail drug price that falls into the Coverage Gap.  Since your purchase “straddles” two phases of coverage, you pay your cost-sharing for the Initial Coverage phase (for example, $47 for a Tier 3 brand drug) and the brand-name Donut Hole discount applies to the remainder of the retail price falling into the Donut Hole.

Therefore, your total drug cost is the cost-sharing you paid in the Initial Coverage phase plus the discounted cost in Donut Hole. (Note: The combined cost of the Initial Coverage phase and the Donut Hole phase will never exceed your drugs total retail cost.)

Question:  If I use only one brand drug that costs $347 and have a $47 co-pay, will I enter the 2020 Donut Hole?

Yes. If your retail drug costs average $347 you will exceed your Medicare plan’s Initial Coverage Limit of $4,020 and enter the 2020 Coverage Gap or Donut Hole sometime in November.

Only your plan’s retail drug costs count toward entering the Donut Hole. Your co-pay has no impact on entering the Donut Hole, but will impact when you exit the Donut Hole.

Question:  I am in the Donut Hole and now have a new prescription that is not on my plan’s list of covered drugs.  Do I get a discount on my new medication and will my costs count toward getting out of the Donut Hole?

No. Only Medicare Part D prescription medications found on your plan’s formulary receive the 75% discount. Non-formulary medications and medications excluded from the Medicare Part D program, do not qualify for the Donut Hole discount and your non-formulary drug purchases do not count toward meeting your 2020 total out-of-pocket drug spending (TrOOP) limit of $6,350 — the amount you need to spend to exit the Donut Hole.

If you are using a non-formulary medication, you can ask your Medicare plan for a Formulary Exception which is a type of Coverage Determination.

If your Medicare Part D plan denies your request, you have the right to appeal your plan’s decision.  For more information, you can click here to read about Formulary Exceptions. https://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/Exceptions.html

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Medicare Part C is available through Medicare Advantage plans, and is an alternative to Original Medicare (Parts A and Part B). Medicare Advantage plans are health insurance plans offered by private health insurance companies approved by Medicare. Medicare Advantage health plans (such as HMO, PPO or PFFS plans) are legally required to offer at least the same benefits as Original Medicare, but can include additional coverage as well, such as routine vision or dental benefits, health wellness programs, or prescription drugs.

One benefit of Medicare Advantage plans is that you can get your prescription drug benefits (Medicare Part D) included under the same plan, instead of having to enroll in a separate stand-alone Medicare Prescription Drug Plan. These plans give you the convenience of having your Medicare Part A, Part B, and Part D coverage through a single plan.

Medicare Advantage plan costs and coverage details can vary depending on the insurance company and county that you live in.

What are the different types of Medicare Advantage plans?

As mentioned, Medicare Part C coverage details can vary depending on the insurance company, so it’s always a good idea to compare the Medicare Advantage plan options in your specific location. The following are types of Medicare Advantage plans that may be available in your location:

Health Maintenance Organization (HMO) plans: These plans offer a network of doctors and hospitals that members are generally required to use to be covered. Because of this, HMOs tend to have strict guidelines, meaning that any visits and prescriptions are subject to the plan approval. If you use providers outside of the plan network, you may need to pay the full cost out of pocket (with the exception of emergency or urgent care). You generally need to get a referral from your primary care doctor to see a specialist.

Preferred Provider Organization (PPO) plans: Medicare Advantage PPO plans offer a network of doctors and hospitals for beneficiaries to choose from. Unlike an HMO, you have the option to receive care from health-care providers outside of the plan’s network, but you’ll pay higher out-of-pocket costs. Medicare Advantage PPOs don’t require you to have a primary care doctor, and you don’t need referrals for specialist care.

Private Fee-for-Service (PFFS) plans: This type of plan allows visits to any Medicare-approved doctor or hospital, as long as the plan’s terms and conditions of payment are accepted by the provider. Keep in mind that you’ll need to find providers that contract with the plan each time you are receiving treatment.

Special Needs Plans (SNPs): These plans limit enrollment to beneficiaries who have certain chronic conditions, are institutionalized, or qualify for both Medicare and state Medicaid (also known as dual eligibles). Benefits, provider options, and prescription drugs are tailored to meet the needs of the plan’s enrollees.

How do I know if I am eligible for a Medicare Advantage plan?

In order to be eligible for Medicare Part C, you must be enrolled in both parts of Original Medicare (Part A and Part B). Once you have Medicare Part A and Part B, you are generally able to enroll in a Medicare Advantage plan, provided you live in the plan’s service area and do not have end-stage renal disease (ESRD).

There are some exceptions where you may be able to enroll in a Medicare Advantage plan even if you have end-stage renal disease. For example, if you’re enrolling in a Special Needs Plan that targets beneficiaries with end-stage renal disease, you may be eligible to enroll in this type of Medicare Advantage plan.

To learn more about other situations where you may be eligible for Medicare Part C if you have end-stage renal disease, you can contact us using the contact page on this site. You can also contact Medicare at 1-800-MEDICARE (633-4227); 24 hours a day, seven days a week.

Those with other health insurance coverage (a union or employer-sponsored health plan, for example) should get more information about their existing coverage before enrolling in a Medicare Advantage plan. It is possible you could lose your existing coverage once you enroll in a Medicare Advantage plan. Furthermore, if you discontinue the other plan for Medicare Part C coverage, you may not be able to reinstate your original coverage if you change your mind. It is generally a good idea to check with your current benefits administrator before you enroll in another health-care plan.

Read more about other types of plans and options …

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Special Needs Plans are a type of Medicare Advantage plan that is specifically designed for people who meet certain eligibility criteria. These plans cater their benefits to serve the unique needs of its members.

There are three types of Special Needs Plans (SNPs) available:

Dual-Eligible Special Needs Plans (D-SNP) for individuals who are entitled to Medicare and who are also eligible for some level of assistance from a state Medicaid program or MaineCare.

Chronic-Condition Special Needs Plans (C-SNP) for individuals with one or more of the following conditions: diabetes, cardiovascular disorders, chronic heart failure and chronic lung disorders such as COPD.

Institutional Special Needs Plans (I-SNP): These plans serve those living in an institution (such as a nursing home) or who need nursing care at home.

If you fall into any of the categories above, you may have unique health-care needs that a Special Needs Plan may be better equipped to address.

For example, some Special Needs Plans offer a larger network of providers that specialize in treating your condition or lower costs for the prescription drugs typically prescribed for your particular illness.

Special Needs Plans benefits

Like other Medicare Advantage plans, Special Needs Plans are available through private insurance companies that are approved by Medicare. All Medicare Advantage plans are required to offer at least the same level of coverage as Original Medicare, Part A and Part B. Some Medicare Advantage plans may also cover benefits beyond what Original Medicare covers, and your Medicare plan options and benefits can vary, depending on where you live. You can read more about Medicare Advantage plans here.

Some Special Needs Plans include care-coordination services to help you better understand your condition and stick to your doctor’s treatment regimen. Or you might have access to wellness programs to help with a special diet or other lifestyle activities that can help improve your condition.

Chronic-Condition Special Needs Plans may include provider networks with physicians and hospitals that specialize in treating the specific condition of its members, or they may have drug coverage that is tailored to include the prescription drugs that treat your illness.

If you’re enrolled in a Special Needs Plan for dual eligibles, there may be certain social services available to help you coordinate your Medicare and Medicaid benefits.

It’s important to note that you still get all the coverage that is otherwise included with Original Medicare, Part A and Part B, and Medicare Part D. The Special Needs Plan simply offers extra coverage to help you better manage your particular situation, whether that’s living in a nursing home; coordinating your Medicare and Medicaid benefits; or treating a serious chronic illness.

Getting help with costs

If you have both Medicare and Medicaid or if you have limited income, Medicaid may be able to cover some or all of your Medicare Advantage Special Needs Plan’s premiums and/or out-of-pocket costs. Depending on your income levels, you may qualify for a Medicare Savings Program, which can help pay for costs like premiums, copayments, coinsurance, or deductibles.

Contact your state’s Medicaid office for more information, or call 1-800-MEDICARE (TTY users 1-877-486-2048), 24 hours a day, seven days a week. Or contact me directly at (207) 370-0143 for help understanding all the benefits that are available to you.

Medicare Advantage Special Needs Plans costs

Depending on the Special Needs Plan, you will typically have the following costs:

• Medicare Part B premium
• Monthly premium for your Special Needs Plan (if your SNP requires it)
• Extra monthly premium for prescription drug coverage (if your SNP requires it)
• Extra monthly premium for additional benefits (if your SNP requires it)
• Cost-sharing expenses, such as copayments, coinsurance, or deductibles*

*Please note: If you are a dual eligible, your Special Needs Plan can’t have higher cost-sharing requirements than you’d normally pay in Medicaid or Original Medicare, Part A and Part B.

Keep in mind that your specific costs may vary, depending on if you qualify for financial assistance or get both Medicare and Medicaid benefits.

Your out-of-pocket costs will also depend on the type of health-care services you need and how often you need them. Each Special Needs Plan is different so you should review the specific plan materials for the plan you’re considering to see exactly how much you’ll have to pay.

Make sure you pay particular attention to the differences in your cost sharing when you use the plan’s in-network doctors versus out-of-network doctors (if the plan allows you to go outside it’s network).

Enrolling in a Medicare Advantage Special Needs Plan

You can enroll in a Special Needs Plan once you’re first eligible for Medicare if there is a Special Needs Plan in your service area for your target group and you meet the eligibility requirements of that plan.

Most people are first eligible for Medicare during their Initial Enrollment Period, the seven-month period that starts three months before your 65th birthday, includes your birthday month, and ends three months later. If you qualify for Medicare because of disability, your Initial Enrollment Period starts three months before the 25th month that you are receiving Social Security or Railroad Retirement Board disability benefits and lasts seven months.

You can also enroll in a Special Needs Plan during the Annual Election Period from October 15 to December 7 of every year. During this period, you can enroll in a Special Needs Plan for the first time, switch plans, or disenroll from your plan.

Outside of these periods, you may be able to join a Special Needs Plan with a Special Election Period in certain situations. Some situations that may qualify you for a Special Election Period to enroll in a Special Needs Plan or make coverage changes include:

• You are diagnosed with a severe or disabling condition: You can enroll in a Chronic-Condition Special Needs Plan for beneficiaries with your illness at any time, and your Special Election Period ends once you enroll in the plan.
• You move into, currently live in, or leave a nursing home: You can enroll in a Special Needs Plan or switch plans at any time.
• You qualify for Medicaid: If you have Medicaid or are newly eligible for Medicaid, you can enroll in a Medicare Special Needs Plan at any time.
• You move outside of your Special Needs Plan’s service area: You can use a Special Election Period to switch to a new plan, or you’ll be automatically returned to Original Medicare.
• Your Special Needs Plan leaves the Medicare program: You can use a Special Election Period to switch to a different Special Needs Plan.

Still have more questions?

Contact me for answers using this form –> https://www.mainemedicareoptions.com/contact

Need more help comparing the different health insurance plans?  I can help you.

There are different ways to get Medicare health benefits.

• Original Medicare (traditional fee-for-service coverage by the federal government) alone.
• Original Medicare with supplemental insurance, like a Medigap or retiree plan or
• A Medicare Advantage Plan

Original Medicare

If you are over age 65 then you are most likely eligible to enroll in Original Medicare (Part A and Part B). This is the traditional health insurance program run by the federal government. It allows you to go to almost any doctor or hospital in the country. Original Medicare covers most of the health services that you need. If you have Original Medicare, you can see any doctor or visit any hospital in the country as long as they accept Medicare payments.

Original Medicare does not over prescription drugs and there is no financial protection (out of pocket limit) with Original Medicare.

Medigap – Supplemental Insurance

To fill gaps in Medicare coverage, many people have additional insurance called supplemental insurance. You can get supplemental insurance from an employer or you can buy it from an insurance company in the form of a Medigap policy that specifically fills gaps in Medicare. Click here to learn more about Medigap plans.

Medicare Advantage (Part C)

Some people get their Medicare benefits through a Medicare Advantage Plan. Medicare Advantage Plans are sold by private insurance companies and offer Medicare benefits. A Medicare Advantage Plans can be a Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Point of Service (POS) plan, Provider Sponsored Organization (PSO), Private Fee-for-Service (PFFS) plan, Special Needs Plan (SNP), or Medicare Medical Savings Account (MSA). These plans must offer at least the same benefits as Original Medicare, but have different rules, costs, and coverage restrictions. Click here to learn more about Medicare Advantage Plans.

If you have health coverage from current employer or your union when you become eligible for Medicare, your coverage may automatically convert into a Medicare Advantage Plan. You have the choice to stay with this plan, choose Original Medicare, or switch to another Medicare Advantage Plan. Be aware that if you switch to Original Medicare or another Medicare Advantage Plan instead, the employer or union could terminate or reduce your health benefits, the health benefits of your dependents, and any other benefits you get from your company. Talk to your plan before switching to find out how your health benefits and other benefits will be affected. Click here to learn more about working after age 65.

Part D – Prescription Drug Plans

If you would like to get the Medicare drug benefit (Part D), you must choose Medicare drug coverage that works with your Medicare health coverage. If you prefer to have Original Medicare, choose a stand-alone drug plan that just offers drug coverage. Each of these plans are different and cover different drugs, they also negotiate their prices individually so the costs to you can vary widely. Choosing the right drug plan should be done with some assistance from a professional who understands these plans and can help you find the overall least expensive plan. Click here to read more.

Would you like my help?

If you would like to talk to me or schedule a meeting at your home or a nearby meeting place, you can reach me at 207-370-0143 or use my simple form on the CONTACT ME page of this site to send an email message.  The best part about working with me is that it will not cost you anything to meet with me to discuss your options or to review the plans that are available.  I am paid by the insurance companies in the form of a commission if you enroll in a plan.  You will not pay any more than anyone else and you are under no obligation whatsoever to enroll in any plans if you meet with me. 

“My goal is to help you and I have found great joy in being able to offer my services to people who need my help.”