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Nov. 28, 2022

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Prescription Drugs and Medicare: What You Don’t Know Can Cost You

Here is what you need to know about prescription drugs and how to get a plan for them while on Medicare

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Here is what you need to know about prescription drugs and how to get a plan for them while on Medicare.

First, it’s imperative to know that there’s no drug coverage in Original Medicare (Parts A & B). Whether you take prescriptions or not, it’s important to secure this coverage mostly through a stand-alone Part D plan or a Medicare Advantage plan both offered through private companies. If you don’t opt in to this “optional” coverage the government will assess a penalty that currently is slated to last for the rest of your life.

Whichever method you choose the things to know about are the deductibles, co-pays and co-insurance, which can vary between companies. In 2023 a Prescription Drug Plan can have a deductible up to $505 per year, yet others may not have one at all.

After the deductible phase of drug coverage, the insurance company shares the cost with its members through copays or coinsurance until the total paid out by both reaches $4,660. This is known as the coverage gap or “donut hole”. While in this phase you’ll pay 25% of the cost of your prescription medications until your total out-of-pocket costs reach $7,400. In this last phase of drug coverage brand name drugs will cost $10.35, generics will be $4.15 OR either one could be 5% of the cost of the drug, whichever is more.

Surprising to many is the fact that as early as 3 weeks after the annual enrollment period ends on December 7, insurance companies can change what they charge for their drugs and can do it repeatedly. However, no matter how high the prices go, a member cannot change plans after Jan. 1. Medicare officials acknowledge this problem but have yet to address it.

One form of relief that was signed into law this year is the Inflation Reduction Act of 2022. This will cap the amount a person pays for prescription drugs to no more than $2000. However, this change will not go into effect until 2025.

Still feeling confused about how all of this works? It’s important to figure it out because the bottom line can affect your bottom line. Local brokers like Stacey Johnson at Your Insurance Gal Agency can help to sort out all the moving parts and make sure all your medications are covered in the best way possible, help you delay or avoid the donut hole and make all the difference in how much money you get to keep in your wallet.

Your Insurance Gal Agency

Open 9am to 5pm Monday – Friday
(Evenings and Saturday by appointment)
113 NE 92nd Ave, Vancouver, WA 98664
Website: YourInsuranceGal.com
Phone: (360) 771-1155
Facebook: facebook.com/YourInsuranceGal

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