Medicare 101

Dr. Sharon Orrange
Dr. Orrange is an Associate Professor of Clinical Medicine in the Division of Geriatric, Hospitalist and General Internal Medicine at the Keck School of Medicine of USC.
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Open Enrollment? Part D? Doughnut hole?

Patients come in to the office with pages and pages of printouts asking for advice about their prescription drug plan among other things. Truth is physicians are terrible at this as are many family members of Medicare recipients. Here are some of the basics, broken down Gangnam style.

1. Open enrollment season for Medicare started October 15 and ends December 7. This is the period of time Americans over the age of 65 will need to sort out rules on co-pays and deductibles, formulary coverage (which drugs are covered by which plan), and how the Affordable Care Act (ACA) has changed things for them.

2. Medicare Part A is the part that covers inpatient care in hospitals and skilled nursing facilities.

3. Medicare Part B covers outpatient care. This includes your physician visits and physical therapy. Part B also covers x-rays, vaccinations, chemotherapy, and other outpatient medical treatments administered in a doctor’s office. Examples would be infusions of medications for osteoporosis, rheumatoid arthritis, or cancer given in the doctor’s office.

4. Medicare Part C aka “the Medicare Advantage Program” is a little confusing. Medicare Advantage Plans are offered by private companies approved by Medicare. So a private company contracts with Medicare to provide you with all your Part A and Part B benefits.

Medicare Advantage Plans include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren’t paid for under original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.

5. Medicare Part D. This is an outpatient prescription drug benefit. Unlike Part A and Part B, Part D is not standard. Though the different Part D prescription drug plans are regulated by Medicare, they are private insurance companies who can decide which drugs they cover. Many folks have up to 40 Part D plans to choose from and are left finding the one that best fills their needs.

6. Part D is important because this is how Medicare patients pay for their prescription drugs. You must also learn about the coverage gap, aka the “doughnut hole.” When the amount of money you have paid (as your deductible) together with what Medicare has paid exceeds $2,900 you become responsible for 100% of your medication costs. Wait there’s more: if you reach about $4,700 in out-of-pocket spending Medicare foots most of the bill for the rest of the year.

7. 2012 changes: Some cool changes occurred in 2012 when patients were responsible for only 50% of the cost of branded drugs instead of 100%. The affordable care act (The ACA) anticipates closing the doughnut hole by 2020 at which point Medicare would continue to cover part of the drug costs and you would pay 25% instead of 100%.

On Goodrx you can search for the price of your prescriptions based on which Part D plan you have and in some cases you may find the cash-pay price is cheaper than using your insurance. That part, at least, is easy.

Dr O.

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