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Prescription Drug Coverage under Medicare Advantage

Page Reviewed / Updated - February 07, 2020

Written By: Ellis Jackson

Medicare Advantage (MA) plans, also referred to as "Part C" plans, are provided by Medicare-approved private insurance companies. Under a Medicare Advantage plan, these companies provide coverage for Part A (hospital) and Part B (medical) services, as well as other benefits. They receive payments from Medicare to cover member benefits, whereas original Medicare benefits are paid for by the government.

Prescription drug coverage (Part D) is one of the benefits that concerns seniors the most, and not all Medicare Advantage plans include this coverage. This guide describes the different types of Medicare Advantage plans, the types of coverage they offer, and how to enroll in a plan that includes Part D coverage.

The Basics of Medicare Advantage

MA plans are required to provide all the services that original Medicare covers, except for hospice care, which is still covered by regular Medicare even for those enrolled in a Medicare Advantage plan. Emergency and urgent care are covered by all types of Medicare Advantage plans, including emergency services outside the plan's area, but within the United States. MA plans typically cost less and cover more services than original Medicare, especially prescription drug coverage, but finding in-network health care providers may be difficult if you travel frequently. MA plans often offer additional benefits including wellness programs such as SilverSneakers, routine vision and dental care, meal delivery, and prescription drug coverage.

Understanding Prescription Drug Coverage and MA Plans

There are six main types of Medicare Advantage plans, and your choice of plan should be based on your needs and budget, especially if you're taking any medications. Here's a brief overview of each plan:

  • Health Maintenance Organization: HMOs allow members to go to doctors or hospitals in the plan's network, with the exception of emergency care services. Seeing specialists or other doctors for testing may require a referral from a primary care physician.
  • Preferred Provider Organization: A PPO plan offers reduced costs for members who use in-network doctors, hospitals, and health care providers. Using providers outside the network costs more.
  • Private Fee-for-Service: Like original Medicare, a PFFS plan allows you to visit any doctor, hospital, or health care provider who accepts the plan. Out-of-pocket costs depend on the plan's payment terms.
  • Special Needs Plan: An SNP provides specialized health care to certain groups of people, such as nursing home patients, those on both Medicaid and Medicare, and those who have chronic health impairments.
  • Health Maintenance Organization Point-of-Service: These are special HMO plans that allow members to receive out-of-network care with higher copay or coinsurance costs.
  • Medical Savings Account: An MSA is a combination of a high-deductible health plan and a bank account. Money deposited into the account by Medicare can be used to pay for health services.

While prescription drugs are often covered, applicants should check the terms of a specific plan, since it may be necessary to add a Part D plan as a supplement. For example, all SNPs must provide Medicare prescription drug coverage, but an MSA doesn't provide drug coverage at all.

Most HMO (and HMOPOS), PPO and PFFS plans include coverage for prescription drugs. However, the enrollment rules differ by plan type. To get prescription drug coverage under an HMO or HMO POS plan, you should choose one that offers Part D coverage. To get prescription drug coverage with a PPO plan, you must select one that offers Part D coverage. If you don't enroll in a PPO with this coverage, you're not allowed to subsequently join a Medicare prescription drug plan. PFFS plans, on the other hand, allow you to join a Part D plan if the PFFS plan doesn't offer prescription drug coverage itself.

The cost of each Medicare Advantage plan varies. Members pay a monthly premium for all of the services included in Medicare Advantage in addition to their Part B premium. Plans change from year to year, so before you enroll, you should compare the costs and any restrictions between local health care providers.

How to Enroll in a Medicare Advantage Plan with Prescription Drug Coverage

There are several ways to enroll in a Medicare Advantage plan, and finding plans with prescription drug coverage is relatively easy. The most thorough method is to use Medicare's Plan Finder. Although it can be confusing at a glance, this online tool allows you to compare every Medicare plan available in your area. Plans can be filtered according to your desired criteria (cost, plan type, perks, etc.) and then evaluated side-by-side.

After entering a zip code and performing an initial search, you'll be asked some questions to determine which plans are displayed in the results. One of these is "Would you like to add drugs?" If you select "I don't want to add drugs now," the search results will include plans without drug coverage, but it can be added later. The advanced search options include adding specific medications.

Generally, Medicare Advantage plans allow applicants to join online, and you can check a plan's website to see if this option is available. However, all plans must offer a paper enrollment option, and you can contact the plan provider to receive a physical form, and then fill out and return it.

People who aren't tech-savvy or who need more assistance can enroll in a Medicare Advantage plan over the phone by calling 1-800-MEDICARE (1-800-633-4227). A representative will go through the entire enrollment process and gather any necessary information, including details about medications. Be aware that Medicare plan providers aren't allowed to call you about enrollment without permission, and asking for financial information is also forbidden.

To join a Medicare Advantage plan, you must have Medicare Parts A and B, and live in the plan's service area. You'll be asked to provide your Medicare number, and the start dates of your Part A and B coverage, both of which can be found on your Medicare card. People suffering from end-stage renal disease (ESRD) are generally ineligible for a Medicare Advantage plan.

FAQs

Q: I enrolled in a Medicare Advantage plan. Now what?

A: After you enroll, you should receive the following information from the insurance company:

  • Confirmation number
  • Notice that your application has been received by the insurer
  • Acceptance/rejection notice
  • Proof of coverage and effective date
  • List of uncovered charges
  • One-year lock-in requirement (barring special circumstances)

You should contact your insurance company if you're missing information or have questions about your enrollment.

Q: I already have a Medigap policy. Should I enroll in a Medicare Advantage plan for prescription drug coverage?

A: It's illegal for anyone to sell you a Medicare Advantage plan while you have a Medigap policy, which means you still have original Medicare. If you've done a cost comparison and decide to enroll in an MA plan, you can't keep your Medigap policy, so you can drop it. Be warned, however, that you may not be able to get the same type of policy back once it's been dropped, so switching coverage should be given careful thought.

Q: How do I get Medicare Part D coverage with a Medicare Advantage plan?

A: You can enroll in a Medicare Advantage Prescription Drug (MAPD) plan when you turn 65 and switch during the open enrollment period that runs from October 15th through December 7th.

Q: How much does a MAPD cost?

A: Since these plans are offered through Medicare-approved private insurance companies, costs can vary. You should expect to pay a monthly premium, though some service areas have plans with premiums of $0 per month. This doesn't include the cost of copayments, coinsurance, deductibles and the Medicare Part B premium.

Q: Which drugs are covered?

A: Medicare Part D has a standard level of coverage, but prescription drug coverage through MA depends on the plan you choose. You can use the Medicare Plan Finder to search for plans that cover specific medications. Most plans have their own list of drugs, called a formulary, and divide them into "tiers," from low copayments to high copayments. If a formulary doesn't include your specific drug and there are no alternatives available, it's possible to ask for an exception.