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Fall 2019  Volume 12, Number 3        

Medicare puzzle piece

Important Changes to Medicare Part D

If you're retired and have health care coverage through Medicare Advantage Part C or Original Medicare and a Part D plan, you should know that a few changes have been made.

The Centers for Medicare & Medicaid Services (CMS) issued a final rule this year to modernize and improve the Medicare Advantage and Part D programs.

Medicare is the federal health insurance program for those 65 or older; or who have disabilities; or have End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).

Medicare Part A often is referred to as hospital insurance. Part A covers inpatient hospital stays; care in a skilled nursing facility; hospice care; and some home health care. Coverage is free. Medicare Part B, also known as medical insurance, covers some doctors services; outpatient care; medical supplies; and preventive services. Coverage costs $134 per month. If you do not sign up for Part B when you turn 65, and if you do not have health coverage, you will have to pay more for Medicare Part B when you do decide to get coverage.

Some retirees want more than what Part A or B provide, since for the most part, neither one provides drug coverage. Medicare Part C is a Medicare Advantage plan, an option providing the same coverage as Original Medicare (Parts A and B) — but with additional benefits, such as routine vision services and prescription drug coverage. An interesting fact is that average Medicare Advantage premiums dropped by more than 30 percent in first quarter of 2019, according to data released by eHealth.

For those who are happy with Part A or B, but want drug coverage, they can go with Medicare Part D, known as prescription drug coverage, which adds coverage to Medicare A or B. Keep in mind that you can't have a Medicare Advantage Plan and Part D coverage at the same time.

New Rules

The new rules ensure that patients have greater transparency into the cost of prescription drugs in Part D and also enables Medicare Advantage plans to negotiate better prices for physician-administered medicines in Part C.

The changes include:

Part D Protected Classes

A drug formulary is a list of prescription drugs, both generic and brand name, that are covered under a plan. Part D policies must include these six drug classes on their formularies:

  1. antidepressants
  2. antipsychotics
  3. anticonvulsants
  4. immunosuppressants (for treatment of transplant rejection)
  5. antiretrovirals (first-line HIV treatment )
  6. antineoplastics (anticancer drugs) (except in limited circumstances)

The rules also codified an existing policy specifying that Part D sponsors can only impose prior authorization and step therapy requirements for those who are starting a new drug regime for five of the six protected classes, with no prior authorization or step therapy allowed for antiretrovirals. Step therapy is a procedure where the patient is required to try a generic drug before moving to the more expensive brand name drugs.

E-Prescribing and the Part D Prescription Drug Program

An electronic Real Time Benefit Tool (RTBT) gives prescribers visibility to cost and coverage information within their electronic health record (EHR). CMS requires each Part D plan sponsor to adopt one or more RTBTs capable of integrating with at least one prescriber's electronic health record. This must be in place no later than Jan. 1, 2021.

Medicare Advantage and Step Therapy for Part B Drugs

CMS will soon finalize regulations to require step therapy for Part B drugs. Part B step therapy regulations include a number of safeguards protecting beneficiaries and ensuring timely access to "new starts" for medically necessary Part B drugs.

Part D Explanation of Benefits

Beginning in 2021, Part D Explanation of Benefits should include information about how Medicare beneficiaries can lower their out-of-pocket costs by considering a lower cost medication.

Prohibition Against Gag Clauses in Pharmacy Contracts

Part D sponsors cannot prohibit or penalize a pharmacy from disclosing a lower cash price to an enrollee.


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In this issue:

This Just In...

Benefits of Hospital Indemnity Insurance

Important Changes to Medicare Part D

What to Know: Long-term vs. Short-Term Disability Insurance

Travel Insurance for Peace of Mind


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