Seniors Living Healthy - Episode 3

Everything You Need to Know about Medicare Part D

Announcer: Welcome to our fireside chat with Seniors Living Healthy, the podcast that helps prepare and educate you as you enter and live out your golden years. With over 10 years of experience, Nick and Zach are experts in the senior market and are here to help you live a healthy, full life. And now fireside with your hosts, Nick Keene and Zach Haire.
 
Zach: Hello, and welcome to episode three of our inaugural season of Seniors Living Healthy. I’m your host Zach, and here with me, as always, is Nick.
 
Nick: Hey, folks.
 
Zach: So, this month’s episode, we’re going to talk about Part D of Medicare, which is your prescription coverage. Nick, what is our number one complaint?
 

Nick: Prescription drug plans, no doubt, Zach. For whatever reason, these drug plans are regulated by the government and Medicare, and there’s only certain election periods throughout the year that people can make changes or elect different coverage, so we get complaints about these plans non-stop throughout the year.

Zach: That’s right. With our hands being so tied, it’s really, really hard. We can’t tell the future. So, we can’t see what people are going to be doing, taking prescription-wise down the road; really, all we can do is what’s working for them there in October when those annual enrollment period comes. So, I know we’ve touched there briefly on enrollment period but, Nick, what are the two most common times people can enroll in drug coverage?

Nick: So, the two most common times people can make changes to their prescription drug coverage is going to be their initial enrollment period when they first become eligible for Medicare, which is a three-month window both before and after their eligibility, and then also the annual enrollment period, which is that period from October 15th, through December 7th each year, that they’re allowed to make changes to that coverage.

Zach: Great. Yep, definitely. Yeah, those are our two most common times. There are a couple of different scenarios out there. If you guys want to subscribe to our newsletter, that’s something we’ll, kind of, touch in that, here in the next couple days we’ll be getting out to you guys, to see the different options you may have out there enrollment-wise. So, Nick, when we were working with people looking at things, what should our clients keep in mind when we’re working with them to select a drug plan? Because like I said, we can’t tell the future?

Nick: Sure, absolutely. So, Zach, what we try to do is find the best drug plan and drug coverage for our clients at the time. Not only that, but we want to make sure people newly eligible to Medicare know about the downfalls of not selecting drug coverage, whether that’s being penalized for not having credible coverage through Medicare prescription drug coverage, group insurance, or retirement benefits, whether that is someone who is not taking prescriptions and just thinks they don’t need it, we want to make sure they’re not getting penalized. We also want to make sure that folks have the best drug coverage for them. So, it’s our job to ask questions to make sure that we’re informed, that we take care of our clients.

Zach: Definitely, yeah. Trying to put the client there first is always want to make sure we get what works best for them. So, moving forward there, looking at the different parts of the prescription plan, the first thing we want to cover there are the tiers. Prescriptions are broken down into various tiers, that kind of breaks them down into cost, types of prescription, things like that. Nick, you want to touch on those real quick, what the different tiers are, and what that means.

Nick: Yeah, absolutely. So, Zach, the way the tier system works, and by the way, Medicare is who is dictating what prescriptions are in what different types of tiers based on their cost. So, your Tier 1 drugs are typically going to be the most inexpensive in most cases. Lots of drug plans offer these drugs free of cost. Tier 2 are going to be preferred generics in a lot of cases or non-preferred generics that are a little more expensive but still relatively inexpensive; Tier 3 are going to be your brand name drugs, and Tier 4 are going to be your specialty drugs, like cancer drugs, things of that nature. So, it’s important to keep in mind that these drugs are placed in their tiers based on the cost of the overall prescription.

Zach: Definitely, yep. So, now we’ve broken down the various tiers that prescriptions are in. We hear a lot about different phases—periods—when we’re going through a drug plan. Kind of touch on those, that way people have an idea of where they’re at moving down the line.

Nick: Absolutely. So, the way drug plans are created, folks, is Medicare mandates that there has to be a minimalistic benefit to all prescription drug plans that companies offer, and they also mandate that all of the plans have four different stages throughout the plan. And that’s going to be the deductible phase, the initial phase, the coverage gap phase, and the catastrophic phase. So, realistically, there’s four different plans and they all have different thresholds, involves moving down the cycle.

Zach: Gotcha. Yep, definitely. So, look in there, that first one there being the initial deductible phase, kind of, briefly touch on it, then how they move into the next phase, which would be your initial coverage.

Nick: Sure. So, some drug plans have a deductible and some don’t, Zack. So, the maximum deductible that’s allowed for the year 2020 is $435. So, no drug plans can have a deductible higher than that for the year 2020. However, some drug plans alternatively, have zero copay at a additional premium a lot of times. 

So, the way that works is very similar to car insurance. The analogy we use: if you get in a wreck, and it’s your fault, you pay your deductible before the insurance company pays. Same way here. You’re going to pay the full cost of your prescriptions until you get through the deductible phase of your prescription drug plan. A caveat, too, to mention is some drug plans offer Tier 1 and Tier 2 drugs free of cost.

Zach: Gotcha, gotcha. So, that gets that deductible phase. And, like you said, moving into the initial coverage phase, hitting that $4,020 limit there on the coverage.

Nick: Yeah, and one thing to mention a lot of people see this number and their eyes pop. They think they’re going to be responsible for over four grand out of their pocket before they get through the second stage of their drug plan. It’s important to remember that this cost consists of the cost you pay and the cost the drug plan pays as well.

Zach: Yeah, yeah. You’re not paying $4,000 out of your pocket. So, then, looking there, the third stage is probably the most popular stage. Everyone hears a lot about—people complain a lot about it because you pay more for your prescriptions, but you’re looking at that doughnut hole, or the coverage gap.

Nick: Yeah, so the technical term for this is the coverage gap. But what the—everybody refers to this as the doughnut hole, you’re correct. And the reason the doughnut hole can be such a bear is for people that have higher, more expensive medications, their cost-sharing within this period goes up pretty substantially. So, basically, the way it works, when they get in this period, for prescriptions, they’ve been paying X amount; in some instances, that price can double, until them, the manufacturer of their drugs, and the prescription drug plan provider has a maximum out-of-pocket cost of around 6350 bucks. 

And it’s important to mention also, I think people should know, in a lot of cases, most people don’t get this far in the drug plan gaps. But for people—we see a lot on insulin. We see people a lot on other specialty drugs, whether it’s cancer drugs, Parkinson’s drugs, things like that—individuals are hitting these gaps. So, it’s good for them to know why it’s happening, why their drug costs are increasing.

Zach: Yep, definitely, definitely. And so then coming to the close there with the four different phases, there is that light at the end of the tunnel there at the catastrophic coverage phase.

Nick: Well, yeah. There’s some good in the bad with this phase. If you make it this far down the drug plan cycle, it means you spend quite a bit of money out of your pocket throughout the year. But also, when you make it to this point, this is the lowest your costs are throughout the whole plan. You’re responsible for no more than 5% of the total cost of your drugs when you make it this far. 

And one thing to mention Zach, I think just to wrap this section up, prescription drug plans run January 1st through December 31st. So, if you elect a plan later in the year, your plan will restart January 1st, whether it originally started in December or January of the previous year. So, these limits all reset starting January 1st of each year.

Zach: Definitely. So, we put everything in for you guys at start the annual enrollment period, it does show us what the average cost is going to be based off your current prescriptions and pharmacy, as well as when you’re roughly going to hit each phase. So, we’re going to be able to tell you when to expect to hit that doughnut hole, or if you’re going to hit it at all, or when you hit that catastrophic phase moving forward there. As we come to close there in our first part there, the ABC of Medicare with the prescription coverage, just keep in mind they are a pretty finicky thing out there. We do the best we can, but like I said, not be able to tell the future, we can usually work with what we have in that time period.

Nick: Absolutely, absolutely. And it’s important that people realize, when you run a prescription drug plan proposal, it’s based on the prescriptions that you’re taking at the current time. We obviously can’t read the future. We do the best for people with their current list. Sometimes throughout the year, there are changes, and hence this is by far the biggest product that we get complaints about across the board, Zack.

Zach: All right guys, and welcome back to our next session here, our interview portion of episode three on PDP, prescription drug plans, and we are happy and lucky to be joined on the phone by Tausha Mitcham, National Sales Director for Aetna working on their MA-PD, PDP side of things. And so, Tausha, thanks for jumping on the phone here with us. I know where you’re at, it’s pretty early in the morning.

Tausha: Oh, it certainly is. Yeah. Thanks for having me. I appreciate it. [laughs].

Zach: No problem. No problem. Thanks for joining us here. So, as I said, Nick and I’ve got a few questions here about you in regards to the PDP prescription drug plans there. Kind of help some people out there out that are listening to our podcast.

Tausha: Okay, sounds good.

Nick: All right, Tausha, we’ll jump right in. So, first question that I would have for you is if a drug plan beneficiary is taking, or prescribed a drug that isn’t on their plans formulary, what can they do to try to get the plan to cover that?

Tausha: Sure. So, it’s pretty simple. What they’d want to do is they want to go to their doctor and request a special exception. That’s really the key. Always work through your physician as it relates to any special process and exceptions.

Zach: Very good. So, a lot of people in our market, they like to travel; we call them snowbirds, you know, they’ll live up north, go down south when it cools off, to try to stay there. So, what is a—as a beneficiary, they’re out of their service area, if they’re wanting to look for continuous amounts of time, what’s the best way to go about that with the networks and things like that?

Tausha: Oh, absolutely. So, really, the key to that is using a national drug chain. So, it’s going to be a drug chain that you would have in any state. So, generally, those are going to be CVS, Walmart, drug chains like that. And, of course, you want them to be in-network.

Zach: Yeah, we always try to make sure when we’re running PDPs for our clients, you know, making sure—a lot of them like those little local drugstores; we try to get them to at least check the big chains out there in case they do travel.

Tausha: Absolutely.

Nick: Very good. So, Tausha, what types of quantity limit programs can insurance companies use to limit the amount of particular prescriptions a client can get at a time?

Tausha: So, quantity limits [unintelligible] from your insurance carrier and that would mean your doctor must be involved. So, try this before you go to any brand name drug.

Nick: Okay. Very good.

Zach: So, what are some of the benefits for a Medicare beneficiary taking a prescription drug plan even if they don’t take any prescriptions? And we do talk to some people out there that don’t take anything; what’s the best route for them? What would you recommend?

Tausha: Sure. So, essentially what that does for them, it keeps them from having to pay a late penalty for enrollment. So, I mean, ideally, if they had a plan that protected them from it, that would be one thing, but if that’s not the case, and they just don’t think that they needed the prescription, by actually picking up a PDP plan, it will keep them from having to pay the late penalty, the enrollment penalty. And I could tell you what that is if you’d like me to.

Zach: Sure.

Tausha: Okay. It’s 1% of the current national base beneficiary premium, multiplied by the number of uncovered months. So, let’s say you decide 24 months down the road, you’re looking at this 1% of the current national base. Again, the beneficiary premium multiplied by the number of uncovered months, and then that’s rounded to the nearest 10 cents. So, for 2020, the national base premium is 32.74.

Nick: Very good. Thank you.

Tausha: Sure.

Nick: And, next one I have for you here, Tausha—and you kind of alluded to this a little bit earlier, but I just want to put a spotlight on this—when it comes to a client choosing a pharmacy to fill their prescriptions through a particular PDP provider, what is the benefit of choosing a particular pharmacy as it relates to cost or maybe access?

Tausha: Sure. So, again, key, key, key is always to choose a preferred pharmacy for lower drug costs. That’s always the key.

Nick: Right. Very good.

Zach: So, as we’re getting close to wrapping it up here, we’ve hit the high notes on prescription coverage and everything out there. Is there’s any other information you would like to share with our audience about prescription drug plans?

Tausha: Well, I will tell you, as it relates to Aetna and CVS, we are super excited about a new plan we are coming out with for 2021 that’s called the Smart RX plan. And nationally, the plan is $8 and under. So, obviously, it varies based upon state, but none of the plans will be over $8 a month.

Zach: Wow.

Tausha: So, we’re extremely excited about that. And again, that’s a national network, and we talked about going to those chains. Obviously CVS would be an in-network provider for that.

Nick: Right. Well, last one, Tausha. Give us a little bit of information about Aetna. Any exciting, other changes coming for 2021? Floor is yours.

Tausha: Okay, great. Well, thanks for the opportunity. So, a few things just to know for 2021; you’ve heard about our Health Hubs. Generally, you’re going to see those in CVS pharmacies. In some cases, you’ll have a Health Hub that’s located inside of a Target because there is a CVS within that target. 

But our plan is to actually have 1500 of our Health Hubs nationwide by the end of 2021. And what that really does is it helps with additional care for in between a member’s doctors appointments, that’s really where that’s going to be beneficial for your clients. Also, CVS is now allowing patrons to use PayPal, which I think is pretty cool. And then possibly in the future, they might be able to use Venmo as well. We’ve expanded into 158 counties, with one new state, 288 D-SNP expansion counties with nine new states. 

We’ve done an HMO production expansion nationally. And then we have a new veteran’s plan is called the Eagle Plan, and 88% of our members are in [four plus star plans]. Aetna CVS is all about caring for the whole member, and really our focus through that is through a Medicare Advantage Plan—which could be an HMO or PPO; SilverScript Part D, which is what we’ve been talking about—our pharmacy plans; D-SNP special needs plans; Medicare supplements; and ancillary products, which with you would be like a hospital indemnity, cancer and heart attack, home health care, and more. And then lastly, I just really wanted to just highlight the support that CVS Aetna has given around COVID-19. We waived all COVID related copayments, and I think what’s probably stands out the most for me is that we opened multiple COVID-19 testing sites throughout the United States where we kind of had those hotspots. And CVS acted quickly and implemented those hotspots to help with testing. So, thanks for the opportunity to talk about our highlights for 2021.

Nick: Super cool, Tausha. Super cool. Sounds like Aetna CVS has a lot of exciting things coming for the coming year.

Tausha: Absolutely. We’re very excited.

Zach: All right, Tausha. Well, thanks again for getting on here with us and answering these questions. Like I said, we know it’s a little early out there for you, again, so we want to thank Tausha with Aetna for joining us and answering some questions for us.

Nick: Thanks, Tausha.

Tausha: Right. Thank you.

Zach: All right, so for this episode’s product review, we’re going to be looking at drug plans. So, there’s not a lot out there when it comes to drug coverage outside of these government-ran prescription plans in the Medicare market. So, Nick and I are going to walk through looking at what all we look at when we’re talking to clients to find the best plan for them, and also what they need to have with him to make our jobs easier. So, Nick, starting off, what’s the process for getting people signed up?

Nick: That’s a great question, Zach. Really, the process on our end is, first, an individual has to have a qualifying election period to enroll. We touched on that a little bit earlier: whether that’s their initial enrollment period to Medicare; whether that’s the annual enrollment period, October 15, through December 7; or you mentioned slightly earlier about other areas that people might be able to enroll, special election periods. They have to have a valid election period first. And then once they have a valid election period, really our job is to ask the right questions, to collect the right information, whether that’s the prescriptions they’re taking, the dosages that they take, frequencies they take them, how they fill their pharmacies, whether it’s mail order, whether it’s brick and mortar at a retail pharmacy, all of those things, Zach, go into helping us find the person the right prescription drug plan.

Zach: Yep, definitely. Yeah, we want to make sure we’re getting the right one out there for them. So, you know, we sit them down, here’s the table, got our client across from us. What does our client need to make sure they bring in with them to make our job easier and find the best plan for them?

Nick: Well, the medical industry has been recommending that the senior market carry a list of their prescriptions that they’re currently on in the event of an emergency for some time now. So, that, of course, is the first thing that we would ask a client to bring in. More importantly, to apply for prescription drug coverage, they associate your Medicare card information with prescription drug plans. So, a Medicare card would certainly be something else that an individual would want to bring in. And then, ultimately, it’s our job to once again, ask the questions, get them in the right plan, and make sure we get them covered.

Zach: Yep, definitely. So, you know, they’re sitting here in front of us, we got all their paperwork out, we’ve put the prescriptions in, we’ve put their pharmacy in they go to for getting the right network and everything. The last little part here, kind of touch on what all we’re looking for when selecting the plan because, like I said, our goal is we want the best plan. We know going in that number one complaint in Medicare is these prescription plans, so we want to do everything on our end to cut those down short of, you know, not being able to tell the future, and know if you’re going to get something prescribed different down the road, but what we have in front of us to work with. What are we looking for to get them the best coverage?

Nick: Yeah. And before I answer that, Zach, I just want to go back and touch on one thing. You know, with these prescription drug plans, all companies have different plans that they promote in different areas. So, when we’re asking individuals all these questions about the particular prescriptions they take, the frequencies they take them, and the dosages they take with them, the reason for that is we want to make sure that we find the right plan for them. So, we get the question all the time—you’ve been asked this 1000 times, as well, “Why this plan?” 

So, getting back to the question that you asked, really the three things that we’re looking at, initially we’re looking at the deductible: does this plan have a deductible? The premium: what’s the cost of this plan? And then ultimately, what’s it going to cost an individual to fill their prescriptions each month, when they go to these facilities? And there’s multiple factors that go into those monthly costs. All these drug plans partner with different networks of pharmacies, so we want to make sure not only are we getting their prescriptions, their dosages, their frequencies, we want to know where they’re filling them. 

We also want to know if we can find a cheaper option to send them to fill their prescriptions. Are they willing to do so? So, with all of that information, what it gives us the ability to do, Zack, is we can plug this in, we can find them not only the cheapest drug plan from a month-to-month premium costs, but overall we can find them a plan that has the cheapest costs throughout the year filling their prescriptions. So, for some people, they may take very basic medications, they can get a $13 a month drug plan that covers Tier 1 and Tier 2 on zero copays, or they may have higher cost drug plans that are $57, $65 bucks a month, but it eliminates the deductible phase for that client so they have level costs throughout the year. So, ultimately, it allows us to find the right drug plan for our clients with their particular mix of medications that they’re currently taking.

Zach: Definitely, yep.

Nick: One thing to point out as we bring this to a close is the reason we get lots of complaints about this, Zach, is because, throughout the year, individuals have changes in their medication. And each drug plan covers different medications under their formulary. So, unfortunately, when we run a proposal for our client, we’re running it based on their current list of prescription drugs, whereas if those drugs change throughout the year, that may change their proposal. So, unfortunately, our hands are tied in that regard. Medicare is who dictates when people can make changes throughout the year. If you have any questions, reach out to us, we’ll do everything we can to help out.

Zach: All right, so for this episode’s Medicare Confessions—as you guys know, Nick and I like to share a few real-life stories so you guys can kind of see how what we’re covering is working in the real world, know that we’re not up here just making things up as we go; what we’re doing is actually helping and impacting people out there.

This episode, Nick and I both have some examples we want to share. First one I want to share is we’re going to call her Miss Sally just for protection of her name, and where she’s at, and all of that. So, Miss Sally was in her 70s and still working. So, she was on her group coverage, everything with work; only had her Part A of Medicare. She was diagnosed with a catastrophic illness. 

All of a sudden, she’s having to pay hundreds of dollars for prescriptions, thousands of dollars for treatment, things such as that. She gets put in contact with me. I talked to her, we walk through, she decides it’s going to be better for her to go onto Medicare and get a prescription plan. And by doing this, she saves hundreds of dollars on prescriptions, thousands of dollars on treatment because this takes care of her deductibles and her copays. Because, as we’ve talked about in the prescription plans, the various different thresholds and phases, she goes through, got through them, unfortunately, pretty quickly, but was able to hit that catastrophic phase, and save a very good chunk of money. 

That’s just one way that we were able to help people, we were able to find what worked best for her in a very unfortunate circumstance. But was able to help her not lose any coverage and not lose any prescription that she was having to take but get them at a much cheaper price.

Nick: Absolutely, Zach, we see that all the time. I’ve got several scenarios that I can share here, from individuals going from group insurance to Medicare; Medicare prescription drug plan to Medicare prescription drug plan. So, the first instance, I had an individual similar to you, that was working, still working beyond 65, 68 years old, and she got diagnosed with cancer, which put her on some pretty expensive Tier 4 and Tier 5 medications. On her drug plan that she had through her retirement, she did not have access to local pharmacies. 

They weren’t in-network, so she was filling her prescriptions on standard or non-network pharmacy bids. So, we were able not only to get her over onto Medicare and a supplement to pay her health insurance bills but by getting her on a Medicare prescription drug plan, we were able to link her up with a preferred provider pharmacy, we were also able to cut her drug costs almost in half overnight, so that was wonderful.

And then another client I had was going from Medicare to Medicare. They had a Medicare supplement plan and an individual prescription drug plan, but they were filling scripts once again at not-network pharmacies. So, by linking her up—in this case, we were able to keep her on her same prescription drug plan but sent her to the right pharmacy, also saving her quite a bit of money. So, the thing to keep in mind is that not only can we save people money, a lot of times with prescription drug plans, but if you’re going to the right pharmacies—or mail order, in some instances—pharmacy’s costs differ from place to place. So, it’s nice to make sure that where you should be filling your prescriptions to get them at the best cost.

Zach: We want to thank everyone for listening, and a big thank you to Tausha with Aetna for jumping on here with us and answer some questions on prescription drug coverage for us. You know, again, as we’re getting close to the annual enrollment period, great time to be looking into your prescription coverage, reviewing your options, as everyone’s prescriptions, they change throughout the year. So, the only time you can change those are during this annual enrollment period. So, got any questions about your prescription coverage, looking at different pharmacies, Nick or I would love to review the options, everything out there for you. Make sure you’re getting the best drug plan for your prescriptions at the pharmacy you’re going to. Just remember, you can email us at zach@getsbi.com or give us a call, 844-437-4253. Remember, guys, annual enrollment period shows up, that’s the best time—and only time—to review your drug plan options. So, until next time, guys, have a good day and God bless.

Nick: Take care.

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