Although seniors who are new to plans still have some confusion, it seems that most people understand at least how drug plans work. Advantage and Medicare part D plans are a different story, and unscrupulous agents keep pulling people out of Med Supplements with the promise of over-coverage. Remember, you really get nothing for free. Advantage plans quickly become expensive if you really need to use them.
There is also something called hiatus coverage that you should understand, because once your coverage begins, at zero or $310, when the total cost of prescription drugs reaches $2,700 a calendar year, the major insurance companies actually stop to pay until the total cost of drugs reaches $4,350. Again, these numbers are based on the 2010 plans at the time of this writing, so they are subject to change. My insurance agent informed me that this will be perfectly clear if you think of the coverage gap as a period without coverage, as it is sometimes called.
Every company has levels, every company has certain drugs where Medicare has changed the requirements, and every company is stuck in the infamous donut.
Switching companies out of the donut hole achieves nothing. The donut hole goes wherever you go. However, it starts over every year. So if you came in last year and had to pay a lot for your drugs by the end of the year, you will do so this year too, and you may come in earlier due to rising drug prices. Older people have survived two years of major Medicare changes with Part D drug plans and Advantage plans that have the greatest impact on Medicare beneficiaries.
Medicare Advantage plans, the second broad category of prescription drug plans, cover not only medications but also Medicare-approved medical services. These plans are available through private insurers and include PPO, HMO, and private service fee programs. In the case of Medicare Advantage plans, the Medicare beneficiary has “altered” her traditional Medicare benefits to a Medicare Advantage program. Medicare Advantage plans sometimes offer members who want additional benefits. However, there are often restrictions on doctors and hospitals that can be used for covered medical services.
Leading private insurance companies offer several Part D drug plans to choose from. The difference here from one plan to another is in the amount of the deductible, which can range from any deductible up to $310. Your deductible, of course, is the total amount you must spend on medications before your coverage takes effect. The lower your deductible, the higher the monthly premium you pay. Then, with zero deduction, you will pay the highest monthly premium.