Are you shopping for new health insurance coverage? With all the different plans available, as well as the options that come with each, it's easy to become overwhelmed, especially if you need a plan that covers prescription drugs.
If you're considering Medicare plans as a cheaper alternative to private health insurance plans, you have likely asked the question: "Do Medicare Advantage Plans cover prescription drugs?"
The short answer is yes, most of them do. Here's what you need to know.
What is Medicare Advantage?
As an all-inclusive health or "bundled" insurance plan, Medicare Advantage offers U.S. Citizens (or those eligible individuals lawfully present in the United States) a convenient alternative to Original Medicare. Medicare Advantage minimizes the medical bills that aren't included in Original Medicare, which covers 80% of eligible medical costs.
At the moment, Medicare-approved private insurance companies offer over 4,800 different Medicare Advantage Plans.
Essentially, Medicare Advantage plans replace the various "Parts" available with Original Medicare: Part A (hospital insurance) and Part B (medical insurance), and most of the time these plans include Part D (prescription drug insurance). Medicare Advantage plans often cost less than private health insurance plans as well.
It's also important to note that Medicare Advantage Plans that do offer prescription drug coverage may come with a coverage limit. This could be a disadvantage to members with chronic health conditions who require regular medication.
Do Medicare Advantage Plans Cover Prescription Drugs?
Depending on the type of plan offered in your area, it may.
Types of Medicare Advantage Plans
There is a wide variety of Medicare Advantage Plans available today; however, eligibility varies by state. Let's take a look at some of the plans you can choose from.
Medicare Advantage Plans may operate as Health Maintenance Organizations (HMOs). With these plans, members are required to choose their doctors and hospitals from within a specified network of medical service providers. This means you're somewhat restricted in your chosen medical professionals.
Most HMO Medical Advantage Plans include prescription drug coverage. However, if you select one that does not, you cannot get drug coverage under a different Medicare Plan such as a Plan D.
With a Preferred Provider Organization (PPO) Medicare Advantage Plan, members have a bit more flexibility with medical service providers than HMO members do. Most of the time, PPO members can choose a medical professional from outside of the specified network, but it may cost more.
While most PPO plans include prescription drug coverage, not all do. Those that don't include coverage do not allow you to get a separate Medicare prescription coverage plan. If prescription drug coverage is a priority, choose a PPO Medicare Advantage Plan that includes it.
A Private Fee for Service Plan (PFFS) is a form of Medicare Advantage Plan offered by private health insurance companies. Some PFFS plans offer drug insurance and require their members to get their prescription coverage through the plan. If, however, your preferred PFFS does not include prescription drug coverage, members can apply for a different Medicare prescription insurance plan.
Medicare Advantage Plans include Special Needs Plans (SNP) for members living with specific diseases, health care needs or who meet certain "limited income" financial conditions.
SNPs offer very specific benefits, service provider options and prescription drug lists to the group of members they serve. An SNP could be a good choice for members living with eligible chronic health conditions and very particular health needs.
Additionally, all SNPs are required to provide Medicare drug coverage.
A Medical Savings Account (MSA) combines a medical insurance plan with a special type of medical savings account to allow members to collect funds to help pay for medical costs. These plans typically come with a high deductible, meaning you'll pay a higher initial out-of-pocket cost for your medical expenses under the plan.
Medicare deposits funds into the savings account to help pay for health care costs not covered under the insurance plan. However, Medicare MSA Plans do not include prescription drug coverage. That said, they do allow members to apply for separate Medicare drug plans.
If members join a Medicare MSA plan after having a Medigap policy with prescription drug coverage, they may still use this coverage to pay for some of their prescription medication.
What Is Medicare Part D?
Medicare Part D is the Medicare plan available to cover prescription drugs. Original Medicare members can choose Medicare Part D in addition to their hospital insurance and medical insurance to help pay for part of their prescriptions drugs. However, Medicare Part D is also available for people enrolled in most (but not all) Medicare Advantage Plans.
Apply for Medicare Part D when you first apply for Original Medicare or as part of your Medicare Advantage Plan application if you currently need prescription medication or even if you anticipate needing it down the road. If you wait to apply, you could face additional costs with a late enrollment penalty.
It's also important to understand that under some Medicare Part D plans, not all brands may be covered. Review the Plan D "formulary" (list of medications and brands covered) for each plan to check for your particular medication, its cost and the coverage amount. Also, review the alternative brand or generic prescription medication availability and coverage.
If you're considering enrolling in a Medicare Advantage Plan and you need (or expect to need) prescription drug coverage, confirm that your plan includes Part D coverage.
As you can see, the answer to the question, "Do Medicare Advantage Plans cover prescription drugs?" isn't a simple one. It depends on the plan, and some of the plans that do cover drugs come with limitations or restrictions that could exclude your particular situation.
If prescription drug coverage is important to you, carefully review the features of each plan, and compare what's available to ensure you choose the best plan for your needs.