Medicare Part D Prescription Plan Vs Canadian Medications

If you are 65 or older, make sure Medicare Open Enrollment is on your calendar, especially for Medicare Part D. 

The open enrollment period for Medicare 2021 begins on October 15, 2020 and ends on December 7, 2020.

What is Medicare Part D?

Medicare is an insurance plan provided by the federal government and overseen by the Centers for Medicare and Medicaid Services (CMS). 

Medicare Part D is a supplemental form of Medicare that specifically covers prescription medication services from 2006.

This prescription plan has a coverage gap, and that gap is commonly referred to as the “donut hole.”

What Is the Donut Hole and How Does It Work?

The Medicare Part D donut hole or coverage gap is the phase of Part D coverage after your initial coverage period. 

You enter the donut hole when your total medication costs—including what you and your plan have paid for your medications—reaches a certain limit. In 2021, that limit will be $4,130. 

While in the coverage gap, you are responsible for 25% of the cost of your medications. In the past, you were responsible for a higher percentage of the cost of your medications. 

Example

We know the math can be a bit confusing if this is your first-time hearing about the donut hole, so here is an example.

Let’s say that Mrs. Smith joins the ABC Prescription Drug Plan. Her coverage begins on January 1, 2021.

Mrs. Smith is 65 years old and she lives in Baltimore, MD. 

  1. Monthly Premium: $28.3

Mrs. Smith used the online Medicare plan finder to find a best plan. She entered the medications she takes and the dosage, and the plan finder ranked 27 Prescription Drug Plans for her. 

She then enrolled to WellCare Classic (PDP) after comparing the details. She will pay out-of-pocket $28.30 for monthly premiums.

  1. Yearly Deductible (2021): $445

Mrs. Smith uses her Medicare Part D drug plan membership card when she buys prescriptions.

She pays first 100% of her medication costs until she reaches the $445 deductible amount before her plan starts to pay its share. In 2020, her deductible was $435. 

Some Medicare drug plans do not have a deductible.

  1. Initial Coverage Phase

Mrs. Smith pays a copayment, and her plan pays its share for each covered medication until their combined amount (plus the deductible) reaches $4130 in 2021 ($4020 in 2020). 

Initial coverge phase

  1. Coverage Gap: $4130~$6550

Once Mrs. Smith and her plan have spent $4,130 for covered medications, she is in the coverage gap, the “donut hole”. 

In 2021, she will pay no more than 25% of the plan’s cost for both her covered brand‑name prescription medications and generic medications. 

What she pays (and the discount paid by the drug company) counts as out‑of-pocket spending and helps her get out of the coverage gap.

  1. Catastrophic Coverage

Once Mrs. Smith has spent $6,550 out‑of‑pocket for the year, her coverage gap ends. 

Now she only pays $9.20 copay or 5% for brand-name medications and $3.70 copay or 5% for generic (whichever costs more) until the end of the year. 

The problem is that very few patients will hit the “catastrophic period” as the wall is higher year after year. 

Is The “Donut Hole” Closed?

As you can see, Mrs. Smith is responsible for 25% of the cost, which is same percentage as initial coverage phase. It seems the donut hole is closing. You may still see a difference in cost between the initial coverage phase and the donut hole.

For example, in the Initial Coverage payment stage, Mrs. Smith’s medication to treat heart failure called Entresto has a $40 copayment. Once she lands in the donut hole, she is responsible for 25%. The full cost of Entresto is $640, she will pay $160.

How Do I Get Out of The Donut Hole?

In all Part D plans, after you have paid $6,550 in 2021 in out-of-pocket costs for covered medications (this amount is just the amount you have paid, not the total medication costs that you and your plan have paid), you leave the donut hole and reach catastrophic coverage. 

The out-of-pocket costs that help you reach catastrophic coverage include:

  • Your deductible
  • What you paid during the initial coverage period
  • Almost the full cost of brand-name medications (including the manufacturer’s discount) purchased during the coverage gap
  • Amounts paid by others, including family members, most charities, and other persons on your behalf
  • Amounts paid by State Pharmaceutical Assistance Programs (SPAPs), AIDS Medication Assistance Programs, and the Indian Health Service

Costs that do not help you reach catastrophic coverage include:

  • Monthly premiums
  • The cost of non-covered medications
  • The cost of covered medications from pharmacies outside your plan’s network
  • The 75% generic discount

The donut hole does end, unless you were to reach the donut hole towards the end of the year. Then, you might not pay enough to get out of it.

Is Canadian Pharmacy Still Beneficial Even If You Have a Medicare Part D Plan?

Yes, Canadian pharmacy online services will work combined with a Medicare Part D plan, especially if some of your medications are not covered under the plan you select.

According to a 2018 report published by the CDC (Centers for Disease Control and Prevention), more than 87% of adults ages 65+ take at least one prescription medication per month, and almost 40% take five or more prescription medications monthly. 

There are lots of big-ticket medications that only offer brand name products whose prices are much lower in Canadian pharmacies.

Many other expensive brand name medications are available as generics at a much lower cost through International pharmacies. 

For years, American seniors have saved more than 50% by ordering their prescription medications from Canada. 

Is It Legal to Buy Medications from Canadian Pharmacies? 

The answer is, technically no, but U.S. officials are allowing it to happen. 

The FDA, however, has a policy explaining that it typically does not object to personal imports of prescription medications that FDA has not approved under certain circumstances. Thus, customs officials allow the companies to mail up to 90-day personal supplies of medications.

Where Can I Get Affordable and Safe medication from Canada?

Before doing business with an online pharmacy, confirm it is licensed in its country of origin and that the country has strong pharmacy regulations.

There is a website that helps you with this. The Canadian International Pharmacy Association (CIPA) runs a site (cipa.com) that allows you to compare medication prices among dozens of pharmacies whose legitimacy it has certified.

For example, Cheapomeds.com is one of the pharmacies that CIPA certified.

Can I use Cheapomeds.com if I am on Medicare?

Just like with other types of insurance, you can still use Cheapomeds.com if you have Medicare Part D. 

Your Medicare co-pay may not be the pharmacy’s lowest price, especially if you have not reached your deductible, are in the donut hole, or are purchasing a medication that is not on your formulary.

It is easy to search for your medication on Cheapomeds.com before going to the pharmacy to see what the savings would be. If you order the expensive medications with affordable price from Cheapomeds.com and buy your generics through Medicare plan, you will stay out of the donut hole.  

By combining your benefits from Medicare Part D with low cost medications from Cheapomeds.com, you are saving up to hundreds of dollars a year in out-of-pocket costs.

References:

  • Medicare.gov
  • Medicareinteractive.org
  • Samshockaday.com

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