Prescription drugs are expensive. And to many seniors on Medicare, extra financial help beyond your drug plan can make the difference between taking a needed drug or going without.
Wish you could get extra help with your drugs? I am not talking about Medi-Cal, which are benefits for the severely impoverished. I’m talking about a program that helps people who don’t qualify for Medi-Cal but still need the extra help. The program is called Low Income Subsidy.
This subsidy can eliminate the “donut hole,” provide extra help to cover drugs for lower co-pays and pay for part of your drug plan premium. You can own a home and a car and have a higher income than Medi-Cal allows and still get the extra help.
It is estimated that more than 4,000 Nevada County residents qualify for this plan, but many do not know about it. To understand how this will help save you money, you first need to understand how Medicare, drugs and the “donut hole” work together. Medicare itself does not usually provide any help with drugs purchased at a pharmacy. Medicare Drug Plans (Medicare Part D) does provide three levels of benefit: the initial coverage, the “donut hole” and catastrophic coverage.
Initial coverage — When you start a new year and you get a drug, you will pay a co-pay amount for that drug. The insurance company will pay the rest of the cost of that drug to the drug company. If in any year your retail drug costs (what you pay and what the insurance company pays) hits $2,970, then you would move to the “donut hole.”
Donut hole — In the donut hole (also called the coverage gap), the insurance company is not involved anymore. Now the drug companies pay 52.5 percent of your patented drug costs and 21 percent of your generic drug costs. You pay the balance. If the total you personally paid out of pocket in a given year and amount the drug companies paid hits $4,750, then you graduate to catastrophic coverage.
Catastrophic coverage — This is where they cover you back. Under catastrophic coverage you will only pay $2.65 for generic drugs and no more than 5 percent for brand name and specialty drugs.
These levels of drug coverage reset each year. You can expect to get an accounting each month of how much you have paid toward drugs and how much the insurance company paid.
Retail cost of drugs can be costly. And in the donut hole, an expensive drug is still expensive even at half the cost. Added help can be a real godsend to eliminate the donut hole, provide extra help to bring down your co-pays and pay for part of your drug plan premium.
There are three steps to qualify:
1. Income: You can make up to $1,436 per month* for a single person, $1,938 per month for a couple. The limits may go up if there are more dependents in the home.
2. Assets: You can have up to $13,300 if you are single or $26,580 if you are a couple. Assets include: bank accounts, cash, IRA, stocks or bonds. Your home or cars do not count as assets.
3. Join a Medicare Drug coverage plan. Either a Part D (Drug) plan or a Medicare Advantage Plan that includes drug coverage.
I want you to know that no compensation is given to any Medicare professional for helping you apply for this subsidy. I do it as a courtesy for my clients because I know it can be a huge help. And you get an added benefit. Think you may qualify for extra help? If you qualify, you also are granted a special enrollment opportunity to join a Part D drug plan or a Medicare Advantage plan. This can help you even more by eliminating your medical deductibles and give you added benefits beyond Medicare.
Bill Anderson lives in Nevada County and is a licensed agent, certified and authorized to present, provide and bring clarity to Medicare plan choices. He conducts no-cost individual and community meetings throughout Nevada and Placer Counties. He can be reached by email at Bill@MedicareDoneRight.com or by calling 530-432-7988. For a list of local Medicare Community Meetings go to http://MedicareDoneRight.com.