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medicare RX

Medicare Part D

Medicare, the federal government’s health insurance program primarily for people age 65 or older, launched its prescription drug benefit in January 2006.

Known as Medicare Part D, this benefit was created as part of the Medicare Modernization Act of 2003. Rather than providing this coverage directly, Medicare has contracts with private insurers and employer health plans. Most plans are sponsored by private companies such as insurance companies or pharmacy benefit managers. These commercial prescription drug plans (PDPs) must be available to all people eligible for Medicare who live within one of 34 regions across the country.

NRECA’s Medicare Part D Prescription Drug Plans are employer prescription drug plans (Employer PDPs). NRECA is one of the few employer health plans approved by Medicare to provide its own Part D benefit plans, giving you choices for affordable and accessible Part D prescription drug coverage.

NRECA’s Part D Plans are available across the country to all Medicare-eligible retired and disabled employees and retired and disabled directors of participating NRECA member co-ops, as well as their Medicare-eligible spouses, surviving spouses and dependent children.

Click the titles below to learn more about Medicare Part D.

  • The Basics

    How Medicare’s Standard Part D Plan Works

    Most commercial plans offer a plan based on the Medicare's standard plan.You pay a premium each monthto be covered bya Medicare prescription drug plan, plus costs for coveredprescription drugs.

    Each year when using your benefit, you pay a share of the cost: You pay Plan pays
    1. You pay the first $310 of the cost of covered drugs-- this is your annual deductible. $310 $0
    2. You pay 25% of the cost -- your coinsurance -- for the next $2,540 in covered drugs. $635 $1,905
    At this point, you reach the initial coverage limit of $2,850. You now move into the coverage gap. Subtotal
    3. While you are in the coverage gap, you pay a share of the cost until you reach $4,550, the maximum in true out-of-pocket costs or TrOOP.

    For brand-name drugs, you pay 47.5% of the cost of covered drugs and you receive manufacturer discounts for50% of the cost. The plan pays 2.5% of the cost.

    For generic drugs, you pay 72% of the cost of covered drugs and the Plan pays 28% of the cost.
    Brand-name: You pay 47.5% and get 50% discount Generic: 72% Brand-name: 2.5%

    Generic: 28%
    At this point, the amount you paid and the manufacturer discounts you received equal the maximum in true out-of-pocket (TrOOP) costs. You are now eligible for catastrophic coverage. Total
    4. You pay the greater of 5% of the cost of covered drugs or a minimum copayment of $2.55 for generic drugs or $6.35 for brand- name or specialty drugs. This is your catastrophic coverage. 5%
    No limit
    No limit


    The plan year for Medicare Part D is January-December. Every January, the plan benefits, premiums, coinsurance or copayment, formulary and/or pharmacy network may change.

    Open Enrollment is held October 15-December 7 every year. This is the time of year when you can

    • review the changes to your plan for the next year
    • check the formulary for your current plan to see if your prescription drugs are still covered
    • change plans if you choose.

    If you're already enrolled in a Part D Plan

    If you already are enrolled in a Medicare Part D Plan and you decideto staywithyour current plan, you don't have to re-enroll. However, you should check the formulary (list of drugs) for your current plan to see if your prescription drugs are still covered for the next year.

    If your prescription drugs are no longer covered on your formulary, you may

    • ask for a formulary exception for the prescription drugs you currently are taking
    • talk to your doctor about other medications that are listed on the formulary.

    When your plan is effective and when you can change it

    If you enroll in or change your Part D Plan during open enrollment, your coverage in the new plan becomes effective on January 1 of the next year.

    After December 7, you will not be able to change your plan until the next open enrollment period, unless you qualify for a special enrollment period.

  • Your Share of the Cost

    These are the types of costs you may pay with Part D plans:

    Premium: the monthly charge you may pay to participate in the plan and be covered for a prescription drug benefit. This amount may change each year.

    Deductible: the amount you pay each year before your plan pays any part of the cost for your prescriptions. Medicare may change this amount each year.

    Coinsurance: the percentage of the cost you pay for your covered drugs.

    Copayment: a flat dollar amount you pay for your covered drugs.

    Coverage Gap: the period when you pay most of the cost for covered drugs.

    True Out-Of-Pocket Costs (TrOOP): the amount you pay for your share of the cost of covered drugs before you are eligible for catastrophic coverage. Includes deductible, coinsurance or copayments and your share of the cost plus any manufacturer discounts during the coverage gap. Your monthly premiums are not included in your true out-of-pocket costs. Medicare may change this amount each year.

    Catastrophic Coverage: your coverage after you pay the maximum in true out-of-pocket costs for the year. The Part D Plan pays most or all of the cost of your covered drugs for the rest of the calendar year.

  • Use a Network Pharmacy To Be Covered

    Part D Plans must provide a network of retail pharmacies in your area that accept the plan. You must use a network pharmacy to be covered for benefits, except in an emergency or non-routine circumstance.

    The NRECA Part D Plan has a national network of retail pharmacies, as well as its special rural pharmacy network. This way, you can find a pharmacy wherever you are in the United States or its territories.

    Wherever you fill your prescription, there may be a limit on how much of your drug you can receive at one time, or your drug may require prior authorization or step therapy. See the introduction to NRECA’s List of Covered Drugs (Formulary) for more information.

    If You Use an Out-of-Network Pharmacy

    There are emergency or non-routine circumstances for which you may be covered for benefits when you have a covered drug filled at an out-of-network pharmacy, such as home infusion therapy, long-term care facility pharmacies and retail pharmacies that are not in the plan’s network.

    Before you fill your prescription at an out-of-network pharmacy, call Customer Care to see if there is a network pharmacy in the area where you can fill your prescription.

    These emergency or non-routine circumstances include:

    • when you are traveling outside of your plan’s service area
    • if you lose or run out of your covered drugs or you become ill and need a covered drug immediately and cannot access a network pharmacy
    • if you cannot obtain a covered drug within your service area in a timely manner due to lack of availability of a participating network pharmacy
    • if your covered drug is provided by an out-of-network institution-based pharmacy while you are in an emergency department, provider-based clinic, outpatient surgery, or other outpatient setting
    • if you are administered a vaccine covered by your plan in a physician’s office
    • if you must fill a prescription for a covered drug and the drug is not regularly stocked at an accessible network retail or mail-order pharmacy.

    Submit a paper claim for an out-of-network prescription

    If you go to an out-of-network pharmacy for any of the reasons listed above, you will need to pay the full cost for your prescription and submit the claim yourself. Your pharmacy will not send the claim in this case.

    You will need to submit a claim

    • to be reimbursed for your out-of-pocket costs that would normally be covered
    • so the plan has a record of your purchase and applies it to your annual deductible or true out-of-pocket cost (TrOOP). This helps you qualify for catastrophic coverage faster.

    You must mail the completed paper claim form along with the pharmacy receipt that lists the name of your covered prescription drug (not the sales receipt) to:

    NRECA's Part D Plan
    c/o CVS Caremark Pharmacy Service
    Paper Claims Department
    P.O. Box 52193
    Scottsdale, AZ 85072-2193

    We will review the claim form and make an initial coverage determination. Your claim will be processed according to your benefit coverage, and you will be notified of the outcome. For more information about initial coverage determinations, limits and financial responsibilities, refer to your Summary Plan Description and Evidence of Coverage or call Customer Care.

  • Creditable Coverage and Late Enrollment Penalty

    You decide whether to enroll in a Part D Plan.

    There is a cost to you -- the monthly premium -- that you must pay if you decide to enroll in a Part D Plan. This premium provides you access to benefits if or when you need prescription drugs covered by your plan.

    You pay a penalty if you wait to enroll

    Let’s say you’re eligible for Medicare but decide you don’t really need prescription drug coverage right now. You’re healthy and don’t want to spend the money on premiums.

    You may want to reconsider. If you wait to enroll, Medicare may charge you a late enrollment penalty if you are eligible for Medicare and are not covered by a plan providing creditable prescription drug coverage.

    This penalty is equal to 1 percent of the national average premium for each month you are

    • eligible for Medicare
    • not covered by a creditable prescription drug plan, such as an employer plan, Veterans Administration (VA) or TRICARE
    • not enrolled in a Part D plan after May 15, 2006.

    You may pay this penalty for the rest of your life or as long as you are covered by a Part D Plan. As the national average premium changes from year to year, the dollar amount of your penalty also changes.

    Avoid late enrollment penalty with creditable coverage

    To avoid the late enrollment penalty, people eligible for Medicare must have creditable prescription drug coverage.

    This means your coverage must be provided through a plan that expects to pay as much or more than Medicare’s standard prescription drug plan, such as

    • a Medicare prescription drug plan
    • an employer plan
    • another source, such as the Veterans Administration (VA) or TRICARE

    If you are eligible for Medicare and still working, you may be covered by your employer's plan.

    Since January 1, 2006, all participants eligible for Medicare Part D -- retired or disabled employees, retired or disabled directors and their Medicare-eligible spouses, surviving spouses or dependent children -- are no longer covered by their co-op’s NRECA prescription drug coverage for active employees.

    In order to avoid a late enrollment penalty, you must enroll in a Part D Plan -- from NRECA or another provider -- when you become eligible for Medicare. The period in which you may enroll without a penalty varies depending on why you are enrolling in a Part D Plan.

    If you do not sign up for a Part D Plan when you are first eligible for Medicare prescription drug coverage, you may enroll during the open enrollment period each year. However, unless you had creditable prescription drug coverage, you may pay a penalty for the period of time that you were not covered.

    NRECA checks for gaps in coverage when you enroll

    When you enroll in a Part D Plan, your plan is required to tell Medicare if there was a period of time when you did not have creditable coverage. Medicare calculates your late enrollment penalty and tells your Part D Plan the amount to add to your monthly premium.

    Your Part D Plan may send you a form asking you if you had creditable prescription drug coverage in the past and the dates you were covered.

  • If You Have Limited Income or High Income

    If you have limited income, you may qualify for a Medicare program called Extra Help.

    Depending on your income, Medicare could pay some or all of your costs, including

    • monthly premiums
    • deductible
    • coinsurance or copayments

    In addition, you would not have to pay a late enrollment penalty and you pay only your coinsurance or copayment during the coverage gap, if your plan has that feature.

    To find out if you qualify for Extra Help, contact

    • 1.800.MEDICARE or 1.800.633.4227, available 24 hours a day, 7 days a week. TTY users should call 1.877.486.2048
    • your local Social Security office or call 1.800.772.1213, from 7 a.m. to 7 p.m., Monday through Friday. TTY users should call 1.800.325.0778
    • your state Medicaid office
    Your level of Extra Help Basic Plan Basic Plus Plan Copayment Plan Enhanced Plan Enhanced Plus Plan
    100% $0.00 $5.65 $51.45 $115.35 $188.30
    75% $0.00 $13.75 $59.55 $123.45 $196.40
    50% $7.45 $21.85 $67.65 $131.55 $204.50
    25% $15.55 $29.95 $75.75 $139.65 $212.60
    No Extra Help $23.65 $38.05 $83.85 $147.75 $220.70

    If You Qualify for Extra Help and Are Not Paying The Correct Copayment

    Please contact us if you

    • have qualified for Extra Help, and
    • are not paying the right copayment amount when you get your prescriptions filled at a pharmacy.

    We will help you to

    • request help in getting the necessary proof of the correct copayment you should be paying, or
    • provide us with proof, if you already have it.

    You can send any of the following documents -- also known as best available evidence -- to the NRECA Plan. They also can be submitted by your pharmacist, advocate, representative, family member or other individual acting on your behalf:

    • a copy of your Medicaid card that includes your name
    • a copy of a state document that confirms active Medicaid status
    • a print out from the State electronic enrollment file showing Medicaid status
    • a screen print from the State’s Medicaid systems showing Medicaid status
    • other documentation provided by the State showing Medicaid status
    • a copy of the Social Security Administration award letter
    • a remittance from the facility showing your Medicaid payment for a full calendar month
    • a copy of a state document that confirms Medicaid payment on your behalf to the facility for a full calendar month
    • a screen print from the State’s Medicaid systems showing your institutional status based on at least a full calendar month stay for Medicaid payment purposes.

    When we receive the proof from Medicare showing your copayment level, we

    • make sure that you can pay the correct copayment when you get your next prescription at the pharmacy
    • reimburse you if you paid a higher copayment.

    We then make the payment to

    • the pharmacy if it hasn’t collected a copayment from you and/or is carrying your copayment as a debt you owe
    • a state if the state paid on your behalf.

    If you have any questions, please contact Customer Care.

    Pay an Adjusted Premium If You Have High Income

    If your income is above a certain level, you will have to pay the income-related monthly adjustment amount.

    To determine if you have to pay this additional premium, Medicare looks at your modified adjusted gross income from 2 years ago that was reported on your IRS tax return. Modified adjusted gross income (MAGI) is your adjusted gross income plus tax-exempt interest income.

    You will be charged the income-related monthly adjustment amount in 2014 if your modified adjusted gross income on your tax return filed in 2013 for the 2012 tax year was

    • more than $85,000 and you are single
    • more than $85,000 and you are married, but file separately
    • more than $170,000 and you are married filing jointly with your spouse.

    You will get a letter from Social Security letting you know if you have to pay this extra amount. Each month, the amount will be deducted automatically from your Social Security or Railroad Retirement Board check or Medicare will send you a bill. Do not pay this extra amount to the NRECA Part D Plan.

  • More Information About Medicare

    For information about Medicare or Medicare Part D

    • go to www.medicare.gov
    • call 1.800.MEDICARE or 1.800.633.4227, available 24 hours a day, 7 days a week. TTY users should call 1.877.486.2048
    • call the Social Security office at 1.800.772.1213, Monday through Friday, from 7 a.m. to 7 p.m. if you have questions about Extra Help. TTY users should call 1.800.325.0778
    • go to our contact page
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NRECA is a Medicare-approved Part D Plan sponsor.
This site last updated 9/2014  |  E2332

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