You'll face certain restrictions for Medicare coverage, which vary between the different policy options.
Under Medicare, you will not have coverage for certain services, drugs and treatments, and you may not be able to afford higher deductibles.
To help customers in this situation, independent companies offer Medicare Advantage, Part D and supplement plans, and the restrictions of each vary. Part D drug plans may limit the quantity and dosage of prescriptions they'll cover and require prior authorization for coverage.
Most Medicare Advantage plans limit your choice of providers and doctors to your plan's network, but a few allow you to use an out-of-network doctor at a higher cost. If your doctor decides to leave the plan, you have to choose another within your network. Additionally, you'll have to get approval for certain medical services.
These restrictions highlight the importance of checking whether your doctor, necessary treatments and drugs are, in fact, covered by your plan.
The Part D coverage gap, also known as the Medicare "donut hole," refers to the range of prescription prices that require patients to pay 100 percent of costs. You must cover all prescription drug expenses once you have passed your initial coverage limit. Medicare will restart prescription coverage once your costs reach the catastrophic coverage threshold, providing an exit from the "donut hole."
In 2010, patients with Part D coverage received no money from Medicare for drug costs up to $310. Medicare covered 75 percent of drugs costs between $310 and $2,830. Patients were responsible for all costs between $2,830 and $6,440 (the donut hole), after which Medicare covered 95 percent of drug costs (American Association of Retired Persons ©, 2010).
To close the Medicare donut hole, you may need to purchase additional prescription drug plans. Premiums of plans targeting gap coverage are nearly double the premiums of basic plans.
One of the goals of the 2010 Patient Protection and Affordable Care Act is to close the gap and keep Medicare premiums stable. Under it, the coverage gap is set to be phased out by 2020.
Moreover, in September of 2010, the country's pharmaceutical manufacturers announced a 50 percent discount on generic drugs for Medicare seniors (U.S. Department of Health and Human Services, 2010).
As you choose between Medicare plans, think about how restrictions and Medicare premium penalties will affect your expenses.