Are There Different Types of Drug Plans?

Prescription drug coverage, also known as a drug plan, is a type of insurance that covers both brand-name drugs and generic prescription drugs. The Medicare Prescription Drug Improvement and Modernization Act, passed in the year 2003, is a benefit program which requires Medicare to pay a part of prescription drug costs for seniors. Drugs plans exist to aide those people who have chronic conditions, and are in need of financial support for their medications.

Protection is offered for individuals who have very high drug costs, or individuals who somehow gain unexpected prescription drug bills. Those individuals who opt to purchase this type of insurance are provided with a greater peace of mind as they are protected from unexpected expenses. Even if you are currently the type who isn’t in need of prescription drugs, it would still be a good idea to consider getting this type of plan. Generally, as a person ages, the need for prescription drugs rises. Those who purchase this type of plan as soon as they can are immediately provided with protection.

This type of plan typically includes a formulary. A formulary is a preferred drug list which is provided by your insurance company. It should contain medications which your plan prefers. These medications can usually be prescribed without the prior authorization of a doctor. The purpose of this list is to keep the costs of drugs down for the company, with the joined ability of still being able to offer you a competitive choice of medications. Another purpose of a preferred drug list is to be able to encourage individuals to get a generic form a certain drug. Some plans charge more for individuals who opt for non-generic drugs.

In the situation that your doctor prescribes a drug not on the list, your insurance company will usually provide an authorization process. In this process, drugs are approved on a case-by-case basis. For them to be approved, the usual case is that the approved medications did not work or you experienced adverse effects from the said medications.

Prescriptions Drug Plans (PDPs) and
Medicare Advantage Plans with Part D (MA-PDs)

Two main categories exist for the types of drug plans. These two types are Prescription Drug Plans (PDPs) and Medicare Advantage Plans with Part D (MA-PDs).

Prescription Drug Plans provide solely for prescription drugs. On the other hand, Medicare Advantage Plans with Part D offers other Medicare-covered benefits along with drug benefits. The Medicare-covered benefits include physical check-ups, hospital bills, home health care and even medical equipment services.

There are numerous types of plan variations under these two categories. There is the Defined Standard Plan, which provides a 25 percent coinsurance for the cost of the covered drugs up to an initial coverage limit. There is also the Actuarially Equivalent Standard Plan, which has a cost-sharing structure with flat copayments.

Various other types aside from the mentioned exist. It is important to know more about your plan. Make sure you are adeptly informed for the purpose of putting the plan to its utmost potential.