Part D drug plans are how Medicare recipients receive their prescription drug coverage. Whether you have a Medicare Advantage plan or a Supplemental plan, your Part D works the same way with 4 levels of coverage. The 4 levels of coverage are:

Deductible Phase – If your plan has a deductible, you must pay the full amount of your medications until the deductible is met. Some plans exclude Tier 1 and Tier 2 drugs from the deductible.

Initial Coverage Phase – You pay a portion of your drug cost via a copayment or coinsurance until your total costs reach $4,130.00 (Initial Coverage Limit for 2021 plans). Once this is met, you move into the Coverage Gap.

Coverage Gap or Donut Hole – You pay 25% of drug costs for brand and generic drugs until total out-of-pocket (TROOP) costs reach $6,550.00 (TROOP for 2021 plans) at which time you move into Catastrophic Coverage.

Catastrophic Coverage Phase – You pay the greater amount of 5% of the drug costs on any tier or $3.60 copay for Tier 1 & 2 drugs and $8.95 copay for all other tiers.

Part D drug plans may have changes every year which might include, premium and deductible increases (or decreases), formulary changes (the drugs covered under the plan), tier changes (changes to tiers of covered medications) and changes in preferred pharmacies. You will receive an Annual Notice of Change every year from your drug plan. You should check to make sure your medications are still covered under the plan, the tiers haven’t changed and whether a deductible has increased or been added.

The Annual Enrollment Period starting on October 15 and lasting to December 7 is the time to switch coverage, with your new plan going into effect on January 2021.

A Medi-Medi plan, also often referred to as a dual-special-needs plan or “look alike” plan, is a type of Medicare Advantage plan for people who qualify for both Medicare and Medicaid or Medi-Cal in California. Medicare is the primary payer on these types of plans with Medi-Cal being the secondary payer. You must go to doctors who accept both Medicare and Medi-Cal, and your share of cost is determined by your asset level. In California, to qualify in 2020 as a single person, your asset level is at $2,000 or below ($3,000 or below for couples). There are many things that are not included in your asset level like your primary residence, household items, pre-paid burial expenses and your car.

The advantages of having a Medi-Medi plan are that they coordinate your care with a provider network and often include extra benefits such as vision, dental and transportation services. You do, however, have to use the doctors and specialists in the plan’s network to be covered (except in cases of emergency). These plans are provided by private insurance companies, and the benefits and costs can vary from company to company. Prescription drugs are included in the plan with copays at no more than $1.30 for generic drugs and no more than $8.95 for brand drugs. If you pay no share of cost, your copays would be $0 for your medications.

You will automatically be enrolled in Medi-Cal if you qualify and sign up for Supplemental Security Income (SSI) through Social Security. You may qualify, as well, if you don’t get SSI, but you must contact your Medi-Cal county office to see if you meet eligibility requirements. If you are considering a Medi-Medi plan, be sure and check that your current doctors are in the plan’s network (if you wish to remain with them), and that your medications are in the plan’s formulary. You can also apply for one of these plans if you become newly eligible for assistance or during the Annual Enrollment Period from October 15 to December 7.

Seven companies have won grants from the National Institutes of Health (NIH) to develop better and faster testing to help fight the spread of the Coronavirus.  Six of the seven companies are here in California.     

“This is a very substantial investment to try to speed up the availability of COVID-19 testing to try to deal with this pandemic,” said Francis Collins, NIH Director, during a virtual briefing to reporters.   

Mammoth Biosciences, Inc. and Fluidigm Corp. are two San Francisco-based companies that will get a portion of the $1.5 billion in emergency funding provided by Congress back in April. Mammoth will base its testing using CRISPR, DNA editing technology that can pinpoint a specific location in a genetic code. Fluidigm has developed a saliva test that could be a game-changer for ease and rapid testing.        

Quidell Corp. and Mesa Biotech, headquartered in San Diego, also received funding.  Quidell’s new antigen test can get a result in as little as 15 minutes, and Mesa’s hand-held device can produce results in as little as 30 minutes.

Helix OpCo LLC is located in San Mateo and plans to ramp up processing to up to 100,000 nasal swabs by year’s end using next generation sequencing, and Ginko Bioworks in Boston is scaling up to do the the same. The final company, Talis Biomedical located in Melo Park, California has a test which uses a multiplexed cartridge to detect the virus with results in 30 minutes.

Trump recently signed four executive orders in hopes of curbing high drug prices in the United States. One of the orders targets how Medicare reimburses physicians for the administration of medications in hospital or office settings which is covered under Medicare Part B. The standing rule is that doctors can charge up to an additional 6% of the average sales price of a medication, which would incentivize physicians to use higher cost drugs. Trump’s order reduces the amount that can be charged to the lowest price paid by industrialized nations under an International Pricing Index.

Another executive order revamps the rebate rule which allows pharmacy benefit managers to pocket these payments instead of passing these discounts to the consumer. Under the order, patients would receive the savings instead of these middlemen, who would receive a fixed dollar amount instead of a percentage of the price of the medications.

Obtaining low-cost drugs from other countries is addressed in an order which allows FDA-approved medications to be imported, and the final order targets lowering the cost of insulin and epinephrine. Insulin prices have more than doubled in the last five years and the average cost of a two-pack EpiPen continues to soar. The order would require Federally Qualified Health Centers who serve low-income patients to pass on savings to their consumers instead of pocketing the discounts made available to them under the federal drug discount program or 340B.

If you have Medicare, you are considered among the high-risk groups for having complications should you get the COVID-19 virus, so knowing how you are going to be covered should you get sick is important. Utilizing the services you are entitled to can help keep you and your loved ones healthy and safe during these difficult times.

Medicare covers COVID-19 lab tests with no out-of-pocket costs, so if you feel ill, get tested. If you think that you have already had the virus, Medicare also covers the FDA-authorized antibody test. Once there is a COVID-19 vaccine, that will be covered as well.

Medically necessary hospitalizations are covered, but you will pay any deductibles, copays or coinsurance applicable to your stay. If you have a Medicare Supplemental or Advantage plan, the plan may pay all or some of these associated costs. Advantage plans may also pay for costs like meal delivery or medical transportation.

Under the 1135 Waiver implemented in March by the Coronavirus Preparedness and Response Supplemental Appropriations Act, the Centers for Medicare and Medicaid have expanded the availability and use of telehealth services to allow evaluation and management visits with your doctor, mental health counseling and preventative screenings. These “virtual check-ins” are brief communications with your health practitioner for an issue that wasn’t related to a medical visit within the previous 7 days and does not lead to a medical visit within the next 24 hours or next available appointment. Verbal consent by you and documentation by your doctor is needed to initiate these services. Online patient portals can also be used with prior consent as well.

If you do go to the doctor, be ready for some changes many practices have implemented to minimize exposure to the virus. You might have to wait in your car prior to the start of your appointment, have your temperature taken, wear a face mask, and social distance.

When you are considering your options to cover the gaps in Medicare, i.e. deductibles, copays and coinsurance (yes, Medicare has all those), you might be looking at Supplemental or Advantage plans. There is a lot of confusion about how these types of plans differ and how they cover what Medicare doesn’t.

First, let’s take a look at Medicare Supplemental plans. These plans work similar to a PPO. With a regular PPO plan you can go to doctors in or out of network, but you generally pay more if you go out of network. Medicare Supplemental plans work a little differently because there are no networks. The only stipulation is that you must go to doctors that take Medicare whether they are primary care doctors or specialists. You can go to any doctor throughout the United States, including specialists, and be covered under your Supplemental plan. Supplemental plans are standardized, which means they have the same coverage regardless of carrier or region and are offered by private insurance companies. Premiums are determined by age and geographic location. You don’t need referrals from your primary care doctor to see a specialist. Supplemental plans do not include prescription drug coverage so you would have to purchase a separate Part D drug plan to cover your prescription medications.

Advantage Plans are also called Medicare Part C. Most Advantage plans work like an HMO. You must go to network doctors or you won’t be covered. They are specific to a certain geographic location, usually by county, and, in most cases, you must get a referral from your primary care doctor to see a specialist. Advantage plans are offered through private insurance companies and combine your Medicare Parts A, B and D (prescription drug coverage) into one plan. There are some plans that don’t have the Part D added if you have other drug coverage like Veteran’s Benefits. When you sign up for an Advantage Plan, you opt out of Original Medicare and the plan administers all your benefits. These plans may offer extra coverage like vision, hearing, and transportation to and from medical facilities, although some Supplemental plans are beginning to add these benefits as well. Advantage Plans include Special Needs Plans for people with certain chronic conditions like diabetes or heart disease and those that are eligible for both Medicare and Medi-Cal.

Balance Billing is a common problem when you go to out-of-network doctors not covered or partially covered by your health insurance. The consumer is charged for these costs in bills that could come weeks or months after the initial visit or procedure.

There are steps you can take, however, to mitigate these surprise medical bills.  First, be sure to check your Explanation of Benefits (EOB) which usually comes with the bill.  Check the dates to make sure the service you are being billed for is accurate and which services were actually performed by out-of-network providers.  Be prepared.  Get an itemized copy of your bill and know what the “usual” charge is for the procedure.  Sites like FAIR Health can help you determine what costs are common for medical procedures in your area.  Call the provider and ask to speak to someone in billing who can assist you with the bill.  You can also write to your insurer and request that they cover a portion or all of the balance billing.

Ultimately, one of the best ways to avoid balance billing is to make sure you go to network providers.  Call your insurer in advance, if possible, to make certain all your care is being handled by in-network doctors, from the surgeon to the anesthesiologist.  Make sure all lab work and tests needed in preparation for the surgery is covered as well.  

IRMAA stands for Income-Related Monthly Adjustment Amount, and what it means is that you are being charged more on your Medicare Part B premium and your Medicare Part D Drug Plan premium based on your income. If your Modified Adjusted Gross Income, or MAGI, is over $87,000 as a single person or over $174,000 as a couple, you will have this surcharge added to your monthly premiums. It goes up incrementally as your income rises to an additional $347.00 on Part B and $76.40 for Part D if you are in the highest brackets (above $500,000 for individuals or $750,000 for couples). The amount is added to the standard premium which is $144.60 for 2020. The good news is that it doesn’t affect what you pay for a supplemental or advantage plan. 


Only about 5% of people on Medicare pay the extra charge which was implemented on Part B in 2003 and on Part D in 2011 as a way to save the federal government money on the burgeoning cost of the Medicare program.  What can be even more frustrating is that Medicare looks at income tax records from two years prior. That means if you sign up for Medicare in 2020, your IRMAA will be based on your 2018 tax records.  Most people are making less money once they retire and go on Medicare, so what can you do if you are in this situation?  You can appeal the extra charges to Medicare directly. By filing form SSA-44, Medicare may adjust the amount you owe to reflect your current income levels.  If you don’t appeal, your income is re-evaluated yearly, so you won’t be paying the higher premiums forever if your income does decrease.  

In a continuing effort to lower health-care expenses for Californians, Governor Newsom is proposing that the state manufacture generic drugs, leveraging the huge market of its residents to increase competition and lower pricing.  Along with asking the drug manufacturers to make rebates more available and establishing a health-care affordability office, Newsom maintains that the reforms would “put consumers back in the driver seat.”   

According to the Kaiser Family Foundation, six in ten Americans take a prescription medication and nearly 80% worry about the cost.  Also, three in ten don’t take their medications because they are too expensive.  Amid allegations of price-fixing by big pharma, Newsom signed a bill in 2019 to deter “pay-to-delay” agreements between drug companies and competing manufacturers of generic drugs that serve to delay release of the cheaper off-brands.  According to a study by the Federal Trade Commission, these deals to stifle competition cost consumers as much as $3.5 billion in higher drug costs every year.

If you’re approaching Medicare eligibility, it is important to know the various times to sign up for this important milestone.  Below are the enrollment periods that will help you determine what your eligibility is or whether you need to sign up for Medicare at all:

Annual Enrollment Period – Period every year between October 15 and December 7 when you can change your Medicare Advantage Plan or Prescription Drug Plan.

Open Enrollment Period – Additional period of time from January 1 through March 31 when you can change your Medicare Advantage Plan.  You can also return to Original Medicare with or without a drug plan.

Retirement/Loss of Group Health Insurance – Period of time once you retire or lose creditable group coverage to sign up for Medicare and a Supplemental, Advantage  Plan and/or Part D Drug plan.

Supplemental Plan Birthday Rule – Period that allows you to change your Supplemental plan that begins 30 days before your birthday up to 60 days after your birthday.

Special Enrollment Period – Period of time to change your Medicare Advantage plan or Part D drug plan because of a life event, i.e., moving out of service area, qualifying for Low Income Subsidy.    If you are still actively working and have a creditable (as good as Medicare) group employee health insurance plan, you may be able to keep the plan until you retire and delay signing up for Medicare without incurring penalties.  Check with your benefit’s administrator to see if this is a viable option for you.