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Chapter 6 - What you pay for your Part D prescription drugs


Chapter 6 - What you pay for your Part D prescription drugs



question mark

    Did you know there are programs to help people pay for their drugs?

    There are programs to help people with limited resources pay for their drugs. These include "Extra Help" and State Pharmaceutical Assistance Programs. For more information, see Chapter 2, Section 7.

Are you currently getting help to pay for your drugs?

If you are in a program that helps pay for your drugs, some information in this Evidence of Coverage about the costs for Part D prescription drugs may not apply to you. We sent you a separate insert, called the "Evidence of Coverage Rider for People Who Get Extra Help Paying for Prescription Drugs" (also known as the "Low Income Subsidy Rider" or the "LIS Rider"), which tells you about your drug coverage. If you don’t have this insert, please call Member Services and ask for the "LIS Rider." (Phone numbers for Member Services are printed on the back cover of this booklet.)


Section 1.1 - Use this chapter together with other materials that explain your drug coverage

This chapter focuses on what you pay for your Part D prescription drugs. To keep things simple, we use "drug" in this chapter to mean a Part D prescription drug. As explained in Chapter 5, not all drugs are Part D drugs – some drugs are covered under Medicare Part A or Part B and other drugs are excluded from Medicare coverage by law.

To understand the payment information we give you in this chapter, you need to know the basics of what drugs are covered, where to fill your prescriptions, and what rules to follow when you get your covered drugs. Here are materials that explain these basics:

  • The plan’s List of Covered Drugs (Formulary). To keep things simple, we call this the "Drug List."

    • This Drug List tells which drugs are covered for you.

    • It also tells which of the 5 "cost-sharing tiers" the drug is in and whether there are any restrictions on your coverage for the drug.

    • If you need a copy of the Drug List, call Member Services (phone numbers are printed on the back cover of this booklet). You can also find the Drug List on our website at www.kelseycareadvantage.com. The Drug List on the website is always the most current.
  • Chapter 5 of this booklet. Chapter 5 gives the details about your prescription drug coverage, including rules you need to follow when you get your covered drugs. Chapter 5 also tells which types of prescription drugs are not covered by our plan.
  • The plan’s Pharmacy Directory. In most situations you must use a network pharmacy to get your covered drugs (see Chapter 5 for the details). The Pharmacy Directory has a list of pharmacies in the plan’s network. It also tells you which pharmacies in our network can give you a long-term supply of a drug (such as filling a prescription for a three-month’s supply).

Section 1.2 - Types of out-of-pocket costs you may pay for covered drugs

To understand the payment information we give you in this chapter, you need to know about the types of out-of-pocket costs you may pay for your covered services. The amount that you pay for a drug is called "cost-sharing" and there are three ways you may be asked to pay.

  • The "deductible" is the amount you must pay for drugs before our plan begins to pay its share.
  • "Copayment" means that you pay a fixed amount each time you fill a prescription.
  • "Coinsurance" means that you pay a percent of the total cost of the drug each time you fill a prescription.

Section 2.1 - What are the drug payment stages for KelseyCare Advantage Rx+Choice members?

As shown in the table below, there are "drug payment stages" for your prescription drug coverage under KelseyCare Advantage Rx+Choice. How much you pay for a drug depends on which of these stages you are in at the time you get a prescription filled or refilled. Keep in mind you are always responsible for the plan’s monthly premium regardless of the drug payment stage.

Stage 1
Yearly Deductible Stage
Stage 2
Initial Coverage Stage
Stage 3
Coverage Gap Stage
Stage 4
Catastrophic Coverage Stage
You begin in this payment stage when you fill your first prescription of the year.
During this stage, you pay the full cost of your drugs.

You stay in this stage until you have paid $50 for your drugs ($50 is the amount of your deductible).

(Details are in Section 4 of this chapter.)
During this stage, the plan pays its share of the cost of your drugs and you pay your share of the cost.

You stay in this stage until your year-to-date "total drug costs" (your payments plus any Part D plan’s payments) total $3,820.

(Details are in Section 5 of this chapter.)
During this stage, you continue to pay the plan copay for Tier 1 (Preferred Generic) drugs or 37% of the costs, whichever is lower. You pay 37% of the price for generic drugs on Tier 2 and Tier 5. For brand name drugs, you pay 25% of the price (plus a portion of the dispensing fee).

You stay in this stage until your year-to-date "out-of-pocket costs" (your payments) reach a total of $5,100. This amount and rules for counting costs toward this amount have been set by Medicare.

(Details are in Section 6 of this chapter.)
During this stage, the plan will pay most of the cost of your drugs for the rest of the calendar year (through December 31, 2019).

(Details are in Section 7 of this chapter.)

Section 3.1 - We send you a monthly report called the "Part D Explanation of Benefits" (the "Part D EOB")

Our plan keeps track of the costs of your prescription drugs and the payments you have made when you get your prescriptions filled or refilled at the pharmacy. This way, we can tell you when you have moved from one drug payment stage to the next. In particular, there are two types of costs we keep track of:

  • We keep track of how much you have paid. This is called your "out-of-pocket" cost.
  • We keep track of your "total drug costs." This is the amount you pay out-of-pocket or others pay on your behalf plus the amount paid by the plan.

Our plan will prepare a written report called the Part D Explanation of Benefits (it is sometimes called the "Part D EOB") when you have had one or more prescriptions filled through the plan during the previous month. It includes:

  • Information for that month. This report gives the payment details about the prescriptions you have filled during the previous month. It shows the total drug costs, what the plan paid, and what you and others on your behalf paid.
  • Totals for the year since January 1. This is called "year-to-date" information. It shows you the total drug costs and total payments for your drugs since the year began.

Section 3.2 - Help us keep our information about your drug payments up to date

To keep track of your drug costs and the payments you make for drugs, we use records we get from pharmacies. Here is how you can help us keep your information correct and up to date:

  • Show your membership card when you get a prescription filled. To make sure we know about the prescriptions you are filling and what you are paying, show your plan membership card every time you get a prescription filled.
  • Make sure we have the information we need. There are times you may pay for prescription drugs when we will not automatically get the information we need to keep track of your out-of-pocket costs. To help us keep track of your out-of-pocket costs, you may give us copies of receipts for drugs that you have purchased. (If you are billed for a covered drug, you can ask our plan to pay our share of the cost. For instructions on how to do this, go to Chapter 7, Section 2 of this booklet.) Here are some types of situations when you may want to give us copies of your drug receipts to be sure we have a complete record of what you have spent for your drugs:

    • When you purchase a covered drug at a network pharmacy at a special price or using a discount card that is not part of our plan’s benefit.

    • When you made a copayment for drugs that are provided under a drug manufacturer patient assistance program.

    • Any time you have purchased covered drugs at out-of-network pharmacies or other times you have paid the full price for a covered drug under special circumstances.
  • Send us information about the payments others have made for you. Payments made by certain other individuals and organizations also count toward your out-of-pocket costs and help qualify you for catastrophic coverage. For example, payments made by a State Pharmaceutical Assistance Program, an AIDS drug assistance program (ADAP), the Indian Health Service, and most charities count toward your out-of-pocket costs. You should keep a record of these payments and send them to us so we can track your costs.
  • Check the written report we send you. When you receive a Part D Explanation of Benefits (a "Part D EOB") in the mail, please look it over to be sure the information is complete and correct. If you think something is missing from the report, or you have any questions, please call us at Member Services (phone numbers are printed on the back cover of this booklet). Be sure to keep these reports. They are an important record of your drug expenses.

Section 4.1 - You stay in the Deductible Stage until you have paid $50 for your drugs

The Deductible Stage is the first payment stage for your drug coverage. This stage begins when you fill your first prescription in the year. When you are in this payment stage, you must pay the full cost of your drugs until you reach the plan’s deductible amount, which is $50 for 2019.

  • Your "full cost" is usually lower than the normal full price of the drug, since our plan has negotiated lower costs for most drugs.
  • The "deductible" is the amount you must pay for your Part D prescription drugs before the plan begins to pay its share.

Once you have paid $50 for your drugs, you leave the Deductible Stage and move on to the next drug payment stage, which is the Initial Coverage Stage.


Section 5.1 - What you pay for a drug depends on the drug and where you fill your prescription

During the Initial Coverage Stage, the plan pays its share of the cost of your covered prescription drugs, and you pay your share (your copayment or coinsurance amount). Your share of the cost will vary depending on the drug and where you fill your prescription.

The plan has five cost-sharing tiers

Every drug on the plan’s Drug List is in one of five cost-sharing tiers. In general, the higher the cost-sharing tier number, the higher your cost for the drug:

Cost-sharing Tier Drugs Included in Tier
Tier 1 (lowest) Preferred Generic
Tier 2 Generic
Tier 3 Preferred Brand
Tier 4 Non-Preferred Brand
Tier 5 (highest) Specialty

To find out which cost-sharing tier your drug is in, look it up in the plan’s Drug List.

Your pharmacy choices

How much you pay for a drug depends on whether you get the drug from:

  • A network retail pharmacy that offers standard cost-sharing
  • A network retail pharmacy that offers preferred cost-sharing
  • A pharmacy that is not in the plan’s network

For more information about these pharmacy choices and filling your prescriptions, see Chapter 5 in this booklet and the plan’s Pharmacy Directory.

Generally, we will cover your prescriptions only if they are filled at one of our network pharmacies. Some of our network pharmacies also offer preferred cost-sharing. You may go to either network pharmacies that offer preferred cost-sharing or other network pharmacies that offer standard cost-sharing to receive your covered prescription drugs. Your costs may be less at pharmacies that offer preferred cost-sharing.


Section 5.2 - A table that shows your costs for a one-month supply of a drug

During the Initial Coverage Stage, your share of the cost of a covered drug will be either a copayment or coinsurance.

  • "Copayment" means that you pay a fixed amount each time you fill a prescription.
  • "Coinsurance" means that you pay a percent of the total cost of the drug each time you fill a prescription.

As shown in the table below, the amount of the copayment or coinsurance depends on which cost-sharing tier your drug is in. Please note:

  • If your covered drug costs less than the copayment amount listed in the chart, you will pay that lower price for the drug. You pay either the full price of the drug or the copayment amount, whichever is lower.
  • We cover prescriptions filled at out-of-network pharmacies in only limited situations. Please see Chapter 5, Section 2.4 for information about when we will cover a prescription filled at an out-of-network pharmacy.

Your share of the cost when you get a one-month supply of a covered Part D prescription drug:

Tier Standard retail cost-sharing (in-network)
(up to a 30-day supply)
Preferred retail cost-sharing (in-network)
(up to a 30-day supply)
Long-term care (LTC) cost-sharing
(up to a 31-day supply)
Out-of-network cost-sharing
(Coverage is limited to certain situations; see Chapter 5 for details.) (up to a 30-day supply)
Cost-Sharing
Tier 1

(Preferred Generic)
$8 $3 $8 $8
Cost-Sharing
Tier 2

(Generic)
$20 $17 $20 $20
Cost-Sharing
Tier 3

(Preferred Brand)
$45 $40 $45 $45
Cost-Sharing
Tier 4

(Non- Preferred Brand)
$70 $60 $70 $70
Cost-Sharing
Tier 5

(Specialty)
32% 32% 32% 32%

Section 5.3 - If your doctor prescribes less than a full month’s supply, you may not have to pay the cost of the entire month’s supply

Typically, the amount you pay for a prescription drug covers a full month’s supply of a covered drug. However, your doctor can prescribe less than a month’s supply of drugs. There may be times when you want to ask your doctor about prescribing less than a month’s supply of a drug (for example, when you are trying a medication for the first time that is known to have serious side effects). If your doctor prescribes less than a full month’s supply, you will not have to pay for the full month’s supply for certain drugs.

The amount you pay when you get less than a full month’s supply will depend on whether you are responsible for paying coinsurance (a percentage of the total cost) or a copayment (a flat dollar amount).

  • If you are responsible for coinsurance, you pay a percentage of the total cost of the drug. You pay the same percentage regardless of whether the prescription is for a full month’s supply or for fewer days. However, because the entire drug cost will be lower if you get less than a full month’s supply, the amount you pay will be less.
  • If you are responsible for a copayment for the drug, your copay will be based on the number of days of the drug that you receive. We will calculate the amount you pay per day for your drug (the "daily cost-sharing rate") and multiply it by the number of days of the drug you receive.

    • Here’s an example: Let’s say the copay for your drug for a full month’s supply (a 30-day supply) is $30. This means that the amount you pay per day for your drug is $1. If you receive a 7 days’ supply of the drug, your payment will be $1 per day multiplied by 7 days, for a total payment of $7.

Daily cost-sharing allows you to make sure a drug works for you before you have to pay for an entire month’s supply. You can also ask your doctor to prescribe, and your pharmacist to dispense, less than a full month’s supply of a drug or drugs, if this will help you better plan refill dates for different prescriptions so that you can take fewer trips to the pharmacy. The amount you pay will depend upon the days’ supply you receive.


Section 5.4 - A table that shows your costs for a long-term up to a 90-day supply of a drug

For some drugs, you can get a long-term supply (also called an "extended supply") when you fill your prescription. A long-term supply is up to a 90-day supply. (For details on where and how to get a long-term supply of a drug, see Chapter 5, Section 2.3.)

The table below shows what you pay when you get a long-term up to a 90-day supply of a drug.

  • Please note: If your covered drug costs are less than the copayment amount listed in the chart, you will pay that lower price for the drug. You pay either the full price of the drug or the copayment amount, whichever is lower.

Your share of the cost when you get a long-term supply of a covered Part D prescription drug:

Tier Standard retail cost-sharing (in-network)
(up to a 90-day supply)
Preferred retail cost-sharing (in-network)
(up to a 90-day supply)
Cost-Sharing Tier 1
(Preferred Generic)
$24 $7.50
Cost-Sharing Tier 2
(Generic)
$60 $42.50
Cost-Sharing Tier 3
(Preferred Brand)
$135 $100
Cost-Sharing Tier 4
(Non- Preferred Brand)
$210 $150
Cost-Sharing Tier 5
(Specialty)
A long-term supply is not available for drugs in Tier 5 Specialty. A long-term supply is not available for drugs in Tier 5 Specialty.

Section 5.5 - You stay in the Initial Coverage Stage until your total drug costs for the year reach $3,820

You stay in the Initial Coverage Stage until the total amount for the prescription drugs you have filled and refilled reaches the $3,820 limit for the Initial Coverage Stage.

Your total drug cost is based on adding together what you have paid and what any Part D plan has paid:

  • What you have paid for all the covered drugs you have gotten since you started with your first drug purchase of the year. (See Section 6.2 for more information about how Medicare calculates your out-of-pocket costs.) This includes:

    • The $50 you paid when you were in the Deductible Stage.

    • The total you paid as your share of the cost for your drugs during the Initial Coverage Stage.
  • What the plan has paid as its share of the cost for your drugs during the Initial Coverage Stage. (If you were enrolled in a different Part D plan at any time during 2019, the amount that plan paid during the Initial Coverage Stage also counts toward your total drug costs.)

The Part D Explanation of Benefits (Part D EOB) that we send to you will help you keep track of how much you and the plan, as well as any third parties, have spent on your behalf during the year. Many people do not reach the $3,820 limit in a year.

We will let you know if you reach this $3,820 amount. If you do reach this amount, you will leave the Initial Coverage Stage and move on to the Coverage Gap Stage.


Section 6.1 - You stay in the Coverage Gap Stage until your out-of-pocket costs reach $5,100

When you are in the Coverage Gap Stage, the Medicare Coverage Gap Discount Program provides manufacturer discounts on brand name drugs. You pay 25% of the negotiated price and a portion of the dispensing fee for brand name drugs. Both the amount you pay and the amount discounted by the manufacturer count toward your out-of-pocket costs as if you had paid them and moves you through the coverage gap.

You continue paying your Initial Coverage Stage cost-share for Tier 1 Preferred Generic drugs.

You also receive some coverage for Tier 2 (Generic) and Tier 5 (Specialty) generic drugs. You pay no more than 37% of the cost for generic drugs and the plan pays the rest. For generic drugs, the amount paid by the plan (63%) does not count toward your out-of-pocket costs. Only the amount you pay counts and moves you through the coverage gap.

You continue paying the discounted price for brand name drugs and no more than 37% of the costs of generic drugs until your yearly out-of-pocket payments reach a maximum amount that Medicare has set. In 2019, that amount is $5,100.

Medicare has rules about what counts and what does not count as your out-of-pocket costs. When you reach an out-of-pocket limit of $5,100, you leave the Coverage Gap Stage and move on to the Catastrophic Coverage Stage.


Section 6.2 - How Medicare calculates your out-of-pocket costs for prescription drugs

Here are Medicare’s rules that we must follow when we keep track of your out-of-pocket costs for your drugs.

These payments are included in your out-of-pocket costs

When you add up your out-of-pocket costs, you can include the payments listed below (as long as they are for Part D covered drugs and you followed the rules for drug coverage that are explained in Chapter 5 of this booklet):

  • The amount you pay for drugs when you are in any of the following drug payment stages:

    • The Deductible Stage

    • The Initial Coverage Stage

    • The Coverage Gap Stage
  • Any payments you made during this calendar year as a member of a different Medicare prescription drug plan before you joined our plan.

It matters who pays:

  • If you make these payments yourself, they are included in your out-of-pocket costs.
  • These payments are also included if they are made on your behalf by certain other individuals or organizations. This includes payments for your drugs made by a friend or relative, by most charities, by AIDS drug assistance programs, by a State Pharmaceutical Assistance Program that is qualified by Medicare, or by the Indian Health Service. Payments made by Medicare’s "Extra Help" Program are also included.
  • Some of the payments made by the Medicare Coverage Gap Discount Program are included. The amount the manufacturer pays for your brand name drugs is included. But the amount the plan pays for your generic drugs is not included.

Moving on to the Catastrophic Coverage Stage:

When you (or those paying on your behalf) have spent a total of $5,100 in out-of-pocket costs within the calendar year, you will move from the Coverage Gap Stage to the Catastrophic Coverage Stage.


These payments are not included in your out-of-pocket costs

When you add up your out-of-pocket costs, you are not allowed to include any of these types of payments for prescription drugs:

  • The amount you pay for your monthly premium.
  • Drugs you buy outside the United States and its territories.
  • Drugs that are not covered by our plan.
  • Drugs you get at an out-of-network pharmacy that do not meet the plan’s requirements for out-of-network coverage.
  • Non-Part D drugs, including prescription drugs covered by Part A or Part B and other drugs excluded from coverage by Medicare.
  • Payments you make toward prescription drugs not normally covered in a Medicare Prescription Drug Plan.
  • Payments made by the plan for your brand or generic drugs while in the Coverage Gap.
  • Payments for your drugs that are made by group health plans including employer health plans.
  • Payments for your drugs that are made by certain insurance plans and government-funded health programs such as TRICARE and the Veterans Affairs.
  • Payments for your drugs made by a third-party with a legal obligation to pay for prescription costs (for example, Workers’ Compensation).

Reminder: If any other organization such as the ones listed above pays part or all of your out-of-pocket costs for drugs, you are required to tell our plan. Call Member Services to let us know (phone numbers are printed on the back cover of this booklet).


How can you keep track of your out-of-pocket total?

  • We will help you. The Part D Explanation of Benefits (Part D EOB) report we send to you includes the current amount of your out-of-pocket costs (Section 3 in this chapter tells about this report). When you reach a total of $5,100 in out-of-pocket costs for the year, this report will tell you that you have left the Coverage Gap Stage and have moved on to the Catastrophic Coverage Stage.
  • Make sure we have the information we need. Section 3.2 tells what you can do to help make sure that our records of what you have spent are complete and up to date.

Section 7.1 - Once you are in the Catastrophic Coverage Stage, you will stay in this stage for the rest of the year

You qualify for the Catastrophic Coverage Stage when your out-of-pocket costs have reached the $5,100 limit for the calendar year. Once you are in the Catastrophic Coverage Stage, you will stay in this payment stage until the end of the calendar year.

During this stage, the plan will pay most of the cost for your drugs.

  • Your share of the cost for a covered drug will be either coinsurance or a copayment, whichever is the larger amount:

    • – either – coinsurance of 5% of the cost of the drug

    • – or – $3.40 for a generic drug or a drug that is treated like a generic and $8.50 for all other drugs.
  • Our plan pays the rest of the cost.

Section 8.1 - Our plan may have separate coverage for the Part D vaccine medication itself and for the cost of giving you the vaccine

Our plan provides coverage for a number of Part D vaccines. We also cover vaccines that are considered medical benefits. You can find out about coverage of these vaccines by going to the Medical Benefits Chart in Chapter 4, Section 2.1.

There are two parts to our coverage of Part D vaccinations:

  • The first part of coverage is the cost of the vaccine medication itself. The vaccine is a prescription medication.
  • The second part of coverage is for the cost of giving you the vaccine. (This is sometimes called the "administration" of the vaccine.)

What do you pay for a Part D vaccination?

What you pay for a Part D vaccination depends on three things:

  1. The type of vaccine (what you are being vaccinated for).

    • Some vaccines are considered medical benefits. You can find out about your coverage of these vaccines by going to Chapter 4, Medical Benefits Chart (what is covered and what you pay).

    • Other vaccines are considered Part D drugs. You can find these vaccines listed in the plan’s List of Covered Drugs (Formulary).
  1. Where you get the vaccine medication.
  1. Who gives you the vaccine.

What you pay at the time you get the Part D vaccination can vary depending on the circumstances. For example:

  • Sometimes when you get your vaccine, you will have to pay the entire cost for both the vaccine medication and for getting the vaccine. You can ask our plan to pay you back for our share of the cost.
  • Other times, when you get the vaccine medication or the vaccine, you will pay only your share of the cost.

To show how this works, here are three common ways you might get a Part D vaccine. Remember you are responsible for all of the costs associated with vaccines (including their administration) during the Deductible and Coverage Gap Stage of your benefit.


Situation 1:

You buy the Part D vaccine at the pharmacy and you get your vaccine at the network pharmacy. (Whether you have this choice depends on where you live. Some states do not allow pharmacies to administer a vaccination.)

      • You will have to pay the pharmacy the amount of your copayment for the vaccine and the cost of giving you the vaccine.

      • Our plan will pay the remainder of the costs.

Situation 2: You get the Part D vaccination at your doctor’s office.

      • When you get the vaccination, you will pay for the entire cost of the vaccine and its administration.

      • You can then ask our plan to pay our share of the cost by using the procedures that are described in Chapter 7 of this booklet (Asking us to pay our share of a bill you have received for covered medical services or drugs).

      • You will be reimbursed the amount you paid less your normal copayment for the vaccine (including administration) less any difference between the amount the doctor charges and what we normally pay. (If you get "Extra Help," we will reimburse you for this difference.)

Situation 3:

You buy the Part D vaccine at your pharmacy, and then take it to your doctor’s office where they give you the vaccine.

      • You will have to pay the pharmacy the amount of your copayment for the vaccine itself.

      • When your doctor gives you the vaccine, you will pay the entire cost for this service. You can then ask our plan to pay our share of the cost by using the procedures described in Chapter 7 of this booklet.

      • You will be reimbursed the amount charged by the doctor for administering the vaccine less any difference between the amount the doctor charges and what we normally pay. (If you get "Extra Help," we will reimburse you for this difference.)

Section 8.2 - You may want to call us at Member Services before you get a vaccination

The rules for coverage of vaccinations are complicated. We are here to help. We recommend that you call us first at Member Services whenever you are planning to get a vaccination. (Phone numbers for Member Services are printed on the back cover of this booklet.)

  • We can tell you about how your vaccination is covered by our plan and explain your share of the cost.
  • We can tell you how to keep your own cost down by using providers and pharmacies in our network.
  • If you are not able to use a network provider and pharmacy, we can tell you what you need to do to get payment from us for our share of the cost.