Helping Your Medicare Clients Understand and Utilize their Prescription Drug Benefits


The most challenging part of coverage for Medicare beneficiaries istheir prescription drug coverage. It is such a change from what they hadexperienced for many years under their group health or individual plansthat is makes it difficult for the Medicare beneficiary to understand theirbenefits and options. They need to know how the plans actually work, whether they are enrolling in a Medicare Advantage Plan with Prescription Drug coverage (MAPDs) or Stand-Alone Prescription Drug Plans. In addition, prescription drug coverage varies so much between plans and copays, depending on their pharmacy that beneficiaries find it difficult to make a comfortable choice.

The Medicare focused agent is one of the best resources to help the Medicare beneficiary to understand their options for coverage and how it works. It does require that the agent review and understand the prescription drug coverageunder the MAPD and stand-alone plans, and are able to understand and effectively communicate the terms and how the coverage functions under the plans. We have many tools offered by Medicare and the MAPD and the Stand-Alone Drug companies to help Medicare beneficiaries both at time of enrollment and throughout the year with on-going service issues and concerns. Remember, before you begin working with prospects you must obtain a signed Scope of Appointment to provide information about the MAPD and Stand-Alone Drug Plans.

Another great way to assist your clients is to see if they may be eligible for the ExtraHelp program for prescription drugs.


Many agents and Medicare beneficiaries utilize the CMS Medicare website ( to input prescriptions with the drug name, dosage, frequency the drug is taken, their pharmacies and mail order options. It is important that you print out and save your work to share with the client and to document your files. While it is a good tool, there are many challenges as the site no longer maintains the data that you input unless the client has established a account on the website. The client would need to share their id and passcode with the agent to give access to the account. Because we are considered “Trusted Advisors” by CMS clients are able to share that confidential information.

I always use this site as a starting point to see the various plans and options. The plansvary in deductibles, waiver of the deductible for the plan tiers, number of tiers, formularies andfor the Stand-Alone drug plans and monthly premiums. It is also important to review and disclose the Star Rating for the plans.

To take the next step of reviewing the plans with the clients I always access the potential plans’ websites for their most up to date formularies to determine if there are any changes or additions. We have experienced some errors at the beginning of each Annual Open Enrollment period for some of the plans on the Medicare site. Also, bear in mind that formularies may change during the year.

There are other sites that you can use and most Field Marketing Organizations (FMOs) offer these to their contracted agents. They have the advantage of saving the prescription drug information that you had input for later access and changes.

Agents need to cover additional important information with their prospects and clients when presenting MAPD or Stand-Alone Drug plans. Review the Income Related Adjusted Amount (IRMAA) charts found on the website with your prospects and clients. Since 2011, high-income Medicare beneficiaries’ Part D premiums include an additional charge based on their modified adjusted gross income. (It is a two year look back).

Many beneficiaries are not aware that they may appeal the increased amounts if they have a life changing event. The Medicare beneficiary may call Social Security for the appeal form to complete and submit the completed form to Social Security. Some examples of life changing events are:

  • the death of a spouse
  • marriage, divorce or annulment
  • the beneficiary or their spouse stop working or reduce the number of hours worked
  • the involuntary loss of income- producing property due to a natural disaster, disease, fraud, or other circumstances
  • the loss of pension benefits
  • the receipt of settlement payment from a current or former employer due to the employer’s closure or bankruptcy.

Review and understand how the Part D penalty works. The penalty does not apply if someone enrolls when they are first eligible or they have creditable drug coverage after their Initial Enrollment Period.

Medicare has a minimum coverage requirement. Creditable means that the drug coverage was equal to or greater than the required Medicare coverage with a $445 deductible and coinsurance split of 75/25% coverage. Individual plans are not creditable. Companies may offer increased benefits but must offer the minimum coverage.

Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.06 in 2021) times the number of full, uncovered months the beneficiary didn’t have Part D coverage or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to the monthly Part D monthly premium. Note that it is not prorated per each year when there is no coverage but is calculated based on the current year’s penalty by total number of months not covered. The member is not responsible for calculating their own penalty.

Members may appeal the Part D penalty, such as when a member has Veterans coverage. No late enrollment penalties are assessed on those with Low Income Subsidy (Extra Help) or on full MediCal benefits.

You need to be able to explain the tiers (preferred generic, generic, preferred brand, non-preferred brand and specialty) and the applicable copayments and coinsurance amounts. When reviewing the formularies, make sure that you note the drugs that have step therapy or pre-authorization or quantity limits. These also vary by plan.

Review the Part D Coverage Stages— Initial, Coverage Gap and Catastrophic—and the differences on the copayments and coinsurance amounts. It is important to note that the actual price of the drugs does affect the overall cost to the beneficiary, so they really need to use the preferred pharmacies to help save costs.

Help the beneficiary to identify preferred and standard pharmacies for each plan as Preferred Pharmacies usually offer preferred cost-sharing. Most plans offer a mail-order service that may provide greater savings. Discuss that cost-sharing or cost of drugs may change during the year. Long Term Care Facilities are typically treated as standard pharmacies. Some plans do not allow the use of non-network pharmacies unless out of area (call Member Services!)

Review the formularies for alternative prescriptions that they may discuss with their physicians. Most formularies are by the classification of the drugs so they can see the alternative drugs that are covered in the drug classification.

Another great way to assist your clients is to see if they may be eligible for the Extra Help program for prescription drugs. Information and the application may be accessed on the website. “Medicare beneficiaries can qualify for Extra Help with their Medicare prescription drug plan costs. The Extra Help is estimated to be worth about
$5,000 per year. To qualify for the Extra Help, a person must be receiving Medicare, have limited resources and income, and reside in one of the 50 States or the District of Columbia.”

For one of my clients this program made the difference for him to be able to afford his much needed prescription drugs and to buy groceries to feed him and his cat and put gas into his car. It was life changing.

It can be a challenge for Medicare beneficiaries to afford drugs that are not on their plan’s formulary. The beneficiary may want to ask their physician to submit an Appeal to have the drug covered. This is important for the drug to be covered under the plan and be subject to the cost sharing in the three stages in prescription drug coverage. If the drug is not covered the beneficiary may also consider using Pharmacy Discount Programs/cards such as Good RX or discount cards. Some people use Canadian Pharmacies although this is not a legal option at this time unless it is a pharmacy program approved in the United States.

There are some additional ways that the beneficiary may utilize to help save on their drug costs. Consider splitting pills (under supervision of the physician). They should work with Physicians for prescription alternatives. It is important to remind your client that they need to bring their plan formulary to discuss with their physicians as the physicians do not have access to all the plans! Individuals could ask for free samples. I recommend that they do so in the 1st or 2nd quarter of the year.

Individuals should always shop around and compare prices for their rescription drug costs. And, by
using Preventive Care benefits and staying healthy it will help them better manage their prescription drugs needs. Some manufacturers offer special drug programs and cost savings for specific drugs. There are usually income requirements and forms and applications to complete. You can assist your client to identify these programs.

I firmly believe that the agent specializing in Medicare plans can offer real value and assistance to their clients to help them understand and use their prescription drug coverage.

  • As the servicing agent, speak with or meet with your clients at least
  • Help them use medicare. gov and most importantly their plan’s drug formulary.
  • Always review both the or your drug calculator of choice AND the plan’s formulary online.
  • Always print out “Your Plan Results” and document the client’s file with review of prescriptions (dosage, frequency andpharmacies).
  • Remind your client to review their monthly TROOP (True Out of Pocket) Report and to review the plan formulary for drugs withtheir physician.
  • Always be ready to support and provide service.

You can make a difference for your client. There are many ways to help!


MAGGIE STEDT is an independent agent that has specialized in the Medicare market for the past 21 years. She is currently president ofCalifornia Association Health Underwriters (CAHU) and is a past president of her local Orange County Health Underwriters Association (OCAHU) chapter. Reach her at