AHIP Medicare Part D Prescription Drug Plans 1 — Questions and Answers
Question 1: Medicare Part D prescription drug coverage is provided through:
- The federal government directly
- Private insurers approved by CMS (Correct answer)
- State Medicaid agencies
- Hospital systems only
Correct answer: Private insurers approved by CMS
Part D coverage is delivered by private insurance companies that are approved and contracted with CMS.
Question 2: What is a formulary in a Medicare Part D plan?
- The plan's annual deductible schedule
- A list of covered prescription drugs (Correct answer)
- The network of participating pharmacies
- A cost-sharing tier for generic drugs only
Correct answer: A list of covered prescription drugs
A formulary is the list of prescription drugs covered by a Part D plan, typically organized into cost-sharing tiers.
Question 3: What is the Part D late enrollment penalty based on?
- A flat dollar amount per month
- 1% of the national base beneficiary premium for each full month without creditable coverage (Correct answer)
- 10% of the plan's premium per year of delay
- A one-time fee equal to one month's premium
Correct answer: 1% of the national base beneficiary premium for each full month without creditable coverage
The Part D late enrollment penalty is 1% of the national base beneficiary premium multiplied by the number of full months without creditable drug coverage.
Question 4: The 'coverage gap' (donut hole) in Medicare Part D refers to:
- A period with no drug coverage after the deductible
- A temporary limit on drug coverage after total drug costs reach a threshold (Correct answer)
- The gap between Part A and Part B coverage
- A period before the deductible is met
Correct answer: A temporary limit on drug coverage after total drug costs reach a threshold
The coverage gap is a temporary limit on drug coverage after total drug costs (plan + member) reach a defined threshold, during which the member pays a higher cost-share.
Question 5: What is 'catastrophic coverage' in Medicare Part D?
- Coverage that begins after very high out-of-pocket drug costs are met (Correct answer)
- Coverage for catastrophic medical events like strokes
- Coverage for experimental cancer treatments
- Emergency hospital coverage under Part D
Correct answer: Coverage that begins after very high out-of-pocket drug costs are met
Catastrophic coverage kicks in after a beneficiary's out-of-pocket drug spending reaches the catastrophic threshold, significantly reducing their cost-sharing.
Question 6: Which program provides Extra Help (Low Income Subsidy) for Medicare Part D costs?
- Medicaid only
- The Social Security Administration administers the LIS/Extra Help program (Correct answer)
- State Pharmacy Assistance Programs only
- CMS directly pays pharmacies
Correct answer: The Social Security Administration administers the LIS/Extra Help program
The Social Security Administration (SSA) administers the Extra Help/Low Income Subsidy (LIS) program that helps low-income beneficiaries pay Part D costs.
AHIP Medicare Part D Prescription Drug Plans 1
Medicare Part D prescription drug coverage is provided through: