2025 AHIP – Module 3 Final Review

Question 1

One of your clients, Lauren Nichols, has heard about a Medicare concept from one of her neighbors called TrOOP. She asks you to explain it. What do you say?

TrOOP stands for true out-of-pocket costs that count toward the Medicare Part D catastrophic limit and include only expenses paid directly by a Medicare Part D beneficiary.

TrOOP refers to true out-of-pocket costs paid by a Part D beneficiary for non-prescription over-the-counter (OTC) drugs and vitamins that are not covered by their plan.

TrOOP stands for true out-of-pocket costs that count toward the Medicare Part D catastrophic limit and include not only expenses paid by a beneficiary but also in some instances amounts paid by or through qualified State Pharmaceutical Assistance Programs.

TrOOP refers to true out-of-pocket expenses paid for drugs not included in a Part D plan’s formulary.

Question 2

Mr. Zachow has a condition for which three drugs are available. He has tried two but had an allergic reaction to them. Only the third drug works for him and it is not on his Part D plan’s formulary. What could you tell him to do?

Mr. Zachow has a right to request a formulary exception to obtain coverage for his Part D drug. He or his physician could obtain the standardized request form on the plan’s website, fill it out, and submit it to his plan.

Mr. Zachow could immediately disenroll from the Part D plan and select a new Part D plan that covers the drug that works for him.

Mr. Zachow will have to wait until the Annual Election Period when he can switch Part D plans. In the meantime, he will have to pay for his drug out of pocket.

Mr. Zachow will need to enroll in a Special Needs Plan to obtain coverage for his medication.

Question 3

Mr. and Mrs. Vaughn both take a specialized multivitamin prescription each day. Mr. Vaughn takes a prescription to help to regrow his hair. They are anxious to have their Medicare prescription drug plan cover these drug needs. What should you tell them?

Medicare prescription drug plans are not permitted to cover the prescription medications the Vaughns are interested in under Part D coverage, however, plans may cover them as supplemental benefits and the Vaughns could look into that possibility.

The vitamins the Vaughns are taking will be covered under Part D because their physician suggested they should take vitamins, but the hair loss medication cannot be covered.

Medicare prescription drug plans are permitted to cover vitamins, but not drugs for cosmetic purposes.

Mr. Vaughn’s hair growth medication would only be covered under Part D if his balding resulted from an illness or was a side effect of a treatment such as chemotherapy.

Question 4

Who is most likely to benefit from the Medicare Prescription Payment Plan?

Harry, who is enrolled in Part D and suffers from high blood pressure for which he takes a generic medication daily but incurs low-out-pocket costs.

Ida, a retired schoolteacher with creditable drug coverage through her former employer.

Kevin, who suffered a heart attack at the beginning of the year requiring him to take an expensive brand name blood thinner on a daily, as well as an equally expensive injectable cholesterol medication on a bi-weekly basis for which he incurs high out-of-pocket costs.

Jim, a healthy retiree enrolled in Part D, who just takes over-the-counter (OTC) low-dose aspirin as a preventive measure.

Question 5

Ms. Edwards is enrolled in a Medicare Advantage plan that includes prescription drug plan (PDP) coverage. She is traveling and wishes to fill two of the prescriptions that she has lost. How would you advise her?

She may fill prescriptions for covered drugs at non-network pharmacies, but likely at a higher cost than paid at an in-network pharmacy.

She may fill both prescriptions and they will be fully covered at in-network pricing since she is traveling.

She may fill one prescription out-of-network per year, and it will be fully covered. Her second prescription will require her to pay the full cost out-of-pocket.

She should wait to fill her prescriptions until she is back home since only her local pharmacy is likely to be in her plan’s network

Question 6

Mr. Jacob understands that there is a standard Medicare Part D prescription drug benefit, but when he looks at information on various plans available in his area, he sees a wide range in what they charge for deductibles, premiums, and cost sharing. How can you explain this to him?

The government bases its payments to Part D plans on the standard benefit model. For Part D plans to receive the full government payment, they must offer the standard model, however, they can take a risk and revise their benefit structure to attract more beneficiaries.

Medicare Part D drug plans may have different benefit structures, but on average, they must all be at least as good as the standard model established by the government.

The Part D standard model’s importance is that it is the only type of plan into which low-income beneficiaries can enroll and still receive any extra help for which they may qualify.

The government allows Part D plans to adopt any benefit structure as long as the list of covered drugs meets their approval.

Question 7

Mr. Hildalgo complains to you that because he takes multiple expensive drugs, he has trouble paying his cost sharing for his prescription drugs, particularly at the beginning of the year during the deductible phase. He is happy with his plan and does not want to change. However, he said he had heard about a new program called the Medicare Prescription Payment Plan and asked whether it might help. What do you tell him?

The Medicare Prescription Payment Plan helps spread out beneficiary cost-sharing payments but does not decrease the total amount owed.

Mr. Hildalgo is not eligible for the Medicare Prescription Payment plan because his income is too high.

Beneficiaries must also be receiving a low-income subsidy to opt into the Medicare Prescription Payment Plan.

The Medicare Prescription Payment Plan will save beneficiaries half of their cost-sharing amounts on an annual basis.

Question 8

Mrs. Roswell is a new Medicare beneficiary who has just retired from retail work. She is interested in selecting a Medicare Part D prescription drug plan. She takes several medications and is concerned that she has not been able to identify a plan that covers all of her medications. She does not want to make an abrupt change to new drugs that would be covered and asks what she should do. What should you tell her?

Every Part D drug plan is required to cover a single one-month fill of her existing medications sometime during a 90-day transition period.

The Medicare Part D drug plan is required to offer her coverage of the same drugs that she is currently stabilized on, so she does not need to be concerned about transitioning to any new medications.

She should use an existing prescription drug coverage to get as large a supply of her existing drugs as possible, and then personally pick new drugs that are covered under her Medicare plan’s formulary.

There is no possibility of obtaining coverage for her existing medications once coverage under the Medicare Part D plan begins. She will need to have her physician help her select a new drug that is covered.

Question 9

Mrs. Mulcahy, age 65, is concerned that she may not qualify for enrollment in a Medicare prescription drug plan because, although she is entitled to Part A, she is not enrolled under Medicare Part B. What should you tell her?

As long as Mrs. Mulcahy is 65, eligibility for a Medicare prescription drug plan is not dependent on entitlement to Part A or enrollment under Part B, so she should not be concerned.

An individual who is entitled to Part A or enrolled under Part B is eligible to enroll in a Medicare prescription drug plan. As long as Mrs. Mulcahy is entitled to Part A, she does not need to enroll under Part B before enrolling in a prescription drug plan.

To qualify for enrollment into a Medicare prescription drug plan, Mrs. Mulcahy must be entitled to Part A and enrolled under Part B. She should contact her local Social Security office and decide to enroll in Part B before selecting a prescription drug plan.

Like all Medicare beneficiaries, Mrs. Mulcahy will be automatically enrolled in a Medicare prescription drug plan when she turns 65. She will have a six-month window during which she can select a plan other than the one into which she has been automatically enrolled.

Question 10

What types of tools can Medicare Part D prescription drug plans use that affect the way their enrollees can access medications?

Part D plans may use varying co-payments for brand name and generic drugs, but they may not restrict access through prior authorization.

Part D plans may use varying co-payments, but they are required to cover all prescription medications on the market.

Part D plans do not have to cover all medications. As a result, their formularies, or lists of covered drugs, will vary from plan to plan. In addition, they can use cost containment techniques such as tiered co-payments and step therapy.

The Federal government establishes a set formulary, or list of covered drugs, each year that the Part D plans must use. Beneficiaries should consult the government’s list before deciding whether they wish to enroll in a Part D plan during that year.

Question 11

Mr. Carlini has heard that Medicare prescription drug plans are only offered through private companies under a program known as Medicare Advantage (MA), not by the government. He likes Original Medicare and does not want to sign up for an MA product, but he also wants prescription drug coverage. What should you tell him?

Mr. Carlini can keep Original Medicare, but if he does not sign up for an MA plan that includes prescription drug coverage, he will only be able to obtain prescription drug coverage through a Medigap plan.

Mr. Carlini can obtain drug coverage through the Federal government’s fallback plans, which are designed to provide an alternative to privately sponsored Medicare Advantage plans.

To obtain prescription drug coverage, Mr. Carlini must enroll in an MA plan. The plan will cover his Part A and Part B services, as well as provide him with the desired prescription drug coverage.

Mr. Carlini can stay with Original Medicare and also enroll in a Medicare prescription drug plan through a private company that has contracted with the government to provide only such drug coverage to eligible Medicare beneficiaries.

Question 12

Mr. Hutchinson has drug coverage through his former employer’s retiree plan. He is concerned about the Part D premium penalty if he does not enroll in a Medicare prescription drug plan, but does not want to purchase extra coverage that he will not need. What should you tell him?

If the drug coverage he has is not expected to pay, on average, at least as much as Medicare’s standard Part D coverage expects to pay, then he will need to enroll in Medicare Part D during his initial eligibility period to avoid the late enrollment penalty.

He will need to enroll in a Medicare prescription drug plan upon becoming eligible for the program in order to avoid a premium penalty. To reduce his expenses, he should look for a plan with a zero premium.

If he has any sort of employer coverage, regardless of the level of coverage, he will incur no penalty if he does not enroll in a Part D plan when first eligible.

He should drop the employer coverage and enroll in a Medicare prescription drug plan. Employer plans are almost always more costly for beneficiaries and most do not cover the same range of drugs available from a Medicare prescription drug plan.

Question 13

Mr. Bickford did not quite qualify for the extra help low-income subsidy under the Medicare Part D Prescription Drug program and he is wondering if there is any other option he has for obtaining help with his considerable drug costs. What should you tell him?

He should look into the possibility of purchasing his medications through the internet from off-shore pharmacies.

He could check with the manufacturers of his medications to see if they offer an assistance program to help people with limited means to obtain the medications they need. Alternatively, he could check to see whether his state has a pharmacy assistance program to help him with his expenses.

He should contact his neighbors and family members and let them know that any contributions they make toward his drug expenses will be tax deductible.

The only option available is to reduce his income so that he can qualify for the Part D extra help or wait until next year to see if the annual limits change.

Question 14

Mr. Wingate is a newly enrolled Medicare Part D beneficiary and one of your clients. In addition to drugs on his plan’s formulary, he takes several other medications. These include a prescription drug not on his plan’s formulary, over-the-counter medications for colds and allergies, vitamins, and drugs from an Internet-based Canadian pharmacy to promote hair growth and reduce joint swelling. His neighbor recently told him about a concept called TrOOP and he asks you if any of his other medications could count toward TrOOP should he ever reach the Part D catastrophic limit. What should you say.

None of the costs of Mr. Wingate’s other medications would currently count toward TrOOP but he may wish to ask his plan for an exception to cover the prescription, not on its formulary.

The cost of all medications bought within the United States not covered by his plan would count toward TrOOP. The cost of the Canadian-bought medications would not count toward TrOOP.

The cost of the prescription drug that is not on his plan’s formulary will count toward TrOOP but the other medications in question will not count toward TrOOP.

The cost of the prescription drugs that are not on his plan’s formulary, as well as the cost of the drug(s) to reduce joint swelling from the Canadian pharmacy, will count toward TrOOP but the other medications in question will not count toward TrOOP.

Question 15

Mrs. Lopez is enrolled in a cost plan for her Medicare benefits. She has recently lost creditable coverage previously available through her husband’s employer. She is interested in enrolling in a Medicare Part D prescription drug plan (PDP). What should you tell her?

If a Part D benefit is offered through her plan she must enroll in this plan.

Mrs. Lopez must first seek COBRA benefits under her husband’s plan before she can apply for Part D coverage.

If a Part D benefit is offered through her plan she may choose to enroll in that plan or a standalone PDP.

Mrs. Lopez must enroll in either a HMO or PPO Medicare Advantage plan in order to obtain Part D coverage.

Question 16

Mr. Shapiro gets by on a very small amount of fixed income. He has heard there may be extra help paying for Part D prescription drugs for Medicare beneficiaries with limited income. He wants to know whether he might qualify. What should you tell him?

The government pays a per-beneficiary dollar amount to the Medicare Part D prescription drug plans, to offset premiums for their low-income enrollees in accordance with the plan’s set criteria. Mr. Shapiro should check with his plan to see if he qualifies.

The extra help is available to beneficiaries whose income and assets do not exceed annual limits specified by the government.

The extra help is available only to Medicare beneficiaries who are enrolled in Medicaid. He should apply for coverage under his state’s Medicaid program to access the extra help with his drug costs.

He must apply for the extra help at the same time he applies for enrollment in a Part D plan. If he misses this opportunity, he will not be able to apply for the extra help again until the next annual enrollment period.

Question 17

Mr. Torres has a small savings account. He would like to pay for his monthly Part D premiums with an automatic monthly withdrawal from his savings account until it is exhausted, and then have his premiums withheld from his Social Security check. What should you tell him?

During 2017, many people experienced significant problems with deductions from their Social Security check for their Part D premium. As a result, this method of payment is no longer an option for Part D premium payments.

In general, he must select a single Part D premium payment mechanism that will be used throughout the year.

In general, to pay his Part D premium, he only can have automatic withdrawals made from a checking account, so he will need to transfer the funds prior to beginning such withdrawals.

As long as he fills out the paperwork to begin withholding from his Social Security check at least 63 days before such withholding should begin, he can change his method of Part D premium payment and withholding will begin the month after his savings account is exhausted.

Question 18

Mrs. Hernandez is one of your clients. She has read that there is a new program that may help her manage prescription drug costs. What do you tell her about the Medicare Prescription Payment Plan?

Opting into the Medicare Prescription Payment Plan will impact what counts toward their true out-of-pocket (TrOOP) costs.

Part D enrollees who choose to participate in the Medicare Prescription Payment Plan pay 25 percent of their drug costs at the point of service and the remainder during the rest of the plan year.

Part D enrollees must opt into the Medicare Prescription Payment Plan at the beginning of the year.

Part D enrollees can opt into the Medicare Prescription Payment Plan at the beginning of the plan year or any point during the year.

Question 19

Mrs. Allen has a rare condition for which two different brand name drugs are the only available treatment. She is concerned that since no generic prescription drug is available and these drugs are very high cost, she will not be able to find a Medicare Part D prescription drug plan that covers either one of them. What should you tell her?

When medication costs exceed a certain threshold amount, which rises each year, a Medicare prescription drug plan is permitted to exclude coverage for all but the least expensive of the medications in a given category. Mrs. Allen will need to encourage her physician to prescribe the least expensive of the two alternatives.

Medicare prescription drug plans are required to include only a certain percentage of brand name drugs among those they cover. It may be possible that plans available in her area have opted not to include in their formularies the brand name drugs she needs. She may need to pay for this particular medication out of pocket.

Medicare prescription drug plans are allowed to restrict their coverage to generic drugs. She will need to pay for her brand name medications out of pocket.

Medicare prescription drug plans are required to cover drugs in each therapeutic category. She should be able to enroll in a Medicare prescription drug plan that covers the medications she needs.

Question 20

Mr. Rice is 68, actively working, and has coverage for medical services and medications through his employer’s group health plan. He is entitled to premium free Part A and thinking of enrolling in Part B and switching to an MA-PD because he is paying a very large part of his group coverage premium, and it does not provide coverage for a number of his medications. Which of the following is NOT a consideration when making the change?

If Mr. Rice is eligible for the low-income subsidy, it will substantially decrease the cost of drugs and the premium for the Part D portion of his coverage.

If his drug coverage through the employer plan is not creditable, his premium for Part D will be increased by the late enrollment penalty, unless he is eligible for the low-income subsidy.

Mr. Rice’s retiree plan is required to take him back if, within 63 days of having voluntarily quit the employer’s plan, he decides that he prefers it to his Medicare Part D plan.

If Mr. Rice drops his coverage through the employer group plan, he may not be able to get it back.

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