Medicare Drug Costs
Medications that fall on the higher tiers attract higher coinsurance costs and co-payments compared to those on the lower tiers. Private insurers set their own premiums, so it pays to compare plans in your area to make sure that you’re choosing the right plan for your prescription drug needs
Keep in mind, Medicare prescription drug policies and Medicare Advantage drug plans vary in terms of the particular medications they cover as well as the costs the beneficiary pays. This is despite the prescription drugs being the same.
Medicare drug costs depend on:
- The medications you take, and how frequently you take them
- Whether the pharmacy you go to is within the network of your plan
- Whether your medications are on your Part D’s formulary
- Whether you have chosen the stand-alone Part D Medicare Prescription Drug policy or the Medicare Advantage Drug Plan
- Whether you receive extra help paying your Part D Medicare costs
One major cost that you should consider is the monthly premium. Stand-alone Part D policies and Medicare Advantage policies have a monthly premium. Other than the monthly premiums, you may have to pay an annual deductible and a co-payment/coinsurance.
Medicare Part D Formulary
As mentioned above, each drug policy has its formulary. As a beneficiary, it’s good to check your plan’s formulary to confirm if your drugs are covered. Call our advisors for more information on this! Below are a few examples of what prescriptions are & are not covered.
- Certain vaccines
- Insulin and all the equipment associated with insulin injection (needles, gauze, syringes, and alcohol swabs)
- Prenatal vitamins
Not Covered Prescriptions:
- Drugs for cosmetic purposes
- Medicines for anorexia, weight gain or weight loss
- Drugs meant to relieve colds and coughs
- Medications for erectile dysfunction
- Individual outpatient drugs
- Over-the-counter medications
- Minerals or vitamin drugs except those noted in the formulary
- Fertility drugs
The same formulary drug tier definitions are used on 95% of stand-alone Medicare PDPs and 76% of MAPDs. Medicare plans use these tiers to organize covered prescriptions into cost-sharing groups. Even though these drug plans use the same 5-Tier formulary, each PDP insurance plan individually determines which medications will be placed into what tier groups.
- Preferred Generic
- Preferred Brand
- Non-Preferred Drug
- Specialty Tier
Can My Prescription be Moved to a Lower Cost Tier Group
If one or more of your prescriptions have been moved to a formulary tier that is more expensive, you may be able to contact your plan carrier and ask them to move your prescription to a lower cost tier.
My Medications Co-Payment is Higher than Retail Cost, Will I Pay More if I Use My Medicare PDP
No, between you’re planning co-pay and retail drug cost, you’ll always pay the lesser of the two. If the plans co-pay for your medication is $39 but the negotiated retail cost is $15, you’ll only have to pay the retail cost.
What is the Coverage Gap
Also called the Medicare donut hole, the coverage gap is a short-term limit on what your prescription plan will pay for the covered prescription medications. Every Medicare policy that covers prescription drugs has one, but not everyone enters it.
The probability of you reaching the gap will depend on the particular drugs you take, their costs, dosages, and whether they are generic or brand-name drugs.
You’ll enter the donut hole when you and your plan have spent a specified amount on the covered prescription medications, including the deductible in case your plan has one.
While in the gap, you’ll be responsible for most of the expenses resulting from your prescription drugs until you reach a certain out-of-pocket amount, then catastrophic plan coverage starts, and you’ll be out of the gap.
For more information on the Medicare donut hole click here, or call our team for advice on how to avoid it or how to get out!
What Happens if I Cannot Afford my Prescription Medications
Medicare provides a program known as Extra Help or Low-income Subsidy, to qualified individuals with low incomes. If you’re a member of Medicare and meet the requirements of the program, you may qualify for the “Extra Help.” Those who qualify will get help paying for their Medicare Part D expenses which may include cost sharing, deductibles, and premiums.
You can qualify for the Extra Help if:
- You acquire Supplemental Security Income benefits
- You qualify for Medicare and receive full coverage from a government Medicaid program
- You’re a member of a Medicare Savings Program