Whether you’re new to Medicare or a beneficiary gearing up for the annual open enrollment period from Oct. 15 through Dec. 7, you’ll want to pay special attention to your prescription drug coverage.
Part D is the Medicare benefit that helps pay for prescription drugs and is administered by private insurers. People with Original Medicare (government-administered parts A and B) may purchase a stand-alone Part D plan to help with prescription drug costs.
The majority of Medicare Advantage plans, also administered by private insurance companies, include Medicare Part D prescription drug coverage. People who sign up for Medicare Advantage plans that do not provide Part D coverage may also purchase a stand-alone Part D plan.
In any case, it’s important to know the medicines that are covered and understand how the costs you pay for those medicines can vary from plan to plan.
What Medicare Part D covers
Medicare drug plans cover generic and brand-name drugs. All plans must meet a standard level of coverage set by Medicare. This means they must all cover the same categories of drugs, such as asthma or diabetes medicines, but plans can choose which specific drugs are covered in each drug category.
Each Medicare Part D plan lists the drugs it covers in what’s called a formulary. A specific formulary may not include your medicine but may include a similar option. You may want to consult with your doctor before your plan search to see what alternative medicines are feasible for you.
Like formularies, the cost of your drugs can vary from plan to plan depending on copays, tiered pricing and various restrictions discussed below. It’s important to research your coverage options thoroughly to find the plan that best fits your medical needs and your budget. “So often people just stick with the coverage they have even when there may be better, less expensive alternatives out there,” says Sue Greeno, advocate at the Center for Medicare Advocacy. These five steps can help you with your search.
1. Stay up to date with your current plan
Each year by early October, your plan will send you an Annual Notice of Change. This is also available on your insurer’s website. Greeno recommends everyone read this document carefully and check for the following critical information:Changes in the drug formulary
Just because your Part D plan covers your medicines now doesn’t mean it will next year. Formularies change often. Check the Annual Notice of Change to determine if your insurer is dropping, substituting or restricting any of your prescription drugs.Changes in cost
Check to see if your plan is making any changes in the cost of the drugs it covers. Copays, coinsurance and deductibles can all change. Most plans have tiered copays, charging more for brand-name drugs than generics, for example. Check if any of the medicines you are taking have changed tiers and how that will affect your out-of-pocket costs.
If you have any questions about the Annual Notice of Change, contact your insurer directly.
2. Use the Medicare.gov Plan Finder
Because plans can change each year and because new plans become available each year, it makes sense to shop for the best Part D coverage for you during each annual Medicare open enrollment period.
The Medicare.gov Plan Finder can help. The Centers for Medicare & Medicaid Services has added new features in the Plan Finder tool that make it easier to determine if your medicines are covered, what pharmacies are in network near you and what your total out-of-pocket costs will be including copays and deductibles.
These pro tips can help you navigate the Plan Finder:Enter your drugs
Whether you’re searching stand-alone Part D plans or Medicare Advantage plans (or both), the Plan Finder tool allows you to enter each of your medicines. If you have a My Medicare account, the drugs you have already entered will be entered again automatically.
When the list of available plans pops up, it will automatically sort your options in order of lowest to highest total drug costs including premiums. You can search within the plans that come up in your search to see if your drugs are covered and at what price.
Note: Just because you enter the drugs you are taking doesn’t mean that the plans that appear in the search necessarily cover all of them. You need to dig deeper into the search results to confirm that your medicines are covered in each of the plans in your search.Choose your pharmacies
When you enter your medicines, you’ll also be asked to search for up to five pharmacies nearby. You can include mail order as one of your options. The tool allows you to search pharmacies by name, but it will also automatically provide a list of nearby in-network pharmacies. An interactive map allows you to check pharmacies farther from you that may offer lower prices. Drug copays can vary significantly from pharmacy to pharmacy, so you’ll want to take advantage of this tool, Greeno says.Compare Part D vs. Medicare Advantage
You can use the link at the top of your Plan Finder page to toggle back and forth between stand-alone Part D coverage and Medicare Advantage Part D coverage in your area. This makes it easier to compare Original Medicare (Part A and Part B) with Part D coverage to Medicare Advantage plans.
Note: Be aware that the premium and deductible numbers you see on the Medicare Advantage link relate only to drug coverage. These numbers do not include the premiums or deductibles for general health care, which are listed separately.Check for pricing tiers
Many plans have tiered pricing, charging more in copays for brand-name drugs and still more for categories of expensive drugs. There are also tiers for special needs drugs and the new, less expensive pricing implemented for diabetes drugs. Tiers and costs for different types of drugs vary from plan to plan.
The tier system may enter into your price decision. If you take only generics with very low copays that don’t count toward your deductible, you may decide a low-premium, high-deductible plan is the most affordable option. Someone with expensive out-of-pocket prescription drug needs, however, may well opt for the lower deductible, slightly higher premium plan.
3. Look for other restrictions
In addition to tiered pricing, prescription drug coverage may come with other restrictions.Coverage caps
Some plans have coverage caps, or limits on how many pills of a certain medicine they’ll pay for each month and other volume restrictions. In most cases, this works fine. But some patients may find this restriction eliminates the less expensive bulk mail-order option.Step therapy
In 2019, Medicare Advantage plans were allowed to implement “step therapy.” With this strategy, patients must try cheaper medicines first before they are allowed to move to costlier drugs.
For many patients, lifestyle changes or less expensive but equally effective medicines can work as well as costlier therapies. But in other cases, step therapy can be a delay in getting the acute care a patient needs. That’s why it’s important to understand when step therapy is part of your plan.
4. Understand the exemption process
Many times patients will undergo an unexpected health change well into the calendar year that changes their prescription drug needs, which may include a medication not on their plan’s formulary. In other cases, patients may find a covered drug becomes ineffective, and they need to switch to a more expensive version or one that isn’t included in their plan’s formulary.
In these cases, with the help of their doctors, enrollees can file for an exemption. “In most cases insurers will grant the exemption,” Greeno says. But it is another hoop patients have to go through. Be sure to examine how this process works in the Part D plans you are considering.
5. Ask for help
Even people with modest drug needs can find comparing the various options challenging. You can get help with the process through your local State Health Insurance Assistance Program, so find the SHIP nearest you. Or, as Greeno suggests, check with your local senior center for help. Often staff can assist in open enrollment questions or will know a good resource. And, of course, keep in mind that all of these connections are virtual for the time being due to COVID-19.