The most confusing and complicated part of Medicare benefits is the prescription drug coverage. The majority of questions and troubleshooting we agents encounter has to do with understanding prescription drug formularies, copays and preferred pharmacies. Dental coverage is a close second. We will save that one for another blog! Unfortunately, some people think they can just sign up for a Part D plan and go to any pharmacy and pay some minimal copay for their prescriptions. But oh, there is so much more to it. So again, I say here ‘Call an Independent LOCAL agent to assist you.’ But in the meantime, here are some clues to help you decode the Part D Plan features.
Clue #1
Part D Plans or prescription drug coverage can be a stand-alone plan with its own premium OR included in an Advantage Plan (i.e. HMO/PPO). The structure of the plan in terms of coverage phases, formularies, copays and preferred pharmacies work in the same fashion on either side. The differences, however, lie in how the insurance company categorizes each drug into Tiers, assigns copays and develops agreements with pharmacies. In other words, the cost of your drugs will be different depending on which insurance company you choose, what zip code you are in at any given moment, which pharmacy you go to and what month you are in. Sound confusing? Well, it is and so using an Independent Agent, especially one that is local and knows the area is so beneficial. We can pull a plan detail based on your current list of medications, zip code and which pharmacy you like to go to. We can show you how much your prescriptions will cost you each month of the year. Because yes, even that changes! See next section….
Clue #2
The phases: There are four phases of drug coverage with all drug plans. Each phase has a different cost for each drug, and thus your copay changes as you move through the phases throughout the year. Note: All numbers below are as of 2021. These numbers change each year.
Phase 1 – Deductible Phase. Not all plans have this phase, but if they do, they can range from $100 up to a max of $445. If you have a deductible phase in your plan, you will pay a larger amount for your drugs until you reach it. In many plans, only higher ‘Tier’ drugs count towards the deductible. The lower ‘Tier’ drugs essentially ‘skip’ this phase in many plans.
Phase 2 – Initial Coverage Phase. There are copays assigned to the drugs based on their ‘Tiers’ in the plan formulary in this phase. You will have to see the plan detail quoted by your agent to know what the copays are in this phase for your drugs in your area at your pharmacy.
Phase 3 – Coverage Gap Phase. This used to be called the ‘Donut Hole’. You reach this when your combined drug expense and the plan’s cost equal $4,130. At this point the cost of your prescriptions could go up or down depending on the formulary. Most of the time the cost goes up.
Phase 4 – Catastrophic Phase. This occurs when your out-of-pocket cost for your drugs reaches $6,550. In this phase, if you should reach it, the cost is the greater of 5% of the drug cost or $9.20 for a brand name and $3.70 for a generic.
Clue #3
Start crunching the numbers! Get with an agent to help you run your prescriptions through the Medicare Compare quote tool and find the best plans using your preferred pharmacy. We will be able to tell you the cost of each drug each month for the rest of the year (or whole year if it is during Annual Enrollment). Just remember that the costs will likely change every few months for most people depending on what phase you enter at what time of year.
Clue #4
What if I am a ‘Snowbird’? What if I travel for a period out of state and need to get prescription refills? Well, just because our best quote and lowest cost was for CVS near your Indiana residence, for example, does not mean you can just go to a CVS in Florida and get the same price. Again, the agreements with pharmacies and plans vary per zip code! I recently assisted a client to find the best pricing for his wife’s medications while they were in another state. He was surprised to find that the Walgreens near them in Florida was the better price even though the CVS near their Indiana home had the best price.
Conclusion:
And just when you have it all figured out and make it through the end of the year knowing your costs, guess what? The plans CHANGE! Yes, that is right. The plan you are on will likely change all its formularies, tiers, and copays for the next year. The best strategy is to meet with an Independent Agent during Annual Enrollment every year [October 15 through December 7] during which you can make changes for the next year. Agents have access to all the new plan formularies for the next year and can ensure you are always on the best plan. For more information, email me at carrie@cdi-cares.com or check me out on www.cdi-cares.com
“She’s clarity and confusion. Never enough. Always too much. A simple complicated perfectly flawed mess”
o Perry Poetry