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Money July 2013

Dollar Sense

What You Don’t Know About Medicare Part D Can Cost You

By Teresa Ambord

If your Part D plan offers a preferred network pharmacy and you use it, you could save hundreds of dollars each year on co-pays. But only about one out of four people on Part D know if their plans have a preferred network pharmacy, and even fewer have made the switch. How much could you save on your co-pays? Up to 75%. 

Do you skip doses of prescribed medicines to stretch your money? How about putting off getting your prescriptions filled? A survey by Walgreens pharmacies shows one in five seniors skip doses and delay getting their prescriptions filled to stretch out the cost. It probably won’t surprise you to learn that the most common complaint seniors have about Medicare Part D is the cost.

 

It’s Okay to Switch Pharmacies

Most of the people who took the survey said they had a good understanding of Medicare D. But most of them didn’t know they might be able to pay a smaller co-pay by switching pharmacies. In fact, many didn’t know they could switch drug stores except at open enrollment time. This is false. If you are a Medicare D recipient, you are free to change pharmacies whenever you wish.

Walgreens’ director of pharmacy affairs, Dan Lucy, said “It’s important for everyone to be able to afford the prescriptions they need, and with recent changes to Medicare and other programs under health care reform, it’s critical for beneficiaries to fully understand their options and the ways to make their health care dollars go further. If cost is a contributor to patients not adhering to medication therapies, as the survey findings show, it’s always a concern because non-adherence can be a significant and costly barrier in treating illness. This underscores the need to educate Part D beneficiaries about how they can save on prescription and other health care costs.”

 

Save $$ on Prescriptions

The Walgreens survey also showed:

  • Medicare D beneficiaries take an average of eight prescriptions each week, and spend an average of $58 per month on co-pays.
  • Some pay over $100 per month in co-pays.
  • Most seniors have switched to generic medications to lower their costs, and about four in ten have made another smart move… they are having their prescriptions filled for 90 days at a time.

You should also know, if your Part D plan offers a preferred network pharmacy and you use it, you could save hundreds of dollars each year on co-pays. This seems like a great idea, right? But only about one out of four people on Part D know if their plans have a preferred network pharmacy, and even fewer have made the switch. How much could you save on your co-pays? Up to 75%.

 

What to Do?

If you have concerns about the cost of your prescriptions, Walgreens recommends you have a talk with your pharmacist about how you can pay less for your prescriptions. You should probably also talk to other pharmacists to find out what you would pay for the same prescriptions elsewhere. And don’t forget, you are free to change pharmacies at any time.

 

Do You Understand the Donut Hole?

If you don’t understand that crazy thing called the “donut hole,” you’re not alone. How can something as delightful as a donut be associated with paying for prescription drugs? Admittedly, the name isn’t a good fit.

Part of the confusion about the donut hole happens because Medicare Part D has two separate programs. One is for basic coverage, and the other is for catastrophic coverage. (According to Medicare.gov, once you've spent $4,700 out-of-pocket for the year, you're out of the coverage gap. Once you get out of the coverage gap, you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.) In between, there is a gap called the donut hole. When the maximum benefits you get under basic coverage end and you are not yet covered under catastrophic coverage, you are sitting smack in the middle of the donut hole.

You should know, not all plans have donut holes. Every time you fill a prescription, Medicare should send you an EOB, or Explanation of Benefits. The EOB tells you how much you have spent for covered drugs, whether you are in the donut hole or not, and when you will have to begin paying out of pocket for your medications.

Once you reach the donut hole, you will generally be given a 50 percent discount on your medications from the manufacturer. However, to get that discount you must:

  • Be enrolled in Medicare Part D or Medicare Advantage Part C (which includes drug coverage)
  • And not be part of a program called “Extra Help” (a program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles, and coinsurance).

When you read your EOB, check for errors. If it appears wrong to you, contact your State Health Insurance Assistance Program (also known as SHIP), or call 1-800-MEDICARE.

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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