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Each year, when the Medicare Annual Election Period approaches, seniors are hit by thousands of television and radio ads. They get a mailbox full of solicitations. Astoundingly, only 13% of Medicare beneficiaries choose to enroll in a new prescription drug plan each year, according to the Kaiser Family Foundation. It seems that evaluating plans each year is an exhausting task. When it comes to an annual review of Medicare drug plan costs, many people just let it slide.
However, taking the time to review your options can result in significant savings on medication costs next year. Here are some tried and true tips for analyzing your drug plan to see if savings for next year might exist. Lower your Medicare drug plan costs with these tips.
Medicare beneficiaries can get an annual wellness exam (at no charge). This is an excellent time to also review any medications you are taking. Decide with your doctor whether these medicines are still the right combination for you.
New medications emerge into the marketplace, and older drugs have patents that expire. There may be new, less expensive alternatives that you can consider to lower your Part D costs. Make a list of your medications, and come prepared to discuss each of them during your wellness visit.
While you are there, ask your doctor if he has any samples for your brand-name medications. Even a one-month supply can save you a few hundred dollars per year if your medication is an expensive one.
Each year there are prescription medications that the FDA approves for over-the-counter (OTC) sale. When this happens, some Part D drug plans may stop covering the prescribed version of the medication. Not long ago, Nexium, the popular purple pill for heartburn relief, had a retail rate of over $140 in some pharmacies. Even with coverage, many beneficiaries found themselves shelling out $40 copays for the medicine and paying more than 50% of that cost if they fell into the coverage gap.
In April 2014, the Food and Drug Administration approved Nexium 24-hour as an OTC medication. You can now buy a 42-count bottle of the little purple pill for less than $17 on Amazon.
Buying the OTC version of a medication also helps you keep your total Medicare drug plan costs down, so it can help some people to stay out of the coverage gap on their Part D plan, too.
Most Medicare Part D plans offer a mail-order service.
Mail-order pharmacy services have both pros and cons. Though, for most Medicare beneficiaries that use the service, the pros seem to outweigh the downside.
Almost all Medicare Part D plans include a mail-order option, and some even offer lower copayments for prescriptions compared to the copay at a brick-and-mortar pharmacy.
Along with savings, many of our clients enjoy the convenience of being able to get a 90-day supply of their medication versus the 30-day supply they would receive at a local walk-in pharmacy.
The main thing to keep in mind with mail-order is the time it will take to get your medications to your door. You can work with your mail-order pharmacy to ensure the timing is just right so that there is never a time between orders that you are left without medication. It is still a good idea to have a backup plan or know which local pharmacy is preferred by your plan.
A few years ago, many Part D drug plans waived the annual deductible so that you would get your drug copays right from day one. As costs have risen, more drug plans have started to implement the Part D deductible into their plan designs.
While the idea of a deductible doesn’t sound fun, we find that many times a plan with a deductible works out to be cheaper annually. This is because plans with deductibles often have lower monthly premiums and sometimes lower copays on medications after the deductible. A careful analysis of your medication list often will tell you whether a plan with an up-front deductible is the most cost-effective.
How do you determine whether this is the case for you? Medicare’s own website has a handy Part D Prescription Drug Finder tool. Enter your medications and your preferred pharmacies, and Medicare’s site will do all the work. It ranks each drug plan according to which one has the lowest overall annual out-of-pocket costs for you. If a drug plan with a deductible appears in the top spot, you can be sure that plan will save you money over a competitor’s plan that waives the deductible.
Many plans these days use preferred pharmacy networks. If your plan has a network like this, you may be paying more for your drugs at non-preferred pharmacies without even realizing it. Check your plan documents to find out which pharmacies, if any, participate in the plan’s preferred network. Switch pharmacies if you determine it will save you money. While these savings may be small for people with only one or two medications, they can be significant if you take a handful or more medications.
For example, if you pay $10 in a preferred pharmacy versus $20 in a non-preferred pharmacy each time you fill a 30-day supply of a medication, you are spending unnecessarily spending $120 a year.
There is no doubt that prescription medications cost Medicare beneficiaries millions of dollars every year. Nonetheless, these costs are far better than before Part D existed prior to 2006. Taking an hour or two each fall to analyze where you can get the most savings will benefit you with extra cash in the long run.
Lastly, if you have a year where prescriptions are expensive, remember that under the Affordable Care Act, the coverage gap is closing. Discounts for drugs in the gap will be deeper with each passing year, and eventually, the gap will close entirely.
Today we have a number of online RX discount companies. Sometimes you can find a coupon for one of your medications that may be cheaper than what you pay for a medication if you are in the donut hole on your plan. It’s always worth a quick look.
Any medications that you can buy cheaply outside of your Part D drug plan will lower your overall Medicare drug plan costs.
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