There are many compelling reasons for you to annually evaluate your Medicare Advantage Plan that contains drug coverage, or your stand-alone prescription drug plan. If you need to shop around for a Medicare Part D Plan in Maryland, Delaware, Pennsylvania, Virginia, or North Carolina, the licensed expert agents at Elite Senior Insurance can help you with that decision process.
Waiting or Ignoring Drug Coverage May Cost You!
One of the most compelling reasons to evaluate is the complexity of drug coverage. This is known as Medicare Part D coverage. Medicare Part D can be purchased as part of a Medicare Advantage Plan, or in conjunction with a Medicare Supplement Plan.
If you read my blog post on the Medicare Advantage MSA, you will understand that although the MSA is a version of the Medicare Advantage world (not Medicare Supplement), you have to purchase a stand-alone Medicare Part D Plan to work with your Medicare Advantage MSA Plan.
As a reminder, you have to have prescription drug coverage when on Medicare unless you have what’s deemed as “qualifying coverage” from an alternative plan, such as a group health plan. If you do not get a prescription drug plan when you’re eligible, you will face future penalties that stay in place forever. Even if you are not taking any drugs now, you will need to get on a prescription drug plan – otherwise, in the future, if you were to need a prescription it will be far more costly as a result of the penalty.
Why are we taking the time to focus specifically on prescription drugs, when there are many other costs to be considered? The primary reason is that often times prescription drugs will be the most costly part of one’s plan. In addition, these plans can be very complicated, and a lack of knowledge can be financially harmful to you.
It is my hope that this blog will spur you to action, and you will take the time to understand how your current plan is changing and compare your plan to others in your area. Our knowledgeable, experienced agents can help you compare and complete the exercise as efficiently as possible, so you can make the best decision for yourself, your spouse, or loved ones. To find a Medicare insurance agent near you, contact us today or visit our Facebook page.
Why Focus on Medicare Part D Coverage?
Let’s turn our attention to the focus of this blog post: drug coverage. This area is one that I see as the most complicated and consistently changing area of your plan. Here’s why…
- It changes every year
- It can be the most subtle but potentially most costly
- It can be the most complicated part of your plan
- Every insurance company is unique in how they handle drug coverage
- This impacts you regardless of your type of Medicare plan
I’m going to break it down into five features that you should be reviewing, and they are: Premiums, Formularies, Tiers, Cost Sharing, and Low-Income Subsidy (LIS, or Extra Help).
If you are on a Medicare Advantage Plan, do you know your monthly premium, if you have one, is made up of two components: health and drugs? The one most likely to change is the drug portion. There are, generally, plans available that have zero premiums, so you will want to be aware of that if your plan carries one. Premiums can and often do change every year, so if you are still paying a premium, you may want to look into the other plans available in your area.
What’s a formulary? It is, quite simply, a list of the drugs that an insurance carrier will cover from A to Z and to what degree they will cover it. If you are on a drug that is not on the carrier’s formulary, then they do not cover it and you will pay full retail price for that drug.
Formularies can get confusing. Each insurance company is unique with its own formulary. We were recently helping a woman in York County, Pennsylvania, and there were 52 plans to choose from, thus 52 formularies to evaluate. Changes are made annually by every carrier.
New drugs may be added in the coming year and drugs may dropped for the coming year.
Drug Tiers may change, too! This is especially important to compare plans if you are on a brand name or specialty drug. In order to determine if you are making the best financial decision, you are going to want to understand how each company will cover your specific drugs, which takes us to our next feature.
As we just reviewed, every insurance carrier has a unique formulary, which are then segmented into tiers. For most carriers they are Tiers 1 through 5. Tier 1 is generally your preferred generic drugs that have been around for a while and are the least expensive. Tier 2 tends to be generic as well but not preferred. Tier 3 is when you start getting into brand name drugs and higher prices. Tier 4 is generally non-preferred brand name drugs, and lastly Tier 5 is specialty drugs.
Here is where it gets more confusing: not only will each carrier have a separate formulary, but companies also often cover the same drug in different tiers within their formulary. Let me give you an example.
A client in North Carolina had three plans to choose from in her county. The exact same drug, one company covered as Tier 2, another as Tier 3, and the last carrier didn’t cover at all. As a result, her projected annual cost for that one drug ranged from $700 to over $7,000 annually. There is likely no other aspect of your plan that will knowingly be more financially impactful than drug coverage.
You may also have a drug that is carried this year and its formulary tier gets changed by your existing carrier, so you may be in for a surprise when you refill that prescription in the new year if you haven’t done the research.
4. Cost Sharing
Every company sets their own level of cost sharing, expressed as either a co-pay or co-insurance, and they will likely change annually. Once again, complications set in. Co-pay or co-insurance are set again by tier and can be different based upon a pharmacy (preferred or network) and/or by mail order.
It may not seem like much, but if you are on five Tier 1 drugs and one carrier has a zero co-pay for 30-day supply and another has $4, that is $240 per year that you could be saving.
5. Low-Income Subsidy (LIS, or Extra Help)
You may not be aware, but this is a Medicare program that will help you pay for premiums and cost shares, and you will not be subject to the “donut hole” if you are eligible for LIS. There are four different levels of subsidy based upon one’s income level, and we can help you determine if you are eligible for any of them.
Your drug coverage can be an especially complicated to decipher and make informed decisions on. However, don’t worry! That’s why our independent Medicare agents are here to help you with evaluating. Be aware that the analysis needs to go beyond your review of the Annual Notice of Change (ANOC) – this only reviews your current plan changes, not all plans. The ANOC is also a very high-level review and may not even speak to your drugs and if the coverage is changing in any way.
Here at Elite Senior Insurance, we are independent Medicare agents and can help evaluate your drugs quickly across all carriers and simplify this extremely complicated area for you. Don’t spend hours doing your own research! Contact us today online and visit our Facebook page.