The high cost of prescription drugs can make you want to skip taking them when needed. While Medicare Parts A and B can cover your hospital stay and doctor’s office visits, these do not cover your drug costs (except during hospitalization or for certain vaccines). Insulin costs for diabetes – one of the most common chronic health disorders in the US – average between $25-$100 per vial. Medicare Advantage plans also vary hugely as far as coverage for prescription drugs. Among all of your Medicare choices upon enrollment, one of the most complicated is picking the right Medicare prescription drug coverage for your needs.
Described below are some ways to determine the best options under Medicare to obtain coverage for your prescription medications.
Your Health Issues – Estimating Your Annual Prescription Drug Costs
If your health is excellent and you take no prescription drugs, you may incur a higher monthly Medicare Part D (prescription drug plan) cost than you would pay “out-of-pocket” for occasional medications. The reason this could happen is that the annual deductible of any Part D plan has to be met before coverage begins – so your once-per-year, seven-day course of an antibiotic for a sinus infection may cost less than the Part D annual deductible (plus monthly premium and co-pay) for that generic antibiotic.
However, most people after age 64 take at least one prescription medication on a regular basis. According to the Centers for Disease Control (CDC), the three most commonly-prescribed medications in the US are:
Depending upon whether you need to take a brand-name drug or can take a generic form, your cost for that specific drug can be quite high to relatively low. An American Cancer Society report noted that more than 15.5 million people in the US were living with cancer as of 2016. Eleven of the 12 cancer drugs approved by the FDA in 2012 alone cost at least $100,000 annually for patients who required them.
If you know that you have a family history of cancer, ensuring that your Medicare coverage is inclusive of prescription drugs is generally recommended.
What are Medicare Part D Formularies?
Medicare Part D is offered by private insurers, so each sets their own formulary – the specific drugs covered under their Medicare Part D plan. Therefore, it is crucial that you check whether your prescription medication is actually covered under the plan you choose. (This is because – after enrollment in Part D – you can only change your Part D plan during Medicare’s “annual enrollment period.) There are also often “tiers” linked to each prescription drug such that the drugs in higher tiers are more expensive than those categorized in the lower tiers.
Medicare Advantage and Medication Coverage
Instead of enrolling in Original Medicare, you may prefer a Medicare Advantage (Plan C) plan. While the Centers for Medicare and Medicaid Services (CMS) requires people in Medicare Advantage plans to also enroll in Original Medicare’s Part B, you cannot enroll in Part D if you are enrolled in Plan C. For this reason, it is vital that you make sure – if you cannot pay for medications “out-of-pocket” – that your Medicare Advantage plan actually covers medications.
While most Medicare Advantage plans do cover medications, they also utilize formularies and tiers similar to Original Medicare (which means that your medications may cost a different amount depending upon your coverage terms).
Deductibles, Premiums, and Co-Pays – Understanding Your Real Costs
It can be difficult to calculate by yourself how each Part D or Medicare Advantage plan’s baseline costs in tandem with your medication needs will affect your finances. Making a side-by-side assessment to compare the “pros” and “cons” of each can give you a better sense of your probable “out-of-pocket” annual prescription drug coverage costs.
At Life First Financial & Insurance, we want you to be able to enjoy your senior years without going into debt to pay for your prescription medication coverage as a Medicare enrollee. Let us help you consider your best Medicare drug coverage options.