How to get the most out of a drug plan
Take a peek inside your medicine cabinet. Chances are there’s more than a pain reliever or fever reducer in there. Most older adults — 9 out of 10 — take at least one prescription medication, according to the Centers for Disease Control and Prevention (CDC). But many don’t fully understand how insurance coverage works for prescriptions — a gap that could get in the way of using medications safely, effectively, and affordably.
Consider this: Thirty percent of older adults said that Medicare was somewhat or very difficult to understand, according to a 2018 Centers for Medicare & Medicaid Services survey. Other recent surveys show that many Americans struggle to define basic health insurance terms — deductible, copay, coinsurance and out-of-pocket maximum — that play major roles in determining their personal health care costs.
Understanding and making the most of prescription drug coverage can help you stay on track with your medications. That’s important for managing health conditions and staying healthy.
1. It may be easy to check prescription coverage
It’s important to know whether a health plan covers the medications you take — and whether you and your doctor will have to take extra steps so that they are covered. Or consider alternative medications.
The plan has a list of covered medications, also called a formulary or a drug list. The drug list includes the generic and brand names of all covered medications. If your drug is not on the list, there is generally another option that treats the same health condition. It’s wise to check the updated drug list every year for changes that will affect you.
2. There may be extra steps for coverage
Some medicines have limits or require extra steps before they can be filled. On the drug list, you might see codes listed that detail any restrictions that apply to your medications. Common codes include:
PA: Prior authorization. You or your health care provider need prior approval for a drug, to make sure it is being used correctly for your health condition.
ST: Step therapy. You may be required to use another effective, lower-cost medication for your condition first.
QL: Quantity limit. The plan may limit the amount of a drug you can fill at one time to ensure that it is used safely and effectively.
If your drug has one of these requirements or limits, you can call the health plan customer service for assistance to help you get your needed medication.
3. Why the price may change
The amount you’ll pay out of pocket for a medication depends on many factors, such as the drug’s cost-sharing tier, the drug coverage stage you are in, and if you receive Extra Help from Medicare.
Learn more about the cost of your medications by taking these steps:
Step 1: Know the drug tier
On the plan, medications are assigned to a tier. The tier tells you what your copay (a set price) or coinsurance (a percentage of the total price) will be. Generally, the lower the drug tier, the lower the amount you pay. Tier information is found on your plan’s drug list.
Step 2: Know the coverage stage
Medicare Part D prescription drug plans have a yearly cycle of coverage stages that affect a drug’s price:
- Yearly deductible stage: If the plan has a deductible (some prescription drug plans or drug tiers do not), this is your first stage of the year. You pay the full retail price for your drugs until you reach the deductible amount. The deductible may not apply to all drug tiers.
- Initial coverage stage: In this stage, you pay a copay or coinsurance for your drug, and the plan covers the rest. If the plan has a prescription drug deductible, you enter the Initial Coverage Stage after you’ve met the deductible. If the plan does not have a deductible, you begin the year in this stage. The Initial Coverage Stage continues until your total drug costs (your payments plus the amount paid by the plan) reach $4,660 in 2023.
- Coverage gap (“donut hole”) stage: You pay 25% of the cost of generic and brand-name drugs, until your total out-of-pocket costs for the year reach $7,400 in 2023.
- Catastrophic coverage stage: You pay a low copay or coinsurance for the rest of the year.
If you get Extra Help from Medicare to pay for prescription drugs, your costs and coverage stages will be different. Refer to the low income subsidy (LIS) rider for more information.
Have concerns about paying for your medicines? Ask your health care provider about switching to lower-tier drugs.
4. You have options for filling prescriptions
The plan covers prescriptions filled at a network retail pharmacy. Or you can set up home delivery.
If you decide to go to a neighborhood pharmacy, there are thousands of national and independent pharmacies in your plan’s network. Find a network pharmacy on the plan’s website or call the customer service number on the member ID card to find the one that’s most convenient for you. Except in some emergencies, medications may not be covered at pharmacies that are not in your network.
If you take more than one medication on a regular basis, your health care provider or pharmacist can help you simplify refills. Options include changing your refill dates so that several drugs can be refilled at the same time or switching to a 3-month supply from your pharmacy. You may make fewer trips to the pharmacy and have less to keep track of on your own.
5. You can give a trusted person access to the plan
Sharing access with someone you trust is a smart strategy for understanding the prescription drug plan. To authorize your spouse or another trusted person to speak with the plan about your account, fill out an Authorized Representative form or call Customer Service.