Medicare Part D, also called the Medicare prescription drug benefit, is a federal program to help subsidize the high cost of today’s prescription drugs and drug insurance premiums for Medicare beneficiaries. Part D was enacted as part of the Medicare Modernization Act of 2003, and went into effect on January 1, 2006. Since then everyone when they receive Medicare must enroll in a stand-alone Prescription Drug Plan, a Medicare Advantage Plan or have continuing credible drug coverage or they will receive a penalty.
Every year Prescription Drug and Medicare Advantage Plans can and do make changes to their drug formularies. Plans can change their monthly premium, the cost of their drug tiers, drug tier levels and plan deductibles. Your plan will usually renew automatically unless you change it. If you don’t check your 2018 prescription costs before annual open enrollment is over, when you go to pick up your prescriptions after January 1st you could be in for a shock. Last year one of my two prescriptions increased two tier levels which would have cost $45 more a month in drug costs and because of the higher tier level it was now subject to the plan deductible of $400 before the plan would pay anything.
Annually on October 1st we can go on the Medicare.gov website, put in the list of prescriptions we take and see what our costs will be for our prescriptions in 2018. If you did it last year and you saved the date, zip code and drug ID number you can bring up this list you put in last year and make any updates you need to. This year for my same two prescriptions I could pay a total annual amount of $311 on the lowest cost plan to a high of over $2900 on the highest costing plan. Quite a difference, isn’t it? Why such a large spread? The plan premiums, which are part of the annual cost, range from a low of $17.70 to a high of $169.40 per month. On my lowest cost plan, the monthly premium is $22, the prescriptions are in tiers 1 or 2 which causes them not to be subject to the plans $405 annual deductible. When you use mail order on this plan the total 90-day co-pay is only $10. The monthly premium on the most expensive annual plan is $76 a month but the real expense is due to one of the prescriptions not being on the formulary. This causes a beneficiary to pay the full cost of the prescription for the entire year.
I do this annually for each one of my members as part of their no cost annual Medicare Plan review and I would be glad to help you with yours if you give me a call at my office. Let me review some of the basics of most prescription drug plans. Most plans today have between 4 or 5 tiers. Drug tiers can have many different names. In most cases the higher the tier level the more expensive the drug. Plans may have a drug annual deductible of $0-$405 and usually apply to any of your drugs that are in the higher tier levels of 3, 4 or 5. Remember also that a drug might not be listed or was dropped from your formulary which could make it very expensive as in our prior example. Medicare Advantage plan formularies act in much the same way but I will leave that for another day.