Some of our clients have been asking “How in the world can I now be paying more for my prescription drugs in 2016, when I didn’t change my Part D coverage?” I certainly don’t blame people for being frustrated if you’re living on a fixed income, even a small change in what you have to spend for the drugs you depend on can have a big impact.
There can be a number of things that have changed in your coverage, resulting in increases in what you pay. Here’s a list of possible causes:
The medication you’re using isn’t covered anymore. If your medication has been dropped from your insurance company’s formulary (that’s the list of drugs they cover) because a less expensive generic drug has become available, you’re now paying for that medication in full. You can, however, request a “formulary exception” by contacting your Part D plan provider, and perhaps receive special coverage for that medication.
You purchased your medication at a non -network pharmacy. Insurers negotiate special deals with pharmacies, just like with doctors and hospitals. Make sure you’re buying your drugs at a pharmacy that’s in your network, so you can receive full coverage for it.
You’re still paying for your initial deductible. Remember, every calendar year you have to satisfy your initial deductible. So, you’ll have to pay the full cost of your drugs until you do so, and that amount varies based on the plan that you have.
The plan you have now uses coinsurance to share costs. Lots of plans require that you pay a copayment, which is a fixed amount, of the cost of each prescription. But some require instead that you pay “coinsurance,” which is a percentage of the cost of each prescription. If your plan changed from copayments to coinsurance as a costsharing model, and your prescriptions are relatively expensive, the amount you pay may have increased.
Your medication is now in a different formulary tier. When drugs themselves get more expensive, insurance companies will often move them to a different “tier” in their formulary. Typically, this means that you pay a higher portion of the cost of that drug yourself.
The drugs you use got more expensive and your plan uses coinsurance. If the retail price of a drug you use increased, and your plan requires that you pay uses coinsurance, the amount you pay will increase, since coinsurance is a percentage-based model of cost sharing.
You find yourself in the donut hole. Ah, the infamous donut hole. Once your drugs have cost $3,310, you’ll pay a higher percentage of the costs of your drugs.
You got moved to another plan. Sometimes plans consolidate, and something called “crosswalking” occurs. When your plan merges with another plan, you may be “crosswalked” right into a plan that requires that you shoulder a larger amount of the costs of your prescription drugs.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.