The cost of prescription medications continues to rise, putting pressure on limited or fixed incomes — and the savings — of retirees. Part D prescription plans can help take the sting out of the cost of medications, but there are some things every retiree should know about their coverage.

1 – Expensive Prescriptions are Covered

Once you’re enrolled in a Part D prescription plan, the plan can’t cancel your coverage if you are prescribed an expensive medication. Newer specialized drugs can have retail costs of thousands of dollars per year, a cost that can be crippling to retirees, but your plan is obligated to pay its share according to its contract. Additionally, if you move to another state, a Medicare Part D prescription plan can’t refuse coverage based on your health needs or prescriptions.

2 – The Cost of Your Plan Won’t Change During the Year

If the cost of your medications has increased or even if you’ve been prescribed new medications, the monthly cost of your plan is fixed within that plan year. A plan year is from January 1 to December 31 and your monthly costs are guaranteed during this time. However, if your plan includes cost-sharing, wherein you pay a percentage of prescription costs, your cost-sharing amount can change if the cost of the medication changes.

Using a preferred pharmacy maximizes your cost-sharing savings because the plan pays a higher percentage of the cost.

3 – Prescription Medications may be Less Expensive Without Your Plan

In some cases, particularly with generics, prescription medications can be purchased without a plan for less money. Pharmacy benefit managers negotiate the prices of prescription medications — but the focus is often on name brand drugs, making pricing for generic equivalents more unpredictable when purchased using a Part D prescription plan.

While some prescription medications may be less expensive without your plan, there may also be some hidden costs. If you don’t use your plan and pay cash to save money, in many cases, insurers won’t let you apply those cash purchases to your deductible or out-of-pocket spending maximum. Because medication prices aren’t negotiated by a benefit manager, prices can also fluctuate wildly from month to month when paying cash.

Buying prescriptions without a plan can be a costly experience in some cases — and potentially cost-saving in others. With most retirees purchasing a number of specialized prescriptions, overall, Part D prescription plans can save a considerable amount of money for most retired households.

Another caution to buying medications with cash is that pharmacists may not catch potential dangerous drug interactions without knowing your other prescriptions.

4 –  If Your Medication is No Longer Covered by Your 2018 Medicare Part D plan, You Have Some Options

If one of your medications is no longer covered by your 2018 Medicare Part D plan, you can ask for a one-time transition fill or a 30 day supply. You can use this time to consult with your physician about a replacement or generic equivalent that will be covered by your plan. If an alternative medication isn’t available, you can file an exception request — but in most cases, an covered alternative or generic can be prescribed instead.

5 – If You Change Plans, You Can Use The Same Pharmacy

Changing Medicare Part D prescription plans doesn’t have to change your life. If your existing pharmacy is a network pharmacy in the new plan, your prescriptions should transfer over without event. However, if your pharmacy isn’t a preferred network pharmacy, you may have higher cost-sharing rate when filling your prescriptions.

With the cost of prescription medications going up each year, a Part D prescription plan can be a powerful tool to help manage healthcare costs. Rules and provisions can seem complex, but our trained specialists can help simplify the benefits in a way that’s easy to understand. If you have questions or want to learn more about Medicare Part D prescription plans, please contact us. We’re here to help.

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