Whether you’re new to Medicare or a longtime beneficiary, you’ve probably heard the same advice about prescription drug coverage more than once: always make sure the medicines you need are covered.
But how exactly can you do that? What do you need to know to help compare prescription drug coverage among various Medicare Advantage and Medicare Part D plans?
First a little background. Medicare Part D was started in 2006 to help seniors cover the cost of medicines. Beneficiaries who choose traditional Medicare were then able to sign up and pay premiums for a separate Part D plan, which are administered by private insurers.
Medicare Advantage (Part C) plans are slightly older, also administered by private insurers, and include the same coverage for hospitalization and doctor visits under Medicare Part A and B. Medicare Advantage plans have different payment rates and doctor networks. They can include some additional benefits not found in traditional Medicare – such as dental, vision, and Part D prescription drug coverage.
Almost all Medicare Advantage plans now include Medicare Part D prescription drug benefits. However, the medicines covered under Medicare Advantage plans vary widely from plan to plan. Premiums among Medicare Advantage plans also vary depending on what is covered.
So just how can you tell whether the Medicare Advantage plan you’re considering will take care of the medicines you need? Here’s what to look out for.
Check the Formulary — Then, Check It Again
Each Part D or Medicare Advantage plan has a formulary — a list of medicines that are covered by the private insurance company administering the plan.
You’ll want to make sure that the medicines you currently use are included in the formulary.
You’ll also want to make sure you understand the cost of any copayments you’ll need for your medicines, suggests Flaviu Simihaian, CEO of Troy Medicare, a Medicare Advantage company that focuses on providing comprehensive pharmaceutical coverage. Many plans have tiered copayments, charging more for brand name drugs than generics, for example. Like formularies, co-pays can vary from plan to plan
Look beyond your current plan. If you already have Medicare prescription drug coverage that you like, don’t assume that your plan’s formulary is permanent. These lists change every year. Before Medicare’s Annual Election Period you should receive a notice of plan changes.
Be sure to check this document carefully or call your insurer to determine if your medicines are still covered, says Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging. To help compare pharmaceutical coverage on different Medicare Advantage plans, you can always call a licensed agent for help.
Think about future needs. As you’re going through this process, think about the medicines you might need as well as the ones you’re taking now. If you have an ongoing health concern or condition, talk to your doctor or pharmacist around the time you compare plans to determine what medicines you may need in the future.
Formularies must cover all classes of drugs, but check to see how specific drugs are listed on the formulary of any plan you’re considering. It’s not unusual for Medicare beneficiaries to be prescribed a new medicine during the coverage year that’s outside of their plan’s formulary. That means you’d pay the full cost of the new prescription, or make due with a less appropriate medicine.
Of course, you can’t predict the future. But conversations with your doctor might help illuminate your needs going forward.
Double-check your final choice. Just before you sign up, call your potential insurer and ask for the latest version of the formulary. Insurers can — and do — make changes throughout Medicare Open Enrollment. Best to make sure before you sign up.
Understand Medicare Advantage plans without drug coverage. Some Medicare Advantage plans don’t have Part D benefits included. This doesn’t have as large of an impact as you might expect, since many $0 premium Medicare Advantage plans do include Part D.
These drug-free plans may be a good alternative for folks with no major health issues. If you have existing Part D coverage that you enjoy – either because it addresses a chronic illness or because you simply like the plan – these Medicare Advantage plans without could have comparatively lower out-of-pocket maximums.
Look Into Drug Coverage Limits
Step therapy is here. In a ruling released last summer, the Centers for Medicare and Medicaid Services (CMS) decided to allow Medicare Advantage plans to implement “step therapy” starting in 2019. Under step therapy you must try cheaper medicines first before your insurer pays for costlier drugs.
On the face of it, step therapy makes sense. For many patients, lifestyle changes or less expensive but equally effective medicines can work as well as costlier therapies. But in other cases, step therapy can be a delay in getting the acute care you need.
As Medicare Open Enrollment approaches, you may want to call the Medicare Advantage plans you are considering and ask them 1) if they are implementing step therapy and 2) if so, how that will work. The same advice applies even if you plan to stick to your existing Medicare Advantage plan, says Fried.
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Look for coverage caps. Also, look for other limitations in your drug coverage. Sometimes plans have a cap on how many pills of a certain medicine they’ll pay for each month, or other similar volume restrictions.
Get ready for the 5% rule. Finally, understand you will need to contribute to the cost of your prescription drugs. Brand name drugs sometimes come with hefty copayments. And, although the dreaded donut hole, when Medicare beneficiaries paid total out-of-pocket costs for prescription drugs after a certain limit, has been eliminated, you are still responsible for the so-called catastrophic threshold.
Once you pay more than $5,100 out-of-pocket for your medicines, you hit this catastrophic threshold. From that point on, you pay 5 percent co-insurance for all medicines for life. This may sound reasonable, but it can be particularly burdensome for people with illnesses such as cancer or hepatitis C, that require very expensive drugs to treat.
You Have a While to Change Your Mind
If you’ve opted for a Medicare Advantage plan, you have a longer window during open enrollment to change your mind. Starting in 2018, the government extended the time you can change your Medicare Advantage coverage by about three months, up to March 31. During this period, you’ll be able to switch to either another Medicare Advantage plan or to Original Medicare (Parts A and B) with a standalone Part D prescription drug plan.