Tiers of Sadness...Tiers of Joy: Strategies for Medicare Prescription Drug Plans

By Marc Manor

The plight of those Medicare beneficiaries that take one or more high cost prescription drugs can be challenging; and as with anything in the Medicare Advantage or Prescription Drug Plan (PDP) world, the landscape can be foggy and difficult to sift through to find affordable solutions. Sometimes, it may be possible to save a few dollars if we take the time to research a few variables. Prescription drugs are categorized in “tiers” that relate to the coverage level according to the benefit schedule of each PDP. As a rule, the higher the tier, the more expensive the drugs will be for the consumer (and the plan). I say “as a rule,” because there are some exceptions to the rule if one digs deep enough and searches through several variables.

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Generic vs. Name Brand Drugs

Generic drugs are as a rule (there is that term again!), in the lower tiers and are lower in cost on the benefit schedule than name brands. Ask your doctor if generics will work for you. If so, you can save significant money in most cases. Generic drugs usually contain the same active ingredients as name brand. However, they frequently contain other compounds that bind or coat the drugs. Some patients may have reactions to these other compounds. That is why you should ask your doctor before changing any of your medications.

Plan Formularies

Each PDP or Medicare Advantage Plan with Prescription Drug Coverage (MAPD) has a drug formulary. Each drug is assigned to a formulary and a corresponding “tier”. The benefits of the plan are determined by which tier the drug falls into. Different plans have different formularies and what may be a Tier 1 in one plan could be a Tier 2, or event 3 in a different plan. Find out where your drugs fall in each plan before you enroll.

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Coverage Stages

There are four coverage stages in the Medicare Prescription drug world. They are:

1. Deductible Stage: Deductibles may be drastically different for each plan. Some plans have no deducible while others offer relief from the deductible for Tiers 1, 2 or sometimes 3. The deductible may be a significant factor in how your prescription drug dollars are spent. Make sure you know the deductible before you enroll.
2. Coverage Stage: This is when the benefit schedule of the plan applies as it is straight away. The out-of-pocket costs can be easily determined by looking at your plan materials.
3. Coverage Gap (Donut Hole): This is when the amount applied to each drug purchased reaches a certain limit (for 2019 this is $3820).

   

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   This includes the full cost of the drug; not just what the consumer pays but what the consumer + the plan pays. For example, if a drug costs $100 and you pay a $5 co-pay and the plan pays $95, the entire $100 is applied to the $3820 coverage limit. Discounts are applied for generic and name brand drugs while in the “donut hole” so there is some relief, but this is a huge factor for most people. Once the total expenditures for drugs reach $5100 in 2019, you have reached the high end of the coverage gap (donut hole) and you have reached the catastrophic coverage stage.
4. Catastrophic Coverage Stage: This is when the plan will resume prescription drug coverage, usually at very affordable rates.

Preferred vs. Standard vs. Mail Order Pharmacies

By and large, where you can save the most money is by mail ordering your prescriptions. When authorized, you can get a 90-day supply of your drugs and have them delivered. The issue of preferred vs. standard pharmacies may also save significant dollars for drugs. Each plan has certain pharmacies contracted as “preferred”. If you prefer to make runs to the local pharmacy to pick up your drugs, be sure to do so at a preferred pharmacy and you will no doubt save money.

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I highly recommend using an independent agent always but especially if you are prescribed with multiple drugs. Due diligence on researching which plan meets your needs and save your money could result in “tiers” of joy instead of “tears” of sadness.

Marc Manor is a 30-year military veteran who is now dedicated to teaching his fellow Americans how to make the most of their Medicare and healthcare benefits.  As an independent agent, Marc has access to a wide variety of carriers with an abundance of resources to find tailored solutions.  There is no charge for a consultation so call 904-222-0698 or email: marc@marcmanor.com.