Higher prescription drug costs ultimately affect all consumers. Studies have shown that these increased drug costs ultimately result in higher premiums and deductibles.
As a Medicare recipient you may have a limited, fixed income. Also, you may find yourself needing more prescription medications over time. For these reasons, prescription drug costs may have a significant influence on your Medicare coverage decisions.
Many factors can influence what you pay for prescription drugs under Medicare. They include:
- Which prescription drug plan you choose
- How your plan prices different drugs
- Where you get your prescriptions filled
- Whether you choose brand-name or generic drugs
And remember, our team at Connie Health is always available to help you choose the best Medicare prescription drug coverage for your situation.
Medicare Prescription Drug Plans
You can choose between several different options for Medicare prescription drug coverage (Part D).
Original Medicare and Medigap only cover doctor services and hospitalization (parts A & B). You need to purchase a stand-alone Prescription Drug Plan (PDP) from a private insurance company to combine with your Original Medicare coverage.
Medicare Advantage managed care plans may also include Part D prescription drug coverage. Some Medicare Advantage plans, known as Medicare Savings or Cost plans, do not include part D coverage. For these you must also purchase a stand-alone PDP from a private insurance company.
It’s important to enroll for your Medicare drug coverage (as with other Medicare coverage) during your initial enrollment period. This begins 3 months before the month you turn 65 and ends three months after that month.
If you don’t enroll for Medicare Drug coverage during your initial eligibility period you may be subject to an enrollment penalty. You may also have to pay a penalty if, for a continuous period of more than 63 days after your Initial Enrollment Period, you do not have:
- A Medicare Prescription Drug Plan (part D)
- A Medicare Advantage (part C) plan which includes prescription drug coverage
- Creditable prescription drug coverage such as an employer group plan
Prescription Drug Costs
Most Medicare part D or Medicare Advantage plans with drug coverage have a tiered structure to determine what you pay for prescription drugs. This table shows a typical example:
| Tier Level | Drug Type | Description | Cost |
|---|---|---|---|
| TIER 1 | Preferred Generic | Lowest co-payment and mostly generic drugs | $ |
| TIER 2 | Generic | Low co-payment and includes generic and brand name drugs | $$ |
| TIER 3 | Preferred Brand | Medium co-payment and mostly brand name drugs | $$$ |
| TIER 4 | Brand | High co-payment and nearly all brand name drugs | $$$$ |
| TIER 5 | Specialty | Highest co-payment or co-insurance and mostly brand name & infusion drugs | $$$$$ |
To minimize your drug costs, look for a plan which covers the drugs you take in more favorable tiers. Our team can help you optimize your coverage for the drugs you need.
Optimizing Your Pharmacy
Insurance companies divide pharmacies into “preferred” and “retail”. In general, “preferred pharmacies offer more cost-effective prescription drug options.
Most plans offer several pharmacy options; however, you will generally spend more for prescription drugs at “retail” pharmacies.
Generic vs. Brand Name Drugs
According to the Food and Drug administration, generic drugs are the equivalent of brand name drugs in:
- Dosage form
- Safety
- Strength
- Method of administration
- Quality
- Performance characteristics
- Intended use
We recommend you ask your physician about using brand-name drugs vs. generics. Often your provider can help you control costs by prescribing a generic equivalent.
Our team can help you make the best use of generic drug coverage to get the most from your prescription drug benefits.
Learn more about Medicare
Visit our Medicare Resource Center which provides helpful articles on everything you need to know about Medicare.