Retirement 2.0blog

Last chance for clients to save on drug costs

Medicare Part D open enrollment ends Dec. 7

Dec 1, 2017 @ 12:16 pm

By Mary Beth Franklin

There are only a few shopping days left—and I'm not talking about storming the local mall or clicking your way through Amazon.com to fulfill your loved ones' holiday wish list.

I'm referring to something that can save older Americans significant money next year: re-shopping their Medicare Part D prescription drug plan. But time is running out. Medicare's open enrollment season ends Dec. 7.

You might want to send out an e-mail reminder to older clients reminding them of this annual money-saving opportunity before the window closes. But don't be surprised if the only response is deafening silence.

Part D is Medicare's insurance program for prescription drugs that originated in 2006. Older Americans enrolled in original Medicare Part A (hospitalization) and Part B (outpatient services and doctors' visits) can enroll in Part D when they first become eligible for Medicare at age 65 and can switch prescription drug plans each year during open enrollment season.

Most Medicare Advantage plans include drug coverage and are also eligible for plan switching each year.

DREADED EXERCISE

But reviewing Medicare plans during the annual open enrollment season that runs from Oct. 15 through Dec. 7 each year ranks right up there with getting a colonoscopy, according to a recent WellCare Health Plans' survey that documents how much retirees dread Medicare enrollment. The online survey of more than 1,000 adults age 65 or older was conducted in October.

Although Medicare enrollees view health care as their most burdensome expense, the survey found they are less likely to comparison shop for Medicare plans than for their groceries, gas or homeowners/auto insurance, even though plan shopping would probably save them more money.

That's unfortunate.

"There can be dramatically large variations among what different plans charge for the same drug," said Mary Johnson, Medicare policy analyst for The Senior Citizens' League, an advocacy group for older Americans.

Earlier this year, Ms. Johnson released a study comparing the highest and lowest costs of 10 of the nation's most frequently prescribed drugs among 23 drug plans. The study included the cost of monthly premiums and deductibles.

Ms. Johnson found that the highest drug prices averaged 7.5 times more than the lowest, which varied widely from plan to plan. "There was no single drug plan that won an award for low prices for all the pharmaceuticals in this study," she said.

For example, a 30-day supply of levothyroxine, the generic equivalent of the common thyroid drug Synthroid, ranged from $17 in the lowest-costing plan to $151.50 in the highest-costing plan. Asthma drug Advair Diskus ranged in cost from $85.50 to $856.25. Diabetes drug Lantus Solostar ranged in cost from $77.75 to $682.

"That's why it pays to compare plans," Ms. Johnson said.

She recommends going to www.medicare.gov and clicking on "find drug and health plans". The search is customized to your zip code, county of residence and whether you are enrolled in original Medicare with a Part D plan or a Medicare Advantage plan that includes Part D coverage.

You should search for all the drugs you currently take on a regular basis and the pharmacies available in your area. There's a video on the website to help you get started. "You should create a complete list with correct spelling of drug names, dosages and quantity you use per month," Ms. Johnson said.

PREMIUMS VARY

The Centers for Medicare & Medicaid Services (CMS) estimates that the average monthly Part D basic premium for 2018 will be $33.50 per month. But premiums vary widely, depending on the drugs covered and the copays. If you are enrolled in a Medicare Advantage plan, part of your premium may include prescription drugs.

High-income retirees, defined as individuals with modified adjusted gross income (MAGI) of more than $85,000 and married couples with incomes topping $170,000 in 2016, will pay a monthly surcharge for Part D premiums ranging from an additional $13 to $74.80 per person in 2018.

(More: Medicare premiums and Social Security COLAs: Here's why retirees will pay up in 2018.)

The dreaded prescription drug coverage gap, known as the "donut hole," lives on in 2018. Once you have incurred $3,750 worth of drug costs next year, you will fall into the donut hole and be required to pay 35% of the cost of brand-name drugs and 44% of generic drugs. You'll continue to pay these prices until the total cost of your drugs reaches $5,000. Once you've hit that limit, you'll pay no more than 5% of your drug costs for the rest of the year.

It's a lot of information to absorb. No wonder so many retirees think of re-shopping their Medicare prescription drug plans a literal pain in the butt. But it could result in less pain in their wallets. Consider making this a priority for client communications next year when Medicare open enrollment resumes Oct. 15 through Dec. 7, 2018.

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