There’s a lot of nuance and special little situations that you might not think about when choosing your Medicare prescription drug coverage. We’re here to answer some common concerns, and to bring up some other things that you may not have considered, too.

Choosing the right Medicare plan for prescription drugs can result in much better coverage than choosing a non-ideal plan, or great savings. Not all plans are created equal, and you’ll have to shop around to find the best ones. We are here to help you with this process in particular, and to shine some clarity on the confusing world of Medicare.

1. How Much Does Prescription Drug Coverage Cost?

Medicare prescription drug plans vary in price. It depends largely on the type of coverage you want, but there are other costs to consider such as monthly premiums, deductibles, and co-insurance/co-payments. For the most part, companies are allowed to set their own prices so you may want to shop around for the best deal. 

Monthly premium: According to Medicare (as of 2020), the average monthly premium is $32.74 per month. As costs aren’t standardized, prices will vary between plans. You can find a plan to fit your budget by choosing coverage that meets your needs without unnecessary extras. 

Deductibles: Some prescription drug plans have a yearly deductible that you will need to spend before the plan will provide coverage. As of 2020, yearly deductibles are capped at $435 and you may be able to find a plan without a deductible. 

Coinsurance/copayment: Most plans will involve sharing the costs through coinsurance or copayment. Coinsurance refers to the percentage of a prescription’s cost that you will be required to pay. For example, you might be responsible for 20% of the total cost and your plan will cover the remaining 80%. A copayment is a specified dollar amount that you will be required to pay when you get a prescription filled. For example, you might pay $10 for prescriptions with your plan covering the remaining cost. 

2. What Prescription Drugs are Covered? 

All Medicare prescription drug plans have a list of approved medicines (otherwise known as a formulary) they will help pay for. That said, Medicare requires all plans to include the following classes of medication: 

  • Antidepressants
  • Antipsychotics 
  • Anticonvulsants 
  • Antiretrovirals
  • Antineoplastics 
  • Immunosuppressants 

Within each class, plans are required by Medicare to include at least two options. If your medication is not covered, your doctor can request a formulary exception if there isn’t a suitable alternative and your plan will either approve or deny the request. It’s a good idea to check the formulary of the plan you’re interested in before enrolling to ensure that your medications are covered. 

Formularies are divided into 4 or 5 levels (tiers) based on the cost of the medicine. Generally, the lower the tier, the less you will pay.

You don’t want to end up finding out that the specific drug you need isn’t covered, or having to adjust your medication based on what you can afford. If you need a certain drug, make sure it’s covered by the plan you’re thinking of getting.

3. Here’s What Part D Doesn’t Cover

Medicare Part D does not cover over-the-counter medications including cough and cold medicine, pain relievers, and antihistamines. It also won’t cover prescriptions like Viagra when used for erectile dysfunction, hair loss medications, prescription vitamins, or medications for losing or gaining weight.

If those are the drugs or medications that you need, it’s better to know that they’re not covered by your plan before signing up for the plan. It can be frustrating to learn that your medication isn’t covered because it’s not in the correct class, but it’s worse to sign up for a prescription drug plan that won’t suit you.

4. What is a “Donut Hole”? 

Most Medicare prescription drug plans have a coverage gap referred to as a donut hole. You enter the donut hole when your total drug costs (including what your plan has paid) exceed $4,020 (as of 2020). This amount may change each year. 

This used to mean that you would be responsible for paying for your medications out-of-pocket until you the catastrophic stage of coverage ($6,350) but new laws have changed this for 2020. Instead, you will be responsible for 25% of the total cost of your medication and the drug manufacturer will cover the remaining amount. 

Once you enter the catastrophic stage of your prescription drug coverage, you will be required to pay a lower copay or 5% of the total cost of your medication, whichever is higher. 

5. Additional Rules You Need To Know About

Some prescription drugs have requirements that will need to be satisfied before your plan will provide coverage. This includes:

  • Prior authorization: If your medication isn’t covered by your plan, your doctor can request approval. Your plan may approve or deny this request. 
  • Step therapy: If you are starting a new treatment, your plan might require you to try a less expensive medication (usually generic) before it will provide coverage for a medication that costs more. 
  • Quantity limits: Coverage for certain medications (like opioids) will be capped at a specific number of doses and/or refills.

You should read the terms of your plan before signing anything. It can be time-consuming to read through it, but do your best and make sure you understand your plan as well as possible. The salesperson for an insurance company won’t always have your best interest in mind. That’s not to say they won’t help you, or won’t explain things to you, but don’t be afraid to take your time to read and understand any documents before you sign them.

6. Making Changes to Your Medicare Drug Plan

Medicare offers an open enrolment period that lasts from October 15 to December 7 of each year. During this time, you are allowed to make changes to your existing Medicare prescription drug plan, enroll in a Medicare prescription drug plan or Medicare Advantage plan, or drop your plan entirely without risking a penalty.

If you regret your initial plan choices, or if your situation changes and you decide that you would benefit from a different plan, make sure you set a reminder or write in your calendar so that you don’t miss the yearly opportunity to make changes.

7. Which Pharmacies You Can Use With Medicare Prescription Drug Coverage

Most Medicare prescription drug plans are limited to pharmacists within the plan’s network. If you have a pharmacy nearby that you prefer using, it’s recommended you choose a plan within that network.

This isn’t something that many people take into consideration when choosing a plan, but if you can save yourself a trip and stick to a convenient pharmacy that you prefer, it’s certainly worth looking into. This is why it’s so important that you’re here, doing the research, because it gives you such an advantage to be informed about your healthcare, including little details like this.

It’s important to note that some networks include preferred retail pharmacies that can offer plan members additional discounts on prescription medications.

Final Thoughts

This is far from an exhaustive list of everything you need to know, so take some time to browse the rest of this site to learn more. Make sure you come back again to see all of our latest content, we’re always adding new resources to help you and to empower you to make great healthcare decisions. Here are some other helpful resources:

If there’s anything else that you’re curious to learn about that you can’t find here, just reach out to us. We’ll do our best to address it. We’re always here to help!