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Have you noticed that some medications have a higher cost than others, even if you’re covered under Medicare Part D? If you’re trying to manage your Medicare Part D costs, keep reading to learn what you can do.
Medicare Part D coverage is optional, but most Medicare beneficiaries choose to enroll in a Medicare prescription drug plan. A 2019 report from the Centers for Medicare and Medicaid Services (CMS) showed that about 45 million of the 60 million people enrolled in Medicare also have prescription drug coverage under Medicare Part D.
Unlike Original Medicare (Part A and Part B), which is government insurance, Medicare Part D is available only through private insurance companies that contract with Medicare. That means that premiums, deductibles, copayments, and coinsurance amounts for Medicare prescription drug plans are set by private insurance companies. Certain Medicare Part D costs and coverage details can vary among plans.
All Medicare Part D prescription drug plans must cover at least two drugs in each prescription drug category or class used to treat most illnesses and diseases. However, each plan can generally choose which two drugs to cover in each class, and sets its own cost-sharing for covered drugs. This is one reason for some of the cost differences among Medicare prescription drug plans.
Another reason some prescriptions may cost more than others under Medicare Part D is that brand-name drugs typically cost more than generic drugs. And specialty drugs used to treat certain health conditions may be especially expensive. Read more about generic vs. brand-name medications.
All Medicare prescription drug plans publish plan formularies. This is simply a list of the covered medications in each class and the cost-sharing structure for each one. If you take a certain prescription drug that’s not on your plan formulary, your doctor might be able to prescribe a similar medication.
To keep costs down under Medicare Part D, many Medicare prescription drug plans encourage generic drugs over their brand-name counterparts. The plan may require step therapy before approving a brand-name medication, for example. If your plan uses step therapy to help manage costs, your doctor may have to prescribe a generic version of the medication first and observe your response to treatment. If your condition is under control, it may not approve the brand-name medication. If, however, your doctor believes you need the brand-name medication after the generic trial, the insurance company may cover it.
Some plans may require prior authorization before they will cover a medication. Others set limits on how many doses of a particular medication you can fill at one time or over a particular time period; doses exceeding that amount won’t be covered.
Tiered formularies are another way insurers keep costs low. Under a tiered formulary system, plans place different medications in different price categories, or tiers. Copayments or coinsurance amounts are generally lowest in the bottom tiers, and get more expensive as you move into higher tiers.
Although each Medicare Part D Prescription Drug Plan arranges its price tiers differently, most use some version of the four-tier structure:
Here’s how your Medicare Part D costs can vary even within the same plan’s formulary. For example, you may have a $0 copayment for your generic high blood pressure medicine, but make a $45 copayment for your brand-name diabetes medication. If your doctor prescribes a brand-name drug in a higher tier, ask about generic alternatives to lower your costs.
If your Medicare Part D Prescription Drug Plan contracts with a mail-order pharmacy, you may be able to reduce or even avoid your copayments or coinsurance amounts for up to 90-day supplies. Instead of paying a copayment each month when you refill a prescription, you might pay a single, often lower copayment for a three-month supply. If you take daily medications, you may want to see if your Medicare prescription drug plan offers mail-order pharmacy services and how it affects your out-of pocket costs.
Your out-of-pocket costs can vary among plans, whether you have a Medicare Advantage plan or a stand-alone Medicare Part D prescription drug plan. And plans can make changes every year. You may want to take a look at your Annual Notice of Change – your plan will send that to you every fall. If your prescription prices went up, or if the plan no longer covers your medications, you can generally change plans during the Fall Annual Enrollment period (October 15-December 7 every year).
It can be worth the few minutes it takes to compare Medicare prescription drug plans. And it’s easy! Just enter your zip code on this page, follow the prompts, and enter your prescription drugs to see which plans may cover them for the lowest price in your area.
eHealth's Medicare website is operated by eHealthInsurance Services, Inc., a licensed health insurance agency doing business as eHealth. The purpose of this site is the solicitation of insurance. Contact may be made by an insurance agent/producer or insurance company. eHealth and Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. We offer plans from a number of insurance companies.