Medicare prescription expenses become more of a concern for retirees and caregivers as the US population ages. On average, Medicare beneficiaries spend about $1,500 in expenses annually out of their pockets for prescription expenses.
As prescriptions tend to play a larger role in our well-being as we age, here are the top 10 ways to manage and reduce prescription expenses:
- Sign up for Part-D Prescription coverage when enrolling in Medicare
As obvious as this sounds, it is not uncommon to come across those with Part D late enrollment penalties (LEP) due to not enrolling in prescription coverage upon becoming eligible. We often hear that “Social Security never told me that I had to enroll” or “I didn’t think it was important”.
Most people enroll in Medicare upon turning 65 and are in good health, but as the years go by prescriptions are needed and if there is no Part D coverage, the cost of prescriptions out of pocket can be egregious. When enrolling in Medicare Part D after the initial enrollment period, you will likely be subjected to a late enrollment penalty of 1% for every month that you didn’t have coverage. This is a lifelong penalty, not just for one month.
We sometimes see upwards of $30 per month in unnecessary penalties! Those add up quickly.
- Extra Help Program through Social Security
For those that do have the Part D late enrollment penalty and have lower income and very limited financial assets, you may qualify for the Extra Help or Low-Income Subsidy (LIS) program offered through Social Security.
This is a wonderful program that can eliminate the monthly Part D penalty and reduce in part or in whole the Part D portion of the Medicare monthly premium. We have helped many clients successfully apply for this program.
This program also limits the amount you have to pay for prescriptions among other benefits (e.g., no coverage gap phase or donut hole).
- Choosing the Right Medicare Plan
This may sound silly, but we often come across individuals that haven’t ever analyzed their prescription costs. Whether you are on a Prescription Drug Plan or Medicare Advantage plan with prescription coverage there are often many options to choose from. This is where Medicare gets crazy complex!
It’s not uncommon for us to come across a situation where we can help a retiree save hundreds or even thousands of dollars if they have more expensive prescriptions. The analysis requires a deep dive across dozens and dozens of plans that may be offered and can’t simply be done in a 10-minute phone call.
Don’t just stick to the same plan because you always have, as you may be overpaying. Be wise, and for peace of mind, validate that the prescription coverage you have today still makes the most sense.
- Ask, Ask, Ask
We must clearly state that we are Medicare Benefit Advisors and not physicians. When a doctor prescribes an expensive medication we often train our clients to ask questions such as “Why?”, “What other options exist?”, and “Does this have a generic option?”
A family friend was put on a prescription that costs hundreds of thousands per month in a drug class where a common generic was available for a fraction of the cost! We need to be certain we are exploring all options.
For those that fear moving from a brand name prescription to a generic, take note that generic drugs are just as safe and effective as the brand drug. The drugs contain the same exact active ingredients and undergo significant testing to pass the rigorous FDA approval process.
- Check your Medicare Plan’s Formulary
The costs for some prescriptions might be high if they are not included in your drug plan’s formulary! We recently came across a situation where a gentleman on a certain form of insulin was not covered under his current plan. When he switches to a new plan he will be able to save several hundred dollars per month, simply because his insulin will be in the new drug plan’s formulary.
As your health and prescriptions change, be sure to check the formulary each year. Just because a drug is included within a formulary one year does not guarantee that it will be in the formulary or at the same tier the following.
- Manufacturer Discount
If you are obligated to be on an expensive branded drug with no options for a generic or less expensive alternatives, reach out to the manufacturer of the drug. Certain drug manufacturers will offer financial assistance programs where the drug may be significantly reduced or even free in some cases.
- Deductibles ahead – look out!
Similar to some health plans or car insurance, your prescription drug plan may have a deductible. This might only apply to specific drug tiers or to all prescriptions. Be sure to understand your plan and whether any deductibles apply for your situation.
- Drug Form (Tablets vs. Capsules)
If you have an expensive prescription for a common drug, the drug form may be the issue. Some formularies prefer a tablet over a capsule (or vice versa) for certain prescriptions. The differences could mean hundreds of dollars per month or year.
- Standard versus Preferred Pharmacy Options
Confirm that the local pharmacy used for your prescription is the best one for you. Pharmacies will charge drastically different prices for the same prescription.
Recently, we advised a client to request that their doctor fulfill most of their prescriptions at a certain pharmacy. However, we had their doctor fulfill one prescription at a separate pharmacy that was also close, which ended up saving this client over $600 per year.
Know that you are not obligated to stick with only one pharmacy!
- Mail Order Pharmacy
We often, but not always, recommend mail order pharmacies if someone has a small handful of prescriptions. Mail order is often less expensive than standard or even preferred pharmacies, but not always. In some instances, it may even cost more, much more.
Usually, mail order is setup for you to receive your prescriptions just before the last prescription runs out. If you take your prescriptions less than prescribed, you will end up with a glut of extra prescriptions.
Since mail order usually comes in 3-month quantities, if you have 20 prescriptions receiving them via mail order may save you some money, but could end up being a hassle to manage the large amount of prescriptions all at once.
- Bonus: Veterans and those without Drug Coverage
For veterans that qualify for VA benefits, look into a Medicare Advantage plan without drug coverage to complement the benefits you receive through the VA with additional dental, vision, hearing coverage if you qualify for VA prescription coverage. Usually veterans favor these Medicare Advantage plans due to the monthly Part B reduction (reduces monthly Part B premium).
On occasion, Medicare Advantage without prescription drug coverage plans are also an option we recommend to individuals that decided to forgo enrolling in a drug plan early in their retirement years and now are assessed a hefty monthly penalty. The Part B reduction that these plans offer can help defray some out of pocket prescription or other expenses.
In conclusion, the rising costs of US health care have forced us all to become health care consumers. We must be informed, ask questions and investigate various options.
Doctors don’t understand the nitty gritty details of the many dozens of insurance plans and how much prescriptions or certain procedures will cost. That’s now up to each Medicare beneficiary. If we don’t ask, no one will and it’s not a matter of if, but when you will get burned if you don’t do your own due diligence.
What other ways have helped you save on Medicare prescription costs? Feel free to comment below.
Medicare is extremely complex and confusing! Reach out to us to ensure you are paying the least amount for your Medicare prescriptions and premiums:
0 Comments