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Out-of-pocket drug costs include all prescription drug expenses that you have to pay out of your own pocket, such as premiums, deductibles, copayments, and coinsurance. While prescription drug costs can easily overwhelm you or your budget, there are several ways to lower your Medicare prescription drug costs.
Evaluate your drug coverage every year
According to federal guidelines, Medicare Part D Plans and Medicare Advantage Plans with prescription drug coverage can change every year. For example, they can add or remove drugs from the formulary (list of covered drugs), increase copayments and coinsurance, or move drugs from lower-priced tiers to higher-priced tiers. So just because you are paying $10 for a drug right now doesn't mean it will still be $10—or even still covered by your plan—the following year.
That's why it's important to compare Medicare plans during the Annual Election Period (also called Medicare Open Enrollment) to make sure you are in a plan with the lowest overall cost based on the medications you take. When shopping for a plan, remember to consider the monthly premium and annual deductible as well as the annual costs for all your medications. Keep in mind that a plan with low monthly premiums may end up costing your more in the long run if you have to pay higher copayments for your medications.
Ask your doctor to prescribe generic drugs
While there are some instances in which brand-name drugs are medically necessary, in most cases lower-cost generic drugs will do just as well to treat your condition. Unfortunately, some doctors do not consider the prices of medications when they write prescriptions. That's why it's up to you so speak up when your doctor gives you a new prescription. Do not be afraid to talk with your doctor or your pharmacist to find out whether there is a generic drug that could also be right for you. Some Medicare Part D plans offer copayments as low as $0 when you use generic drugs, so asking your doctor to prescribe generics could make a big difference to your budget.
Consider using a mail-order pharmacy for long-term medications
If your plan offers a mail-order pharmacy in its network, you should compare the costs of using mail order with using a retail pharmacy. Not only is mail order convenient if you're taking medications on a long-term basis, but mail-order pharmacies often cost significantly less than a retail pharmacy. For example, with some plans, you may be able to get a 3-month supply of drugs by mail for the same price as a 1-month supply at a retail pharmacy. Most plans that provide a mail-order pharmacy also offer free standard shipping for this service.
Review your eligibility for Medicare's Extra Help program
Medicare offers financial support to Medicare beneficiaries with low income and limited resources. If you qualify for Medicare's Extra Help program, Medicare will pay up to the full cost of your out-of-pocket drug costs, based on a sliding scale. The National Council on Aging has an online tool that can help determine your eligibility for Extra Help and other programs, and will assist you with an easy application. Find out more by going to http://www.benefitscheckup.org/ and clicking on "Medicare Rx Extra Help."
Use tools such as the AARP's donut hole calculator
The AARP has developed an interactive tool that can help you figure out how close you are to the reaching the coverage gap in Medicare Part D known as "the donut hole." The tool will also help you identify equivalent but less expensive alternatives to the drugs you already take. If lower-cost and therapeutically-similar drugs are identified, the tool will generate a letter to take to your doctor that asks about the pros and cons of making a switch. Visit http://doughnuthole.aarp.org/ for details.
Consider joining a plan that offers additional coverage in the gap
During the coverage gap stage of your Part D benefit, you are responsible for paying a larger share of your prescription drug costs. With the standard Medicare benefit in 2013, you will pay 79 percent of the cost for generic drugs and 47.5 percent of the cost for brand drugs in this stage. Some plans, however, offer additional coverage in the gap, which could help you save money if you take many medications on a regular basis. Types of additional coverage can include:
- Lower copayments for generic drugs than with the standard Medicare benefit
- $0 co-payments for generic drugs when you use a mail-order pharmacy
- Full coverage in the gap (a few plans, such as some employer-sponsored plans, do not have a coverage gap stage)
Keep in mind that if you select a plan that provides extra coverage in the gap, you may have to pay a higher monthly premium for this added benefit. If your annual medication costs are not high enough to reach the gap, or you don't follow the plan rules to get this extra coverage—such as using generics or a mail-order pharmacy—you may end up paying hundreds of dollars more in premiums for this feature than you get back in drug benefits.