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Can I use a discount drug card if I have Medicare prescription drug coverage?
The short answer is yes. But there are some important limitations you must know about in order to get the most value from both a discount drug card and your Medicare prescription drug benefit.
Unlike Medicare, a discount drug card is not insurance. In other words, a discount drug card cannot replace your Medicare prescription drug coverage or any other insurance coverage. The main purpose of a discount drug card for Medicare beneficiaries is to provide discounts on prescription drugs that are not covered under the Medicare Part D program or by your prescription drug plan.
When can Medicare beneficiaries use a discount drug card?
To get the most value from your Part D plan—whether it's a PDP or Medicare Advantage Plan with prescription drug coverage (MA-PD)—the best time to use a discount drug card is when you have to pay 100% of your prescription drug costs. This is typically the case when you use non-covered drugs, or when you are in the Deductible and Coverage Gap stages of your benefit. A discount drug card may help you save on your prescription costs if:
- Your plan has a high deductible (the amount you pay before your insurance starts)
- You enter the Coverage Gap (also called the Donut Hole)
- You have prescriptions for drugs that are not covered by Medicare Part D or your insurance plan
That being said, the key to using a discount drug card is to make sure you compare prices to get the best deal. Insurance companies can negotiate with network pharmacies to get lower prices, so there may be times when you will pay less through your Medicare Part D plan. And don't forget about the Part D discounts for covered drugs in the Donut Hole: In 2013, you get a 52.5% discount on brand-name drugs and a 21% discount on generic drugs when you're in the Donut Hole (the discount for generics increases to 28% in 2014).
So if you are in the Deductible or Coverage Gap stage, you should present your Part D card at the pharmacy first, and then ask the pharmacist to check whether or not the discount card will give you a better price than your Part D benefit.
Will cash purchases with a discount drug card count toward my Part D true out-of-pocket balance?
Again, the short answer is yes. However, there are several important rules you must generally follow in order for your cash purchases with a discount card to apply toward your total drug spend (what you pay, plus what your plan pays) and true out-of-pocket (TrOOP) balance.
1: The drug must be covered by your Part D insurance plan
In order for your prescription drug expenses to apply toward your TrOOP, the drug must be on your plan's formulary (list of covered drugs). This rule applies whether you are using a discount drug card or your Part D benefit.
2: You must be in either the Deductible or Coverage Gap stage
Your cash purchases with a discount drug card will only apply toward your TrOOP when you are in the Deductible or Coverage Gap stage of your benefit. You should never use a discount drug card for a covered Part D drug when you are in the Initial Coverage stage or Catastrophic Coverage stage.
3: You must use a network pharmacy
Under most circumstances, your costs will only apply toward your total drug spend and TrOOP if you fill your prescriptions at a network pharmacy. Similarly, any drugs purchased outside the United States or its territories will not count toward out-of-pocket costs. This rule applies whether you are using a discount drug card or your Part D benefit.
4: You are required to submit all receipts to your Part D plan
Even if all of the first three rules are met, there is still one more step you will need to take: You must let your insurance plan know about each and every purchase you make with a discount drug card.
Part D plans keep track of your total drug spend and TrOOP in order to determine when you enter the different stages of your benefit, and when you qualify for Catastrophic Coverage. Therefore, in order to get credit for your drug costs, you must submit your pharmacy receipts to your insurance company. Simply ask your plan for a paper claim form and complete the section for requesting a TrOOP update (most plans provide this form on their website, or you can call your plan's Customer Service number to request one).
Other than when I am in the Deductible or Coverage Gap stage, are there other times when a discount drug card can help me save?
Yes. Whenever you have a prescription for a drug that is not covered, you can use a discount drug card in order to supplement your Part D benefit and lower your medication costs. For example, a discount drug card can help you save when you purchase any of the following types of drugs during any stage of your Part D benefit:
- Drugs that are not covered by your plan's formulary
- Over-the-counter (OTC) drugs for which you have a doctor's prescription
- Drugs that are excluded from Medicare Part D, including drugs for weight loss or gain, cosmetic and hair growth drugs, fertility or erectile dysfunction drugs, etc.
It is important to note, however, that if you use a discount drug card for any non-covered drugs, your expenses will NOT count toward your total drug spend and TrOOP. On the other hand, it can be very convenient to use a discount drug card with non-covered drugs, because you do not have to compare prices between the discount drug card and your Part D benefit.