Medicare prescription drug coverage is even more confusing than commercial prescription drug coverage, especially due to the coverage gap (donut hole). Medicare plans are heavily biased to steer you toward generic drugs. While in principle this is a good thing with regard to avoiding wasteful spending, it is a VERY bad thing for people with diabetes. That is because only about 20% of diabetes medications are generic. The other 80% are still brand-name drugs, and have list prices ranging from $300 to $800 per month. These brand drugs may be very beneficial to you, but unless you are wealthy or know how to carefully navigate the system, you will not have access to them. This article aims to help you navigate the system so that YOU will have access to what your doctor recommends.
Topic outline (links navigate to the section topic on this page):
Insurance plans that people get through their employer or purchase on their own are considered commercial prescription drug plans. Once you reach age 65, you will likely switch to a prescription drug plan that is regulated under the rules of Medicare part D. You may have head of these being called “part D replacement plans”1Yes, these are all Medicare plans, whether it is through WellCare, Humana, Anthem, etc. I have many patients that seem to be confused about this point.. Medicare part D and “part D replacement plans” are different than commercial insurance, but many features are similar. These include:
While many of the basic rules governing Rx drug coverage are the same, there are a few profound differences.
The structure of medicare part D is DESIGNED to scare you off from brand name drugs. The pricing is very confusing, and because of the different phases of coverage there are enormous fluctuations in your monthly cost. The point is to get you to switch to all generic medications. While that may be ok for some health conditions, it is NOT OKAY for most patients with diabetes, since the modern drugs (anything made in the past 30 years) is still a brand name drug. The modern diabetes drugs may have specific benefits for you that the generic diabetes medications will not have. Unfortunately, EVERY SINGLE modern diabetes drug has a high list price. So, unless you are only using generic drugs, you will always face a high costs during the deductible phase and the coverage gap.
All is not lost, though. When you average the cost of the drugs over the year, the price is not nearly as steep as it appears when you have the spike in price from coverage phase to coverage gap phase (the example below demonstrates this). In addition, a large portion of seniors with diabetes will qualify for a patient assistance program, which will pay for the cost of the drug.
Here is my point: Do not fall for the pricing tricks and just settle for generic drugs if a modern drug would be better for your health. Do your research and use your doctor to get you the right treatment.
You can understand the drug pricing if you look up your medications on the medicare.gov website (this feature is only available during the enrollment period as far as I am aware).
On the medicare.gov website, when you select a plan it wil give you a breakdown of the drug coverage. This example is a hypothetical insurance plan that is based off one I looked up on the medicare website. Make note of:
For this example, I picked a common 3-drug combination for treating diabetes, which has 1 generic drug (metfromin) and 2 brand drugs (ozempic and farxiga). The medicare.gov website will show you your estimated costs for these medications with the insurance plan you select. These are shown in the table above. Make note of:
So this is what I would have paid each month when I showed up to the pharmacy. The first month is very expensive, since I’m paying off the deductible. The next couple months are much more reasonable since I’m in the coverage phase. By April I hit the coverage gap, so the price skyrockets. It takes about 4 months to get out of the donut hole, then the prices drop back down. On average, I would have paid $211 per month. That is a lot of money, but not as bad as it may appeared in january ($529) or in april ($334). And remember, a large number of people with medicare will also qualify for a patient assistance program or a Low income subsidy so will not have to pay nearly this much.
Extra Help is a federal program that helps pay for some to most of the out-of-pocket costs of Medicare prescription drug coverage. It is also known as the Part D Low-Income Subsidy (LIS).
You can apply for the Extra Help program through the Social Security Administration, using the agency’s print or online application. To apply online, go to https://www.ssa.gov/benefits/medicare/prescriptionhelp. Note, if you have Medicaid, SSI, or an MSP, you should be automatically enrolled in Extra Help so you would not need to apply.
If you are eligible for Extra Help but already have other drug coverage (referred to as “credible drug coverage” in medicare-speak), you will need to figure out which is more beneficial to you. Ask your former employer or union if you can get a Part D plan without losing the retiree benefits you want to keep, and check if unenrolling from retiree drug coverage makes you ineligible for other retiree health benefits.
To keep Extra Help benefits from year to year, you must continue to meet the eligibility requirements. Depending on your state and how you initially qualified for Extra Help, this process may be automatic or require that you submit information to confirm your continued eligibility.
The Social Security Administration (SSA) may send you a letter in August or September titled “Social Security Administration Review of Your Eligibility for Extra Help”. The letter outlines the financial and personal information you provided when you applied and asks if any of it has changed (Note that if you and your spouse applied for Extra Help together, you will receive only one letter). If you receive the letter, you must complete the enclosed “Review of Your Eligibility” form and send it back to SSA within 30 days. SSA will use your answers to decide if you still qualify for Extra Help and at what level (full or partial), depending on how your income and assets changed. If you do not fill out and return the Review of Your Eligibility form, Extra Help assistance will end December 31.
If you qualified for Extra Help automatically because you had Medicaid, Supplemental Security Income (SSI), or a Medicare Savings Program (MSP):
Medicare Savings Programs (MSPs), also known as Medicare Buy-In programs or Medicare Premium Payment Programs, help pay your Medicare costs. These are state-level programs, so you have to apply through your state and the requirements differ depending on which state you are in.
There are 3 MSPs, and you apply for all 3 at the same time (the government will determine which specific MSP you qualify for, if any) The exact detailed differences between the 3 different programs are outside the scope of this primer. However, in general, all of the MSPs pay for Part B premiums and one of the programs also pays the part A premium for you. The three programs are called: Qualified Medicare Beneficiary (QMB), Specified Low-income Medicare Beneficiary (SLMB), and Qualifying Individual (QI) Program.
If you qualify and are accepted into an MSP, you will also automatically be enrolled in the Extra Help program, which significantly decreases your Medicare prescription drug (Part D) plan costs.
This depends on the state. The best place to start is your State Health Insurance Assistance Program (SHIP), all states have one. There is a federally-funded website that will help you locate your SHIP: https://www.shiptacenter.org/. Once on your state’s SHIP website, you can find MSP information specific to your state, as well as contact numbers for Medicare Counselors.
To qualify for an MSP, you must have Medicare Part A and meet your state’s specific income and asset requirements. You will find this information on your state’s SHIP website.
If you have Medicare part D, there is a good chance you can qualify for a patient assistance program (PAP) that will cover the cost of your diabetes medications. The main requirement is that your income is below a certain threshold. This threshold is usually 300% or 400% of the federal poverty threshold (see table below), for which many retirees will fall under. Note that your savings and assets DO NOT COUNT AGAINST YOU! This is a common misconception amongst patients.
Find your medication in the table below. It will show the income cutoff. If you think you may qualify, clink the link to the PAP website. Download the PAP application and print it out. Carefully review the requirements and gather the required documentation (this usually includes proof of your income and sometimes receipts showing how much you have spent on medications so far this year). Once you have the required documentation, bring the form to your doctor to complete their portion. Have the doctor fax the form in, and you should get a decision within a couple weeks.
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($51,520 or less for individuals, $69,680 or less for couples, or $106,000 or less for a family of 4)
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Unfortunately, there is no patient assistance program for this medication.
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Unfortunately, there is no patient assistance program for this medication.
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