Q: I just picked up my medication and the cost has gone down significantly? Did they charge me the right price? I was afraid to ask.
Answer: In the past I have talked about the four stages of Medicare Part D coverage; Deductible, Initial Coverage, Coverage Gap and Catastrophic Coverage. The retail cost of your medication will guide you through these stages of coverage. The amount you pay varies at each stage. (I have some interesting news for 2024 coverage at the end of this article!)
We usually talk about prices going up significantly this time of year as individuals hit the gap in coverage where your cost is 25% of retail cost. If your medication retails for $100, you’ll pay $25. If your medication retails for $690, you will pay $172.50.
Most individuals on Medicare do not reach the coverage gap, sometimes referred to as the Donut Hole. But when and if you reach this stage, you definitely feel the increased expenses. To qualify for the coverage gap, your medications must retail for more than $400 per month.
Maybe you’ve been paying that 25% deductible for the past few months and now you’ve come across the last stage of coverage called Catastrophic Coverage. Very few individuals reach the Catastrophic Phase of coverage. During the catastrophic phase of coverage, you pay $4.15 for generics, $10.35 for brand names, or 5% of the drug’s retail cost (whichever is higher). To reach this stage of coverage in a calendar year, you must have retail drug costs of more than $1,000 per month. Statistically, less than 5% of individuals with Medicare reach this stage of coverage. These are usually those individuals who are taking oral chemotherapy or highly specialized drugs.
Sometimes we see individuals whose medications cost $28,000 a month, so they go into catastrophic coverage within the first month of the year. But they still have to pay 5% of the drug costs for the rest of the year. For drugs that cost $28,000 a month, that’s a $1,250 copay for all months after the first month. That’s still a lot for the whole year. Many times we work with these individuals to find manufacturer assistance programs and grants to help meet these very high deductibles.
In thinking about your question, you may have hit a catastrophic phase of coverage and moved from a 25% to a 5% copay structure. This is a bill saver for you. You will remain in this catastrophic phase of coverage for the remainder of the calendar year for all of your medications.
Another thing that could have happened is that you enrolled in EPIC, the New York State Pharmacy Assistance Program. This EPIC coverage often has a deductible that is met with your paychecks as you move through the year. Once your EPIC deductible is met, your copay will be reduced to never more than $20 per copay. So you may want to consider a 90-day supply once you reach your EPIC deductible.
There could be several reasons why your medicines have suddenly become cheaper. Look at your receipt and that may help you determine the reason. Also, check your monthly statements from your Part D provider, which show how much your drugs cost and how much you paid in the previous month.
Sometimes I hear people say they won’t take their meds because it costs too much and that is NOT a good decision. You should work with your doctor and pharmacists to find out if alternative, less expensive drugs or discount programs are available.
The really exciting news I want to share with you is that in 2024, the Catastrophic Coverage Phase becomes $0 (FREE) for all drugs once you reach that coverage phase, if you ever reach that coverage phase. The Inflation Reduction Act of 2022 contains several provisions that have been phased in. I remember when I first heard about them I felt like we couldn’t get there soon enough. But we’re fast approaching 2024, and in 2024, the catastrophic phase will have $0 coverage for all drugs for anyone who reaches that phase for the rest of the year. This is exciting news for those individuals who have achieved this.
Janell Sluga is a Geriatric Care Manager helping seniors in our community access services and insurance. To contact her, email firstname.lastname@example.org.
#explain #drop #drug #prices