Compare Medicare Prescription Plans
Plan premium + copays = estimated annual out-of-pocket
What is the best way to compare Medicare Prescription Drug Plans?
Before we discuss how to compare medicare prescription drug plans, let’s review the variables that go into comparing Medicare Prescription Drug Plans. Such as comparing Medicare Prescription Drug Plan premiums, copays, and applicable drug restrictions. It’s important to evaluate all three of these categories when comparing Medicare Part D Drug Plans. Here are the most common categories Medicare beneficiaries focus on when comparing drug plans.
Compare Medicare Prescription Drug Plan Premium: This is what the insurance company charges you monthly to provide the prescription drug insurance. 2024 Medicare Prescription Drug Plan premium range: $0.40-$188.40- 22 stand-alone plans in 2024 (Medicare.gov). So, there are many options, great. Now it’s time to find the best combination of the prescription drug plan premium and applicable copays to your medication list.
Compare 2024 Medicare Part D Drug Plan Deductible: This is what you’re responsible to pay before the insurance begins to pay its share of the prescription cost. Not all plans have deductibles. If applicable, the deductible will be annual, and apply to the calendar year from January to December, regardless of enrollment date. For example, if enrollment is 05/01/2024, the deductible of $545 (or less) applies from May-December of that year and would likely re-apply January 1-December 31st if you were enrolled in the same plan the following year (deductibles vary from year to year).
Compare Medicare Part D Co-pay/Co-insurance: This is the portion you’re responsible for paying as a fixed % or flat copay for prescriptions. For example, you may have a $5 copay for a generic tier 1 drug or a 25% co-insurance charge for a name-brand tier 4 prescription. Co-pay/co-insurance is important, but also remember to add the Medicare drug plan premium to estimate your total out of pocket costs for the year.
Comparing Medicare Prescription Drug Plan Tiering/Restrictions/Authorizations: The two most common drug restrictions are step therapy and prior authorization. These are put in place for many reasons by the Medicare Prescription Drug Plan insurers and/or Medicare. Cost control and oversight of opioid/narcotic prescriptions are a few examples of why these measures are implemented into certain plans each year. Not all plans have the same restrictions and/or prior authorizations. You will often see Quantity Limits as a drug restriction as well.
Often, this isn’t an issue as this is a cap on over prescribing certain medications. It’s likely your physician prescribes the drug within those parameters and therefore, a quantity limit of 30 a month, or 60 a month isn’t an issue when prescribed once daily or twice daily. The quantity limit is set, but usually has no effect or restriction on the drug like the step therapy or prior authorization.
With 22 stand-alone plans in CA – 2024 and the Medicare drug plan monthly premiums ranging from $0.40 – $188.40, it’s no surprise this task seems overwhelming to many Medicare beneficiaries shopping plans. To make things more complicated, there is no standardization when comparing Medicare Prescription Drug Plans side-by-side, nor is there a fixed “general list” of drugs to compare. Each plan has its own specific formulary (list) and tiering system (categories) as long as they fulfill the minimum requirements set by Medicare to issue their drug plans.
The secret is... there is no secret!
Thankfully, we have a few tools that technology provides to allow us to compare Medicare drug plans at one time (22 in CA- 2024). The most popular being Medicare.gov’s prescription plan finder. The plan finder will do all the hard work for us– ranking plans in order of estimated least out of pocket (premium + copays). More importantly, they are ranked in an objective way as to not favor any insurance Part D plan over another. Go with the Part D plan that is best for you.
We also like to use this tool because it provides our clients objective results when we are comparing/quoting plans in California. Simply enter your ZIP code and start the process of entering in your medications. Once the plan finder ranks the drug plans according to your list of medications, the only thing we need to do is interpret that information properly to make the best decision for your drug coverage. Below is an image of what you’ll see when you input your ZIP code into Medicare.gov’s plan finder (Medicare.gov, 2024).
Drug list: List the medications you currently take, or plan to take throughout the year. For the initial comparison, use all your prescriptions– those you currently take and could possibly take during the year. If you would like to update your medication list once the projection is completed, that’s simple, just add/delete medications as needed. It’s better to include your entire list of medications to have an idea of what they cost/how they are covered, than be uninformed and surprised later that year.
It is also important to note that the drugs you enter to review/compare using this tool are not tracked by the Part D Plans and/or used to determine your health status or eligibility to enroll into any of the Medicare Part D plans. This Plan Finder is merely showing you a breakdown of your estimated costs for “John Doe or Jane Doe” for a list of drugs for that particular plan year. Feel free to add or remove drugs to view estimated costs for the year. Below is an image of Medicare.gov’s plan finder to enter your drugs (Medicare.gov, 2024).
Pharmacies: Which pharmacy? You can list up to 5 and adjust them as needed throughout the analysis. Most plans have preferred pharmacy pricing, standard pricing, and mail-order pricing (mail-order is likely considered preferred pricing with most Part D plans – i.e. 90 day supply).
It’s best to choose pharmacies you’re already using, or could possibly take in the plan finder. If you need to work backwards by adjusting the pharmacies, you can easily do so. Just select/replace alternative pharmacies to see if they are considered part of the preferred pharmacies for the top ranked plans in your list. You’ll likely be presented with a combination of preferred pricing and standard pricing when ranking the plans. Adjust accordingly, as you see fit and re-run the projection. We can help you do this and analyze plans together using the objective Medicare.gov plan finder.
The decision of where you want your prescriptions dispensed is up to you. This drug plan finder comparison is merely showing you the estimated cost of the drugs if you chose to have them dispensed at those “selected 5 pharmacies” if you enrolled in one of those Part D Plans for the year. You always have the option of moving your prescriptions to any pharmacy during the year– that’s between you and your physician, not the Part D Plan. Below is an illustration of how you can choose your pharmacies and review coverage on Medicare.gov, 2024.
Total Estimated Cost: This is similar to how the plans will initially be ranked. Lowest cost (Medicare Drug Plan premium + copays) as an estimated annual figure. Many times I find clients looking at premiums only. This is a mistake. The bottom line is the total cost you’ll pay for your coverage and co-pays in the pharmacy, right? Does it matter who you are paying as long it’s the lowest combination of the two? No, it’s either the insurance company or the pharmacy you’ll be paying. Lowest combination of the two is ideal.
Find the lowest combined out-of-pocket cost. Also, a Part D Plan with a higher premium may not seem cheaper at first glance, but if the copays are lower compared to other plans, the estimated out of pocket costs may show the higher premium plan as a better deal for the estimated costs for the year.
If you do not take medications, but you want to enroll in a Part D plan in case you need prescriptions during the year and/or to avoid the Part D penalty, you’ll likely want to chose the cheapest Medicare Drug Plan premium regardless of co-pays. For 2024 that would cost you $0.40 a month. As always, you can change the Part D Plan each fall during the AEP October 15th – December 7th for the next calendar year if you need to adjust your coverage for new medications or the plan changed.
If you qualify for Medi-Cal or Extra Help with Prescription Costs, there are strategies for looking at certain premium/copay figures. Contact us for more information as it’s too complicated to explain each qualifying scenario without knowing your specific drug list and level of assistance.
Tiering, Step therapy, Quantity Limits, & Prior Authorizations: These will be listed for each drug once you click on the drug plan itself and select “View more drug coverage”. It will not show this in detail when looking at the drug plans when initially ranking plans for the comparison (ranked #1-22 in 2024). When you look at the specific plan, you can scroll down to see each tier for each drug with the corresponding co-pay/co-insurance and possible drug restrictions.
If there is a drug restriction such as step therapy, quantity limits, or prior authorization for each drug, it will be listed here. If you happen to see restrictions, it’s helpful to know before enrolling in the plan so you can anticipate it and plan with your doctor and/or pharmacist. The one restriction that is most common is quantity limits and generally, even if your dispensed medication falls within the parameters of the quantity limits, it will still notify you. The plan finder is indicating that “quantity limits exist for the medication”, not that you are necessarily over the quantity limit. If you see “yes” for the (QL), click on the “Yes” and it will share the maximum i.e. 30/60 day quantity for the medication. It’s best to review all aspects of the drug plan when comparing Medicare Part D plans during your IEP or AEP each Fall.
