Part D Precription DrugPrescription Drug Plan

Medicare Prescription Drug Plan Deductible – How Does It Work?

A client called this morning and asked this question:
“Dan, I went to refill my prescription and was quoted almost double what I paid in 2018.

Medicare Part D Prescription Drug plans reset each year on January 1. What that means is the prescription drug benefit levels start over at what is called the Deductible Phase.

The Deductible is the amount you pay before your prescription benefits begin.

Not all but most Medicare Part D plans have some form of a deductible. Because plans differ be sure to ask what medications, if any, are subject to the deductible.

  • Plans with a deductible usually apply it only to medications in the higher tiers 3, 4 and 5, while some standalone drug plans apply the deductible to all medications – generic and brand.
  • Social Security’s Full Extra Help program will pay for the plan deductible.

“And what will the prescription refill cost after this 90 day supply is used?”

To answer this client’s specific question I needed to confirm:

  1. The name of the medication, dosage and supply (Ex: Xarelto, 20 mg, 90 day supply)
  2. Whether the drug is included in his drug plan’s formulary and, if so, the Tier Level and whether it was subject to a deductible. (Yes, this client’s plan includes Xarelto as a Tier 3 medication which is subject to $150 annual deductible.)
  3. The approximate cost of the medication. (I searched online and learned the cost for 30 Xarelto tablets range from $427 to $518 https://www.goodrx.com/xarelto

Let’s assume the 90 day supply of Xarelto tablets cost $1275 ($425 times three months.)

  • The member was quoted first the $150 annual deductible. (Your plan may differ)
  • The member was next quoted the copay for a 90 day supply of Tier 3 medication of $131. (Your plan may differ)
  • The combined ($150 plus $131) cost to client was $281.00. His Medicare drug plan pays the difference (The estimated $1275 cost less his $281.)

When the 90 day supply is refilled, the deductible would have been satisfied so the refill cost will not be the $281 but the $131.00 for the 90 day supply.
Q: “If I take more than one medication subject to the deductible, do I have pay it for each drug?”
A: No. Once you have paid the plan deductible, you have satisfied the requirement whether you take one or several drugs in that category.

Some tips:

  • Check all of your medications, including form (table, capsule, injection, etc) and dosage, against your Medicare drug plan formulary. If your drug is not listed, you can request a formulary exception from your plan.
  • Check which Tier Level your medications are assigned to – including those approved by formulary exception. Medication Tiers 1 and 2 are usually not subject to a deductible and have lower copay requirements. Medications listed in Tiers 3, 4 and 5 are more expensive, may be subject to the plan’s deductible, and carry higher co-payments.
  • Ask your healthcare provider to check your plan’s formulary before prescribing a new medication and whether a lower cost (generic) medication is equally safe and effective. This helps minimize sticker shock at the pharmacy counter.
  • Ask your plan agent or representative about preferred pharmacies. Often your plan has negotiated reduced drug costs with certain retailers. For example, United Healthcare and Walgreens have a preferred pharmacy relationship and CVS has recently acquired Aetna Healthcare. Using a plan preferred pharmacy can help reduce your out of pocket costs.

January 6 2018 post regarding Medicare Part D Prescription Drug Deductible

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