Tag: Drug Tier

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Medicare Part D Prescription Drug

The New Law and Medicare Part D

Well, just as we are finishing up the annual federal and carrier Medicare Advantage and Part D certifications for 2023, the US House and Senate passed a bill (H.R. 5376 titled Inflation Reduction Act of 2022) which includes some important changes to the Medicare Part D prescription drug coverage.

Some of these changes take effect next year and others over the next several years. I have looked over the text, studied several analysis and have summarized below the 4 changes most likely to Medicare beneficiaries:

  1. Insulin – Effective 2023
  2. Adult Vaccines – Effective 2023
  3. Cap on Out of Pocket Drug Costs – Effective in 2024 and 2025
  4. Medicare to Negotiate Part D and Part B Drug Prices – Effective 2026

Please note: If you are receiving Part D financial assistance through state Medicaid or the Social Security Extra Help program, your benefits may already exceed what is becoming effective in this new bill. Also, if your medications are covered through your VA benefits, you may want to compare these new benefits to what VA covers and compare your options in the years ahead.

1. Insulin – Effective 2023 Beginning in 2023, for Medicare Part D beneficiaries who need insulin, monthly out-of-pocket costs will be capped at $35, and starting in 2026, the cap would be $35 or 25% of the negotiated price if that is lower. And insulin products will no longer subject to a Part D deductible.

2. Adult Vaccines – Effective 2023
Beginning in 2023, Medicare Part D cost-sharing will be eliminated for adult vaccines that are recommended by the Advisory Committee on Immunization Practices. For most clients, the most significant change will be the new $0 Part D copay for the two shot Shingles vaccine, previously covered through Part D however frequently subject to a deductible and higher Tier copay.

3. Cap on Out of Pocket Drug Costs – Effective in 2024 and 2025
For clients with drug costs placing them in the “Coverage Gap” (aka Donut Hole) and Catastrophic Coverage Phase, this change will be very welcomed although phased in over time.

In 2024, that 5% coinsurance payment that now kicks in after someone reaches the catastrophic drug spending level in Medicare will end. As you may imagine, 5% on some of those expensive drugs that cost thousands monthly can be a lot of money. That ends in 2024.

And in 2025 your Medicare Part D out-of-pocket spending will be capped at $2,000 a year.

4. Medicare to Negotiate Part D and Part B Drug Prices
CMS (Centers for Medicare & Medicaid Services) will be authorized and required to negotiate maximum prices for brand-name drugs that do not have other generic equivalents and that account for the greatest Medicare spending.

There is not yet an official, publicly available list of drugs that Medicare plans to target for negotiations. However Kaiser Family Foundation reports how just a handful of drugs represent the lion’s share of Medicare drug costs. Some likely candidates, based on how much Medicare spent on them in 2020: Eliquis, Xarelto and Januvia.

Today, those brand name drugs that do not have generic equivalents and represent the greatest cost are typically listed as Tier 4 or Tier 5 specialty medications under Medicare Part D coverage.

CMS will begin by negotiating the prices of 10 drugs in 2026, 15 drugs in 2027 and 2028, and 20 drugs in 2029 and each year thereafter. The negotiations would apply first to drugs people get at the pharmacy (Part D), but in the later two years, drugs administered in doctors’ offices (Part B) could also be covered.

If you have any questions or would like for me to review with you your plan benefits please schedule a telephone or Zoom conference convenient for you and direct to my calendar, call us at (518) 346-2115 or send a note to one of our licensed and carrier certified agents closest to you:

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Part D Prescription Drug

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 )

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