Answers to commonly asked questions about prescription drug plans
By Caroline Ward
The cost of prescription drugs in the U.S. has skyrocketed in recent years. Often, seniors must choose between paying a utility bill or buying their medication. If you are helping loved ones on Medicare manage their medications, you probably have a lot of questions.
Below are answers to a few of the most common concerns.
- How are prescription drugs covered by Medicare? If your loved one has Original Medicare or a Medicare Supplement Insurance (Medigap) policy, then they will need to add a prescription drug (Part D) policy. However, if they have a Medicare Advantage plan, the prescription drug coverage is included. This does NOT mean that the cost of drugs is included, only that you can purchase the drugs at the Medicare rate.
- Can we choose between generic and brand drugs? Yes, but generic drugs always costs less than brand.
- Do we get discounts with Medicare? Medicare has negotiated rates with pharmaceutical providers. But, no, there is not a standard Medicare discount. Individual drugs vary in price with different plans.
- Do we get to choose our pharmacy? Yes, but you will save money by using a preferred pharmacy.
- Are the costs the same with all Medicare plans? No, the drug costs vary widely. It is important to compare drug costs when choosing a Medicare plan.
- Is there a deductible before Medicare pays? With the stand-alone Part D prescription drug plans there is almost always a deductible. In 2023, the deductible can be as high as $505. With most plans, however, the deductible only applies to drug tiers three and above.
- Does Medicare pay for vitamins and supplements? No.
- Is there an annual out-of-pocket maximum cost on prescription drugs? Unfortunately, no. But there are lower catastrophic drug rates when a person spends a certain amount on prescription drugs in a calendar year.
- Are discount programs available? Yes, discounts are available based on income. You can check with Social Security to find out if your loved one qualifies for a Part D Low-Income Subsidy. This is also called “Extra Help.”
- What is the “donut hole”? The “donut hole” is the Part D coverage gap where there is a temporary limit on what a drug plan will pay. In 2023, when the total cost of an individual’s prescription drugs (copays plus what the insurance carrier pays) reaches $4,660, the person will go into the donut hole and will have to pay 25% of the retail price of each drug until reaching the donut hole limit of $7,400. At that point, the person enters the catastrophic phase and pays a minimum amount for drugs.
- Must we use Medicare insurance to purchase prescription drugs? No, you can shop for the lowest cost on drugs through pharmacy discount programs and online pharmacies. Just be careful that you are purchasing drugs from a credible source. You can verify your source through the FDA website (fda.gov) under “BeSafeRx.”
Caroline Ward is an independent senior insurance advisor. Learn more at AskCaroline.net.
