Friday, September 4, 2015

When to use prescription discount programs and when not to use them

Many pharmacies, including many grocery store pharmacies, offer deeply discounted prescription drug prices to help you save money on your prescriptions. In some instances, the loyalty program drug prices are close to or less than the amount of your Medicare Part D copay. Purchasing through the loyalty program may be a good option for some people, but it isn’t always the best choice for everyone.

Here’s why. It all depends on whether you are likely to end up in the Medicare drug coverage gap, often called the donut hole. If you take a minimum number of prescriptions and getting your prescriptions filled through a discount loyalty program means that you will never reach the donut hole, it may be beneficial to use your pharmacy’s loyalty program.

However, if you are heading toward the donut hole, you may want to take a different approach.

Most Medicare drug plans include payment tiers or limits. The first tier is called Initial Coverage. In this tier, you and your plan pay up to $2960. This dollar amount is based on the total cost of your medications, including plan contributions and copays. Once the total of your plan contributions and your copays have reached the $2960 amount, you enter the Coverage Gap or Donut Hole. While in the coverage gap, you will pay a larger share of your prescription drug costs up to $4700. This $4700 is made up of your out-of-pocket expenses only. Once you get out of the donut hole and into the Catastrophic Coverage tier, you will only pay a small coinsurance amount or copayment for covered drugs for the rest of the year. In this case, as tempting as that $4 copay is, you should still use your Part D plan to pay for your prescriptions.

The coverage gap is set to close in 2020. Until then, filling prescriptions outside of your plan may count against you if you have large prescription drug bills and need to get out of the coverage gap and into catastrophic coverage.

Have questions about this? Contact me at Mutsko Insurance Services, LLC.
Email me or call 440-255-5700 today for an appointment.

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