The Med Diva

An insider's guide to Medicare Part D and more

Archive for the category “Coverage Gap or Donut Hole”

What They Won’t Tell You about the Medicare Coverage Gap Discount Program

Generic drugs in Coverage Gap

Generic drugs are the best value in any stage of your Part D benefit.

Although many people are opposed to the Affordable Care Act (aka Obamacare) for one reason or another, the law is making Medicare prescription drug coverage more affordable by slowly closing the Coverage Gap.  

This year, if you reach the gap (also called the donut hole), you will get a 52.5 percent discount on brand-name drugs. That’s up slightly from the 50 percent discount on brands in 2011 and 2012. So if your copayment was $50 for a $100 drug last year, your copay will be just $47.50 for the same drug in 2013.

But here’s the catch: Although the Coverage Gap Discount Program is certainly helpful if you reach the Coverage Gap and use brand-name drugs, what you may not know—and what the big drug companies won’t tell you—is that even with the 52.5 percent discount on brand-name prescription drugs, lower-cost generic drugs are still the best bang for your buck in most cases.

For the past few years, the government and the media have all been touting the brand discount as a great way to lower drug costs when you’re in the Coverage Gap. What they should be telling you, however, is although the discount is helpful, the real savings lie in generics, no matter what stage of the benefit you’re in. Using generic drugs whenever possible will not only delay your entry into the gap, but it can even keep you out of it.

I’ve always recommended FDA-approved generic drugs as one of the best ways to lower your drug costs and delay entering the Coverage Gap. Not only do they generally cost up to 80 percent less than brands to begin with, but this year you get an additional 21 percent discount on generics when you’re in the gap (that’s up from 14 percent in 2012). So even with the 52.5 percent discount on brand-name drugs, generics still provide more value for your Medicare dollars.

Closing the Medicare Part D Coverage Gap

You will continue to save on covered brand-name and generic drugs while in the Coverage Gap until the gap is closed in 2020. Here is what you’ll pay for drugs while you are in the gap:

  • 2013: 47.5% for brand-names and 79% for generics
  • 2014: 47.5% for brand-names and 72% for generics
  • 2015: 45% for brand-names and 65% for generics
  • 2016: 45% for brand-names and 58% for generics
  • 2017: 40% for brand-names and 51% for generics
  • 2018: 35% for brand-names and 44% for generics
  • 2019: 30% for brand-names and 37% for generics
  • 2020: 25% for brand-names and 25% for generics

 

 

Will Coverage Gap Discount Disappear if Supreme Court Repeals Affordable Care Act?

Will Supreme Court strike down Coverage Gap DiscountIn the past two years, hundreds of thousands of Medicare beneficiaries with high medication costs have gotten some relief from a provision of the Affordable Care Act aimed at shrinking the Medicare drug Coverage Gap (aka, Donut Hole). Now the big question is whether that provision will stay intact if the Supreme Court repeals the Affordable Care Act.

Under healthcare reform, drug companies have agreed to offer a 50 percent discount on brand-name medications to beneficiaries who are in the Coverage Gap stage of their prescription drug benefit. In addition, the provision gives beneficiaries a 14 percent discount on generic drugs (beneficiaries pay 86 percent of the cost of generics and Medicare picks up the remaining 14 percent).  Those discounts are scheduled to increase until 2020, when a single discount of 75 percent will apply to all prescription drugs. In 2011, 3.6 million Medicare beneficiaries caught in the donut hole saved an average of $604 each on their prescription drugs, according to the U.S. Department of Health and Human Services.

If the law is repealed this week, companies could stop offering the discounts, which would mean that beneficiaries will have to go back to paying 100 percent of the costs for brand-name drugs. And if the law is repealed, Medicare could also stop picking up 14 percent of the tab on generic drugs.

According to recent articles I have read on financial websites, Wall Street stock experts who follow the drug industry aren’t sure whether companies will stop offering the discounts if the law is repealed. As part of the negotiations in the health care debate in 2009, drug makers pledged $80 billion over 10 years to cut the Donut Hold expenses for consumers and help provide funding to cover the uninsured. Drug companies spent a lot of time negotiating the discounts, and so they may be reluctant to throw all that work away.

Of course if drug makers do decide to stop offering the discounts, insurance companies that sell Part D plans could always step in and provide the discount to their members on their own (hint, hint). So far no insurance companies that I know of have announced any plans to help out if the law is repealed and the discounts go away. But I’ll keep you posted if I hear otherwise.

Why women (and men) with Medicare should know about shrinkage

Important Facts about Medicare Part D for 2013

If you’re a fan of Seinfeld, you must remember this classic dialog from the 1994 Hamptons episode, in which George’s girlfriend catches him naked after he gets out of the cold swimming pool:*

Jerry, George Costanza: Elaine!
Jerry: Do women know about shrinkage?
Elaine: What do you mean, like laundry?
Jerry: No, like when a man goes swimming afterwards.
Elaine: It shrinks?
Jerry: Like a frightened turtle!
Elaine: Why does it shrink?
George Costanza: It just does.
Elaine: I don’t know how you guys walk around with those things.

Although I’m going way out on a limb here, I like to think that the Medicare Part D Coverage Gap is also undergoing shrinkage. Albeit, not quite like a frightened turtle – more like a threatened millipede starting to coil up into a ball.

How the donut hole is shrinking

While the entire country is debating whether or not the Patient Protection and Affordable Care Act (ACA) is constitutional, the Medicare Coverage Gap, also called the donut hole, is getting smaller under the public’s radar.

As a result of the ACA, eligible prescription drug plan enrollees who are not Dual Eligibles will pay only 47.5 percent of the costs of covered brand-name drugs in 2013. That’s down slightly from 50 percent this year. If you use generic drugs in the gap (and you should whenever possible), your cost sharing will shrink to 79 percent, from 86 percent in 2012. The Coverage Gap will continue to close a little bit each year, until beneficiaries will pay only 25 percent for both brand-name and generic drugs if they reach this stage.

2013: Three strikes and you’re out

I’m writing this while listening to the Yankees play Tampa Bay on Opening Day, so I couldn’t resist the headline. Basically, what this means is that in 2013, the Centers for Medicare & Medicaid Services (CMS) will alert plan members if their Medicare Part D drug plan or Advantage (Part C) health plan has failed for three years in a row to receive at least 3 out of 5 stars from CMS. If the plan has three strikes, CMS will offer a special enrollment period to allow those members to move to a higher quality plan.

What you will pay for Part D in 2013

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directs CMS to update the parameters for the standard Part D drug benefit each year. These parameters include the standard deductible, initial coverage limit, catastrophic coverage threshold, and minimum co-payments for costs incurred in the Catastrophic Stage.

Following are the 2013 Part D parameters for the defined standard benefit:

  • Deductible: $325  ($320 in 2012)
  • Initial Coverage Limit: $2,970  ($2,930 in 2012)
  • Out-of-pocket threshold: $4,750  ($4,700 in 2012)
  • Minimum cost-sharing for generic/preferred multi-source drugs in the Catastrophic Phase: $2.65  ($2.60 in 2012)
  • Minimum cost-sharing for other drugs in the Catastrophic Phase: $6.60  ($6.50 in 2012)

*The Internet Movie Database

IMDb

Popular brand-drug patent expirations represent $9 billion+ in savings for Medicare beneficiaries

You probably already know that the standard Medicare Part D benefit includes a 50% discount on most brand-name drugs during the Coverage Gap stage.  What you may not know is that even with the discount, lower-cost generic drugs could still help you save more all year long.

Using generic medications instead of brand-name drugs is one of the best ways to lower your overall costs. And here’s even better news: Frequently used brand-name drugs such as Lipitor®, Lexapro®, Seroquel®, and Singulair® are expected to come off patent in 2012. These drugs currently account for more than $31 billion in retail sales. The new generic versions of these drugs could represent more than $9 billion in incremental savings opportunities for Medicare beneficiaries.

Generics are a great choice for savings and quality 

If you’re like me, when you think “generic” you may not always think “quality.” Given the choice of my favorite brand of raisin bran cereal for $3.99 or the generic no-name brand for $2.99, I’ll pay the extra dollar any day. Same goes for brand-name yogurt, shampoo, bread, or body lotion. The brand-name product just seems to taste or work better than the no-name versions.

 But FDA-approved generic drugs have been tested for quality and strength, and are as safe and effective as their brand-name counterparts. Generic drugs look different, but you can expect them to provide the same health benefits as their brand-name counterparts—often at a lower cost to you.

 I always ask my doctor to prescribe the generic drug if it’s available, because I know it will work just as well but cost so much less. In fact, according to the Food and Drug Administration, generic drugs can cost 30 percent to 80 percent less than brand-name drugs.

So if you’re taking a brand-name medication, ask your doctor whether a lower-cost generic drug could work for you. Keep in mind there are two types of generic drugs:

• A generic equivalent contains the same active ingredients as its brand-name counterpart and works the same way in your body.

• A generic alternative may contain different active ingredients, but is used to treat the same condition.

Remember, your doctor wants to help keep your medications affordable, so it’s always okay to ask if the prescription can be written for a generic drug. You deserve to save money, so don’t be afraid to just ask!

New online tool available for comparing Medicare Part D plans

Although I always promote use of Medicare’s Plan Finder Tool during Open Enrollment to help you find the right Medicare Part D plan, today I came across another handy prescription drug plan search tool on the Q1Medicare website. This tool gives Medicare beneficiaries a chance to review all of the different Part D plans available for 2012 for their areas quickly and easily. Plus, it has advanced options to help you further refine your search.

What is the maximum you want to pay?

One of the best features of this tool is the option to limit your search by the maximum monthly premium, annual deductible, and co-payment for generic drugs you want to pay. For example, if you don’t want to pay any more than $50 a month for your premium, you can enter this amount and eliminate all the plans that are out of your budget. You can also select the type of coverage you need in the Coverage Gap (aka, donut hill), such as no coverage at all or coverage for generic drugs.

The tool also allows you to get other information about the plans, such as which plans offer mail service, how many people nationwide (or in your state) are members of the plan, and the number of drugs covered on the plan’s formulary (list of covered drugs). You can also ask the tool to display plans by premium (lowest to highest or vice versa), star ratings, state enrollment, or plan name.    

Remember, Open Enrollment ends early this year – December 7th.  So to avoid a last-minute rush—especially smack in between Thanksgiving and the winter holidays—consider doing your homework now. This new plan comparison tool is a great place to start.

The Medicare Coverage Gap Discount Program:

What the Drug Makers Don’t Want You to Know, Part II

In discussing the Medicare Coverage Gap Discount Program yesterday, I explained why lower-cost generics are still the best way to lower your drug costs—even with the 50% discount on brand-name drugs in the Coverage Gap. Now I’ll share a little-known detail about the Discount Program that could affect you if you’re still using brand-name drugs.

Under the Discount Program, you’re entitled to a 50% manufacturer discount on covered Part D brand-name drugs when you reach the Coverage Gap (aka donut hole). So if the full cost of your brand-name drug is $130, for example, you’ll pay only $65 in the Gap, plus any nominal dispensing fee.

This all sounds wonderful, but we’re dealing with Medicare, so of course there’s a catch: The drug manufacturer has to sign an agreement with the Centers for Medicare & Medicaid Services (CMS) to participate in the program. And guess what? Not all manufacturers are participating in this program.

If a drug manufacturer does not agree to participate in the program:
• Its drugs will not be covered under Medicare Part D.
• Your plan cannot grant a coverage exception if you’re taking one of this company’s medications. 
• If you must take this particular drug, you’ll have to pay full price for it.  

Adding insult to injury

Here’s the real kicker: If you pay the full price for your drug because the manufacturer isn’t participating in the Discount Program, your out-of-pocket costs for this drug will not count toward getting out of the Gap and into the Catastrophic Coverage stage. So you could stay trapped in the Gap longer as you to continue to pay your monthly premium.

What drug manufacturers are participating in the Discount Program?

CMS has tried to be helpful by publishing a list of manufacturers that have agreed to participate in the program. But this listing doesn’t make a lot of sense unless you have a PhD in Med D. You can check it out by clicking here and then clicking on “2011 Labeler Code File” if you’re feeling adventurous. But if your doctor prescribes a new brand-name drug, I suggest you call your plan to make sure it’s covered. If it’s not, there may be a lower-cost generic that will work just as well for you.

Remember: Medicare Open Enrollment is now through December 7, 2011.

The Medicare Coverage Gap Discount Program

What the Drug Makers Don’t Want You to Know, Part I

Although the Coverage Gap Discount Program is no doubt very helpful if you reach the Coverage Gap (aka “donut hole”) and use brand-name drugs, what you may not know—and what the big drug companies hope you never figure out—is that even with the 50% discount on brand-name prescription drugs, lower-cost generic drugs are still the best deal in most cases.

For the past year, nonprofit groups and the media have all been touting the 50% brand discount as a great way to lower drug costs when you’re in the Coverage Gap. What they should be telling you, however, is although the discount is helpful, the real savings lie in generics, no matter what stage of the benefit you’re in. Generic drugs make the most sense in every benefit stage.

I’ve always recommended FDA-approved generic drugs as one of the best ways to lower your drug costs and delay entering the Coverage Gap. Not only do they generally cost up to 80% less than brands to begin with, but now you get an additional 7% discount on generics when you’re in the Gap. (In 2012, you’ll get a 14% discount on generic drugs in this stage.) 
 So even with the 50% discount on brand-name drugs, generics still make more sense.

With the generic version of Lipitor set to hit the shelves in November, let’s compare Mrs. Smith’s costs for Lipitor with Mr. Johnson’s costs for the generic version of Lipitor as an example:

Mrs. Smith Uses the Brand-Name Drug Lipitor
• During the Initial Coverage period, Mrs. Smith has a 25% co-payment on brand-name drugs. She pays $32.25 for a 30-day supply of her brand-name cholesterol drug, Lipitor.
• Mrs. Smith always uses brand-name drugs, so she reaches the Coverage Gap in July. Now she has to fork over $67.08 for Lipitor. This is the full cost of the drug minus the 50% discount!

Mr. Johnson Uses  Generic Drugs
• During the Initial Coverage period, Mr. Johnson pays $3.27 for a 30-day supply of simvastatin, which is a generic version of Lipitor.
• Mr. Johnson always uses generic drugs so he never reaches the Coverage Gap. But if he did, he’d pay only $13.11 for simvastatin. This is the full cost of the drug minus the 7% discount.

I know I’d much rather pay $13.11 for a generic that’s just as safe and effective as its $67.08 brand-name counterpart. I also know the big pharmacy companies are not happy I’m sharing this information with you, because they want you to buy their expensive brand-name drugs. They hope that by playing up the 50% discount, seniors will continue to stick with brands. I hope that having read this, you now know better.

In Part 2 of this series, I’ll share another little-known fact about the Discount Program that doesn’t make any sense at all.

Reminder: Open Enrollment for 2012 is October 15 through December 7, 2011.

Saving Money with the Mail-Order Pharmacy: Give it a Try!

Open Enrollment for 2012 is October 15 through
 December 7, 2011.

  You may recall a very popular 1970s TV commercial for Life Cereal, in which two brothers are discussing “some cereal” that’s “supposed to be good for you.” Neither wants to give it a try, so they push it toward their little brother, Mikey. Turns out little Mikey, who supposedly hates everything, really likes it.

For many seniors enrolled in Medicare prescription drug plans, a similar scenario often plays out. You may be constantly bombarded by letters from your plan telling you that switching to a mail-order pharmacy is good for you because it will help youlower your out-of-pocket costs and delay entering the Coverage Gap (donut hole). But you’re reluctant to give it a try for various reasons (procrastination, perhaps?) so you toss the information in the garbage.

I have to admit I was a little hesitant to try my mail-order pharmacy at first, simply because I didn’t want to deal with the paperwork involved. I thought it would be a hassle to switch my one prescription from my favorite retail pharmacy, but when I used my plan’s price comparison tool on its website and discovered I would pay $100 less a month with mail, I immediately made the switch. 

Guess what? It wasn’t a hassle at all! The customer service rep did all the work for me–she even called the doctor with my permission to get my prescription–and in a few days my medication arrived in a secure package in my mailbox.

Today I have nothing but good things to say about my mail-order pharmacy. I can order up to a 3-month supply of my medication for a lot less money than a 30-day supply at the local pharmacy. My drugs arrive in my mailbox, so I don’t have to drive to the pharmacy and use up gas or wait 15 minutes in line. (There’s never a line at my mailbox!)

If I have to work late, I don’t have to worry about the pharmacy closing before I get home — after all, my mailbox never closes!  And If I have a question about my medication I can call my plan and talk to a pharmacist any hour of the day, for as long as I want, without having to worry that I’m holding up the line. Best of all, my mail-order pharmacy sends me automatic refill reminders by e-mail, and I can order refills online.

I like to tell my friends and family that switching to mail order is like the switch we all made from typewriters to computers. Many of us were reluctant to try computers because switching required us to change our ways and learn a new skill. But wasn’t it wonderful once we got the hang of the Internet, e-mail, word processing, and Facebook? We like it! Hey Mikey!

Countdown to Medicare Part D Open Enrollment: Day 7

Open Enrollment for 2012 begins on Saturday, October 15, and ends on Wednesday, December 7, 2011.

Day 7: The Medicare Part D Coverage Gap Discount Program helps you save when you’re in the donut hole 

 The Affordable Care Act, otherwise known as Obamacare, includes provisions to close the Medicare Part D Coverage Gap (aka “donut hole”) to help lower prescription drug costs for Medicare beneficiaries. One of the major provisions is the Coverage Gap Discount Program, which went into effect January 2011. According to the Centers for Medicare & Medicaid Services, more than 1.7 million Medicare beneficiaries had taken advantage of program through August 31, 2011, resulting in a total savings of almost $930 million.

 Under the Discount Program, if you have Part D coverage but don’t get Extra Help from Medicare, you get a 50 percent discount on “applicable” brand-name drugs if and when you reach the Coverage Gap.  This discount applies at either retail or mail-order pharmacies, but does not include the cost of the pharmacy dispensing fee.  Another good thing is that the full cost of the drug counts toward your out-of-pocket spending, which helps you move out of the Gap and into the Catastrophic Coverage stage.

 In addition, this year you’ll pay only 86 percent of the total cost of generic drugs and supplies used for the delivery of insulin when you’re in the Gap.  

How the Coverage Gap Discount Program works

 Let’s say you have reached the Coverage Gap and go to your pharmacy to fill a prescription for a brand-name drug, such as Diovan®. The full price of Diovan at this pharmacy is $50 and the dispensing fee is $2. Once the 50% discount is applied, the price of Diovan is now only $25. The pharmacy charges a $2 dispensing fee, so your total cost for the medication would be $27. The entire amount, however–$52–will be counted as out-of-pocket spending and will help you move out of the Gap.

Who is eligible for this savings while in the Coverage Gap?

You must meet all of the following criteria to be eligible for discounts under the Medicare Coverage Gap Discount Program:

  • You are currently enrolled in a Medicare prescription drug plan (PDP) (including employer-sponsored plans called Employer Group Waiver Plans), or a Medicare Advantage Plan that includes prescription drug coverage.
  • You do not get Extra Help from Medicare for your prescription drug costs.
  • You have reached the Coverage Gap stage of your benefit.
  • You fill a prescription for a covered brand-name drug.

If you are fortunate enough to be enrolled in a Part D plan that don’t have a Coverage Gap stage, you’ll still be eligible to get a discount on brand-name prescriptions once you reach the defined standard initial coverage limit (ICL). In 2012, the standard ICL is $2,930

In coming weeks I’ll explore the Discount Program further, and tell you some things the drug makers don’t want you to know about it.

Countdown to Medicare Part D Open Enrollment: Day 9

Open Enrollment for 2012 begins on Saturday, October 15, and ends on Wednesday, December 7, 2011.

Day 9: Making a list and checking your Part D plan twice

With the Fall Open Enrollment period quickly approaching, it’s time to review your current Medicare prescription drug plan and make a list of questions you’ll need to ask if you choose to look for a new plan.

As I’ve shared with you before, it’s super important to review your Part D plan every year, because private Medicare plan sponsors can change their costs and the list of drugs that they cover every year. And even if you’re happy with your current plan, you should still check every to see if there is another plan in your region that offers a lower total cost for your medications.

To help you find the best plan for you, here is a list of questions you should always ask when comparison shopping:

• How large is the plan’s formulary? You want to make sure the plan offers a comprehensive formulary (list of covered drugs) that provides coverage for the majority of commonly prescribed medications.
• Are my drugs covered? Next, check to see that the drugs you take on a regular basis (at least 3 months or more) are covered under the plan’s formulary.
• Does the plan pay any of my costs during the Coverage Gap stage? During the Coverage Gap stage (donut hole), you are responsible for paying most of your drug costs. Some plans, however, offer additional coverage in the Gap, which could help you save money if you take many medications. Types of additional coverage can include:
     o Low co-payments for generic drugs when you use a retail pharmacy
     o $0 co-payments for generic drugs when you use a mail-order pharmacy
     o Full coverage in the Gap (a few plans, such as some employer-sponsored plans, do not have a Coverage Gap stage)
• Does the plan have a mail-order pharmacy with free delivery? Not only is mail order with free home delivery very convenient if you’re taking medications on a long-term basis, but mail-order pharmacies often cost significantly less than a retail pharmacy. (For example, you may be able to get a 3-month supply of drugs by mail for the same price as a 1-month supply at a retail pharmacy.)
• Can I compare my drug prices online? Many plans have cost-comparison tools on their websites, which let you compare your drug costs with available lower-cost medications that may also be right for you.
• Does the plan offer Coverage Gap alerts? Some plans offer notifications by e-mail, phone, or website to let you know how close you are to the Gap and how you can save on the medications you take regularly.

Tomorrow I’ll tell you about some programs that are available to help you pay for your prescription drug costs if you have a limited income.

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