Help Your Parents Cut Their Prescription Costs — Before Dec. 7
Online Medicare tool could save them thousands of dollars in 2022
Between now and Dec. 7, every adult child with a parent enrolled in Medicare has a chance to help them save hundreds, if not thousands, of dollars on what they spend out of pocket for prescription drugs.
While Medicare Part D provides valuable insurance coverage for prescription drugs, enrollees can still face stiff copays and coinsurance costs, depending on their prescription meds.
Medications’ big bite of retiree spending
There’s no annual out-of-pocket max for prescription drug costs under Part D. Even after reaching the “catastrophic” level of spending ($7,050 in 2022) an enrollee will continue to be responsible for 5% of their medication costs.
A recent analysis by the Kaiser Family Foundation estimates that 1.5 million Medicare enrollees in 2019 had out-of-pocket drug costs that landed them in the catastrophic stage. In 2009, fewer than 400,000 enrollees reached the catastrophic spending stage for that year.
Medicare open enrollment period: Switch to a better Part D plan
People enrolled in Original Medicare must purchase a separate Part D insurance plan from a private insurer. People enrolled in Medicare Advantage have Part D typically rolled into their plan.
Whichever route a user of Medicare has taken, each fall they have the opportunity to shop for the best Part D coverage. From Oct. 15 to Dec. 7, they can move to another plan for the coming year.
Very few enrollees bother to comparison shop for their government health insurance. Which can be costing them plenty. A plan that worked great when they enrolled five or 10 years ago and took one generic drug might not be the best option now if they have more meds. Moreover, the private insurance companies are allowed to change what they charge for a given drug. A drug an enrollee has been taking for years and paying little or nothing in a copay can suddenly cost more, because the plan changed how it reimburses for it.
Spend no more than five minutes talking to insurance agents who specialize in helping enrollees shop for Part D plans, and you will hear stories of clients who had stuck with a plan out of convenience (or inertia), when there was a better plan they could have enrolled in that saved them $2,000 or more a year because it provided better coverage of their specific drugs.
How to shop online for 2022 Medicare Part D plans
Some very good news is that it is not hard to find the best drug plan for a Medicare enrollee.
At the official Medicare website, there is a free online tool where you plug in a zip code and every drug you are taking, and then get a rundown of plans available and the projected cost.
You can also get help from an independent insurance agent who specializes in Medicare. Or contact your State Health Insurance Assistance Program to find counselors who can help you sort through options.
Shopping tip: Medicare Part D for Original Medicare enrollee
An enrollee in Original Medicare buys a separate Part D insurance plan, which means there’s a monthly premium to pay.
It’s human nature to be focused on plans with low premium costs. But for someone with just a few meds, that can end up costing them more than a higher premium plan. The key is to understand the copay or coinsurance that will be charged each time the prescription is filled.
A Medicare Part D plan with a $50 monthly premium that charges no copay for a parent’s two drugs will cost them less than a plan with a $10 premium that charges a $25 copay for two medications.
And if you have two parents enrolled in Medicare, make sure you shop each one separately. Their individual medication needs could mean that different Part D plans are best.
Shopping tip: Medicare Part D for Medicare Advantage enrollee
For a parent enrolled in a Medicare Advantage plan, there is no separate Part D plan. The Part D coverage is embedded in the overall Medicare Advantage plan. That makes shopping and switching more complicated, as you must switch to an entirely new plan.
Ask your parent what they are spending out of pocket for their prescription drugs. If it’s a significant amount, you can use the same tool at Medicare.gov to shop for a Medicare Advantage plan that is a better fit (less costly) for their specific medications.
The challenge with Medicare Advantage plans is if you find one that will be a better deal for prescription drugs, you must then take a deep dive into whether that plan also gives your parent access to the doctors and facilities they currently use, and whether the copay/coinsurance for medical care and hospitalization is not more than their current plan.
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