The high cost of prescription drugs is a major issue for many people, especially older adults.
“The cost of prescription drugs is one of the top concerns of Medicare beneficiaries, many of whom live on a fixed income,” says Whitney Stidom, vice president of sales and operations with eHealth, Inc., a health insurance broker and online resource provider headquartered in Santa Clara, California.
Although Medicare has made efforts recently to lower the cost of some prescriptions, there are some strategies you can use to help lower your out-of-pocket drug costs in the meantime.
Here are seven ways to save money on prescription medications.
[Read: Medicare Fall Open Enrollment: What You Need to Know.]
1. Select the Right Medicare Advantage or Medicare Part D Plan
One of the first things you should look at when enrolling in Medicare is whether the plan you’re considering will cover your personal prescription drug regimen.
Medicare consists of several parts, with Parts A and B constituting “original Medicare” and covering health care services rendered in a doctor’s office or hospital, but not prescription medications you’d use at home, Stidom explains.
If you want that prescription drug coverage, you’ll need to purchase a Medicare Part D prescription drug plan or enroll in a Medicare Advantage plan that includes prescription drug coverage.
Medicare Advantage plans, which are approved by Medicare but offered and administered by private health insurance companies, provide “all-in-one coverage,” meaning they “typically include Part A, Part B and often Part D,” says John Mastronardi, executive director of the Nathaniel Witherell, a long-term skilled nursing care facility in Greenwich, Connecticut.
And there can be significant costs differences depending on whether you select a Medicare Advantage plan or original Medicare (Parts A and B) with an add-on Medicare Plan D option.
For example, many Medicare Advantage plans offer fixed monthly premium rates that may be lower than original Medicare premiums, but that lower upfront cost could come with higher out-of-pocket costs, such as copays and deductibles, Mastronardi explains.
“It’s absolutely vital to make sure that your Medicare Advantage plan or Medicare Part D plan covers the prescription drugs you need at a cost that affordable for you,” Stidom adds. “If you pick a plan that doesn’t meet your needs, you could end up needlessly spending hundreds of extra dollars per year.”
[Read: Best Insurance Companies for Medicare Part D Prescription Drug Plans.]
2. Review Your Selections Each Year During Open Enrollment
Which drugs are covered and how much coverage you get for a particular drug can vary significantly from one plan to the next, Stidom notes.
And not all drug plans are created equal.
“Medicare requires that plans cover at least two medications in each therapeutic category, but the plans get to decide which medications those are and the cost sharing for each,” Stidom explains.
What’s more, “your coverage can also change one year to another, which is why you should review your options every annual enrollment period,” she adds.
During the annual enrollment period, which begins on October 15, you can adjust your coverage if your plan’s drug formulary — that’s the list of medications it covers — changes or if your health needs change and you need a specific medication going forward.
[READ: How Do You Apply for Medicare?]
3. Go Generic
Newer, brand-name medications are usually much more expensive than older, generic medications, so switching to a generic version of a medication — if it exists — could save you a lot of money.
“Not only are generics generally lower cost, but more often than not, they are available at a lower-tier cost, and some plans waive the prescription deductible for certain prescription tiers,” Stidom says.
Your Medicare prescription plan may require you to opt for the generic version of any medication your doctor prescribes. If you have the choice of a brand-name medication, however, ask your doctor or pharmacist whether there’s a generic option you can get instead.
4. Explore Lower-Cost Pharmacies and Programs
There are many ways to get prescriptions these days, and some insurance plans offer multimonth subscription options for filling those scripts.
Other companies may offer lower prices and ways for consumers to reduce their spending on commonly used medications as well. Some places to look for lower-cost or bulk prescription rates include:
— Amazon’s Pharmacy RxPass. This subscription savings program is open to Prime members who have Medicare, and it offers unlimited access to 60 eligible prescription medications for $5 per month plus free delivery.
— Costco. In partnership with eHealth, Costco offers plans that could save you money on prescription medications.
— GoodRx. GoodRx allows you to see in a single place what various pharmacies near you are charging for the same drug. (Pharmacies charge varying prices for drugs based on what’s been negotiated with pharmacy benefits managers.) GoodRx makes comparing prices easier and also provides access to coupons and discounts offered by drug manufacturers.
Some drug manufacturers also offer patient assistance programs or coupons for discounts on certain medications. Ask at the pharmacy or search online for the medication you need to see whether the manufacturer offers these cost-saving options.
5. Leverage State Pharmaceutical Assistance Programs
Many states offer help in paying your drug plan premiums and covering the cost of prescriptions and other drug costs via a State Pharmaceutical Assistance Program. Each state has its own criteria for these programs, and not all states have them, so you’ll have to search for your state on Medicare’s web page dedicated to these programs to learn what’s available in your area.
For example, in Georgia, New Jersey, Idaho and several other states, you must have HIV or AIDS to qualify for the program. In Maine and Texas, however, eligibility criteria is based on age, income and other factors.
6. Apply for Extra Help
A joint program of Medicare and Social Security, Extra Help is a way for people with limited income and resources to get assistance affording their prescriptions. If you qualify for this program, in 2024, you’ll pay no more than $4.50 for generic covered drugs and no more than $11.20 for brand-name covered drugs.
To apply for this program, you’ll need to submit bank statements and tax returns, IRA and 401K account balances and statements related to any pension, veteran and railroad retirement board benefits or annuity payments you receive.
7. Do Your Homework
It’s worth the effort to do the research and read all the plans.
“Finding the most affordable plan for your prescription drug needs can go a long way to keeping you satisfied with your Medicare coverage,” Stidom says.
You can also get help in selecting the right Medicare coverage for you by contacting your State Health Insurance Assistance Program. These state-administered organizations offer free and unbiased counseling and assistance to Medicare-eligible individuals and their families and caregivers. Working with one of their highly trained volunteer specialists can help you wade through the myriad options to find the best prescription drug plan for your budget.
What to Know About Medicare’s New Prescription Drug Law
A new prescription drug law went into effect on January 1, 2023, aimed at improving access to affordable treatments and strengthening the Medicare program. Several provisions of that law could lower the cost of certain medications for you:
— Expanded vaccine coverage. For those who have Part D, you’ll now pay nothing out-of-pocket for an expanded range of vaccines, including shingles, whooping cough and others.
— Lower insulin costs. Medicare drug plans can’t charge more than $35 for a one-month supply of Part D-covered insulin, and you don’t have to pay a deductible. If you use an insulin pump covered under Medicare Part B’s durable medical equipment benefit or via a Medicare Advantage plan, a monthly supply of insulin is also limited to $35, and the standard Part B deducible doesn’t apply. Medigap plans, supplemental insurance that may cover Part B coinsurance fees, should cover the $35 or less cost for insulin.
— Lower out-of-pocket drug costs. If prices on certain medications have risen higher than the rate of inflation, you may qualify for a lower coinsurance payment through your Part B Medicare coverage. The drugs and potential savings change every quarter, so read the fine print or talk with your doctor and pharmacist.
— Elimination of copayments at catastrophic threshold. Starting in 2024, Medicare beneficiaries whose drug costs were high enough to reach the catastrophic coverage phase of your Medicare drug coverage won’t have to pay a copayment or coinsurance. In 2024, spending $8,000 out of pocket triggers catastrophic coverage, and you’ll pay nothing for covered Part D drugs for the rest of the calendar year.
— Expansion of Extra Help coverage. Starting in 2024, the Part D Low-Income Subsidy program expanded to cover more drugs costs for people earning less than 150% of federal poverty levels. (In 2024, the income limit for an individual is $22,590 and the resource limit is $17,220. For a married couple, the income limit is $30,660 and the resource limit is $34,360.) If you qualify for this program, you’ll pay no more than $4.50 for each generic drug and $11.20 for each brand-name drug you use.
— Out-of-pocket cost cap starting in 2025. Starting next year, your yearly Part D out-of-pocket costs will be capped at $2,000. Beneficiaries will also have the option to pay those costs in monthly installments over the plan year rather than all at once.
Medicare’s Ongoing Brand-Name Drug Price Negotiation Efforts
As part of the 2023 law, Medicare is now able to negotiate directly with manufacturers to lower the prices of certain high-spending brand-name Medicare Part B and Part D drugs that don’t have competition. These first 10 drugs will have newly negotiated prices in 2026:
— Eliquis, an anticoagulant used to prevent blood clots
— Jardiance, a Type 2 diabetes medication used to control blood sugars
— Xarelto, a blood thinner used to treat and prevent blood clots
— Januvia, a Type 2 diabetes medication
— Farxiga, a Type 2 diabetes medication
— Entresto, a heart medication used for chronic heart failure
— Enbrel, a biologic used to treat some autoimmune disorders
— Imbruvica, a medication to treat chronic lymphocytic leukemia/small lymphocytic lymphoma in adults
— Stelara, an immunosuppressant used to treat psoriasis and psoriatic arthritis
— Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen and NovoLog PenFill, a type of insulin used to treat Type 1 and Type 2 diabetes
Medicare will continue negotiating costs on 15 to 20 Part B- and Part D-covered drugs each year going forward, so the list of brand-name drugs that are included will continue growing in 2027 and beyond.
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