Welcome to the second part of my step-by-step guide for evaluating my mom’s Medicare choices during the 2017 annual Medicare Open Enrollment. In this blog post, I will be presenting how I evaluate the stand-alone prescription drug plans (Medicare Part D). My mom needs prescription drug coverage because she does not have “credible” coverage from other sources (e.g., former employers, Veteran’s Administration, TriCare). My mom currently has a Part D stand-alone prescription drug plan (SilverScript Choice). If you haven’t already read “BB’s Medicare Open Enrollment: Where Do I Begin”, I strongly recommend that you do so before proceeding in this blog post. Furthermore, if you are reading this post, I assume that you have decided that you need a Medicare Part D stand-alone prescription drug plan and want to take a look at your available plans.
Before I begin, I need to vent a bit and let you in on a little secret—I hate, absolutely hate, having to do this evaluation every year! I do it because if I don’t my mom would not get the best price for the drugs she has to take. I hate the fact that most Medicare beneficiaries are incapable or unwilling to go through this evaluation. Medicare beneficiaries must constantly chase after the best combinations of Medicare plans and policies every year just so that insurance companies can continue to jockey for market share and income. Medicare Part C and Part D plans are designed for the benefit of health insurance companies and not for the benefit of Medicare beneficiaries who only need one great Medicare program. Now that I feel better after venting, let’s proceed to the reality of our present situation.
My Mom’s Priorities for the Stand-Alone Prescription Drug Plan
For my mom, minimizing total out-of-pocket cost is the number one priority when choosing a plan. Although my mom does not qualify for Extra Help in paying for her premiums, deductibles or cost-sharing, her annual income is still below $20,000 and therefore every dollar that can be saved must be. In the next two blog posts, I will show you how I get to these choices.My mom takes six generic prescription drugs and she has never spent enough on drugs to put her into the Part D coverage gap (also called the “doughnut hole) let alone into catastrophic coverage (thank you, Lord). As you can see in the figure below, Medicare Part D coverage requires a substantial amount of out-of-pocket spending, especially when the cost of drug spending exceeds $3700.
My Mom’s Part D Stand-Alone Prescription Drug Plans
As I described in my first blog post of this series, my mom has 23 stand-alone prescription drug plans available to choose from in her zip code. Let’s take a look at the information provided on the government’s website and my plan of attacking it:
- I select how I will sort the 23 plans I have available to me. My sorting options are shown in the figure below. Because cost is my number one priority, I choose Lowest Estimated Annual Retail Drug Cost. I could have also chosen Lowest Estimated Annual Mail Order Drug Costs.
2. I look over the information provided and select criteria for consideration. The two cheapest plans for my mom’s particular set of Part D stand-alone prescription drug plans are shown in the figure below (to give you a sneak preview–one of these two plans will be my final choice). A person with a different drug list would likely have two different plans in the two cheapest slots since each plan is designed to capture a particular subset of the market. All 23 plans on my list are not expecting to entice me in.
I have identified three pieces of data in the above figure that I will be using for my evaluation: (1) what the annual cost will be for the retail pharmacies I have picked and for mail order, (2) making sure all of my mom’s drugs are on the plan’s formulary, and (3) overall star rating (a five star “quality” rating system defined by our government). The annual costs include the premium, deductible, copays, and coinsurance paid. It should be noted that the copay/coinsurance amounts are only applied in the initial coverage (see the figure above) part of the plan. From my standpoint, I am interested in spending the least amount of money for my mom to get the drugs she needs. The other two measures identified above; namely, the formulary and the star rating are secondary considerations, but might alter my final pick.
Getting a Lay of the Land
While I will probably go with either the cheapest or the second cheapest plan, I still look over all 23 plans to get a lay of the land. Many of the plans are designed for people who are willing to pay higher premiums for extra insurance in the coverage gap just in case they might need it in the uncertain future. Since I cannot predict my mom’s future prescription drug needs, I choose to buy the best value based on what she presently takes.
Of the 23 stand-alone prescription drug plans I have available, two are under a sanctioned cloud and cannot take on new members. As an aside, my mom had one of the sanctioned plans a couple of years ago and had no problems with it when it had a three star rating. Looking over the remaining 21 plans, I see annual retail (mail order) costs that range from a low of $526 ($482) to a high of $2,131 ($2, 131) with premiums ranging from $15 to $153. Deductibles are either $0 or $400 (with a couple in between).
I also determined that the 21 stand-alone prescription drug plans on my mom’s list are provided by only nine different companies with each offering two or more plans. These companies are intimately woven together as the lines between pharmacy benefit management companies (e.g., Express Scripts and SilverScripts), pharmacies (e.g., CVS), and health insurance companies (e.g., Aetna) blur. For example, Symphonix is owned by UnitedHealthcare and together they have four plans on the list. My 21 stand-alone prescription drug plans suddenly became a lot fewer to evaluate.
It should also be noted that two of the companies represented are owned by pharmacies–SilverScript is owned by CVS Health and EnvisionRx is owned by Rite Aid. I keep all this corporate information in mind when selecting the two retail pharmacies I input for generating my comparisons.
Not All Retail Pharmacies are Created Equal
Every Part D stand-alone prescription drug plan on my mom’s list has a pharmacy network where coverage is accepted. In addition, most of the plans make special arrangements with a subset of the network pharmacies that, if you use them, will result in the lowest out-of-pocket costs. This practice of having lower prices at one (or possibly two) pharmacies in the network is called preferred cost- sharing. The plan negotiates for lower prices at select pharmacies by assuring that pharmacy it will get higher volume sales if its price is slightly lower. If you see the words preferred cost-sharing (see the figure below), then be on the look-out for the pharmacies you must go to for lowest pricing. All other networked pharmacies will deliver the network’s standard cost-sharing prices (which are still lower than retail prices).
Remember that if your chosen pharmacy list does not contain the preferred pharmacy that goes with a plan, then you will not see that plan’s lowest prices. I recommend that you click on Update Search (see below) and try different combination of pharmacies to generate additional search results.
Sometimes the plan name tells you which pharmacy is the preferred pharmacy. At AARP MedicareRX Walgreens, annual costs for my mom would be $817 at Walgreens and $4033 at CVS. This plan really does not want you to go to CVS! For the Humana Preferred Rx plan, the difference between a preferred pharmacy (WalMart) and a standard network pharmacy (CVS) annual cost is $68 ($781 versus $849).
Plans that use a preferred cost-sharing design do not necessarily give you the lowest prices as can be seen for the two lowest cost Part D stand-alone prescription drug plans (both standard cost-sharing plans) in my mom’s search. These two plans provide the lowest prices without limiting me to any particular pharmacy. Even when a plan advertises as a standard cost-sharing plan, cost from one retail pharmacy to the next varies. For example, in the Wellcare Classic plan, my mom’s annual costs are $526 at CVS and $640 at Walgreens and in the Silverscript Choice plan, $670 at CVS and $710 at Walgreens. My mom’s costs would be lower at CVS (the parent company of Silverscript) if she went with the Wellcare Classic plan rather than Silverscript Choice. Obviously Silverscript wants to keep more of the profits in house!
We are almost there! Read how I complete my evaluation in Zeroing In On The Cheapest Medicare Part D Plan where I will look at plan formularies and the star rating system. As I have already said above, my choice will be one of the cheapest plans available.
Where To Get Unbiased Medicare Plan Advice
BB’s Medicare Open Enrollment: Where Do I Begin –how to navigate the government’s Medicare Plan Finder website
Zeroing In On The Cheapest Medicare Part D Plan –assuming mom stayed with original Medicare
BB’s Medicare Open Enrollment: Medicare Health Plan Choices –BB collects information about the Medicare Advantage plans available to her mom
Evaluating Medicare Choices For Mom–Conclusions –learn why my mom chose to stay with original Medicare + Medigap F policy + the cheapest stand-alone Part D plan instead of changing to Medicare Advantage