What to Look for in a Medicare Prescription Drug Plan

 

Background

  • Approximately 43 million or 72% of the people on Medicare are enrolled in Medicare-approved Prescription Drug Plans (PDP)
  • If you have Original Medicare (with or without) a Medigap plan, you likely need a PDP to have drug coverage and avoid a future penalty.
  • You need to have a PDP from the month that you were initially eligible for Medicare, or 2006 when PDPs were first established.
  • Most Medicare Advantage Plans include prescription drug coverage along with medical coverage.
  • There are no annual maximum out-of-pocket prescription drug expenses for either Medicare Advantage or stand-alone PDPs. Original Medicare & Medigap plans do not cover prescription drug expenses.
  • Medicare-approved stand-alone PDPs are sold primarily by large, for-profit insurers such as Aetna, Cigna, CVS, Humana, and United HealthCare. Medicare enters into contracts with private insurers to provide PDPs that meet specific requirements. In return, the private insurers receive over $83 billion a year in taxpayer subsidies for PDPs.
  • Private insurers are also allowed to charge subscribers plan premiums, deductibles and co-pays/co-insurance for medications. They can also exclude specific drugs from their formulary, establish restrictions: such as requiring prior insurer authorization, limit medication quantities and require that subscribers take lower-cost drugs before higher-cost drugs.
  • Each insurer establishes their own drug classifications into pricing tiers and there are significant differences among PDPs regarding the drugs that are excluded/included and the premiums, deductibles, co-pays/coinsurance that subscribers are required to pay.
  • Although PDPs are not allowed to deny coverage or charge higher premiums to subscribers with pre-existing conditions and chronic diseases, insurers have latitude in establishing restrictions and subscriber charges.
  • Unlike the rest of the developed world, in the USA there is no public insurance for medications or government negotiation of drug prices with the exception of the VA. As a result, the cost of medications in the United States, to treat millions of Americans with life-threating diseases such as diabetes, cancers, multiple sclerosis, Hepatitis B, inflammatory diseases, respiratory diseases, organ transplants are the highest in the world. The cost of medications has become a huge burden on taxpayers; federal, state and local governments; employers; patients and families. This results in more costly health care with poorer outcomes, increases in disability, reduced work productivity and becomes a major cause of personal bankruptcies in the USA.
  • Medicare Quality Star Ratings -Medicare uses a Quality Star Rating System to measure how well Medicare Advantage and Part D plans perform. Medicare scores how well plans perform annually in several categories including quality of care and customer service. Ratings range from Poor (1 star), Below Average (2 Stars), Average (3 Stars), Above Average (4 Stars) and Excellent (5 Stars). Details of specific PDP and Medicare Advantage plan ratings are published on Medicare.gov.

A review of major insurers and their 23 PDPs in Upstate New York including plans by Aetna, Cigna, Express Scripts, Humana, SilverScripts, United HealthCare (UHC)  and WellCare reveal the following observations.

  • Each insurer generally offers 3 plans with different premiums and deductibles. Premiums range from $15.50 a month with a $415 deductible (WellCare Value Script) to $92.50/mo. with a $350 deductible (Express Scripts Medicare Choice)
  • Seven plans have no deductibles with premiums ranging from $39.70/mo.                    (SilverScriptsChoice) to $80./mo.(Humana Enhanced & SilverScript Allure).
  • The Medicare Quality Star ratings of plans vary from 3.5/5 Stars ( 3 SilverScript plans & UHC AARP Preferred) to low-rated plans (EnvisionRx Plus 1.5/5 & three Cigna plans 2/5 Stars). Other plans offered by Aetna, Humana, WellCare, and two UHC plans each received a 3 Star rating.
  • All insurers have developed strong financial disincentives for subscribers who use “non-preferred” brand name and generic medications by establishing medication exclusions, deductibles and up to 50% co-insurance for Tier 4 drugs.
  • Many insurers also charge higher prices for standard pharmacies and 30-day supplies with lower prices for “preferred” retail and mail-order pharmacies. However, many consumers and health care providers are unaware of what pharmacies are preferred and the cost differences that can be substantial.

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  • There are significant differences among insurers in the number of brand name and specialty drugs that are excluded in their formularies. Some diseases including rheumatoid arthritis, multiple sclerosis, diabetes and various neurological, cardiovascular, inflammatory, autoimmune and respiratory diseases have higher-cost Tier 4 & 5 medications and more excluded drugs than other conditions. This creates major conflicts among insurers, physicians and patients.
  • The co-insurance rate for Tier 4 “non-preferred generic and brand” medications in many cases is double the co-insurance rate for more costly Tier 5 specialty drugs. Many plans exclude specific medications or place them in Tier 4, that are used to treat common conditions such as diabetes, inflammatory, autoimmune and cardiovascular diseases in favor of other specific drugs sold by competitor drug companies. Insurers have increased “excluded medications” by 160% in the past 4 years and boast about saving billions of dollars each year by reducing access to treatment and raising patient expenses.

Differences in Subscribers Satisfaction with Plans

One dimension of Medicare’s quality ratings is the analysis of subscribers’ level of satisfaction with their specific PDP or Medicare Advantage plan. Medicare looks at a number of areas including quality of services and customer service. Two area that are important to look at include turnover rates (the percentage of subscribers who leave the plan) and the major reasons for leaving. The following analysis focuses on 23 PDP plans sold in Upstate New York.

SilverScript

  • SilverScript’s three plans: Choice ($37.90), Plus ($73.80) and Alure ($80/mo.) stand out from other plans in that they all have a 3.5/5 Star rating; none have deductibles and they have a low subscriber turnover rate of 6%  but 34% of subscribers who left complained about costs.

UHC

  • UHC AARP 3.5 Star Preferred plan ($77.70) with no deductible) and had a low 7% turnover rate but 56% of the people who left, complained about the high costs.
  • UHC other two plans: AARP Saver Plus ($59.90/mo. + a $415 deductible) and AARP Walgreens ($28.10/mo. + $415 a deductible) have a lower, 3 Star rating and 15% turnover rate with 45% of subscribers who left, complained about costs.

Humana

  • Humana‘s three plans earned 3 star Medicare ratings including its Walmart Rx ($35.70/mo.+ $415 deductible)Preferred Rx ($37.40/mo. + $415 deductible) and Enhanced ($80.50/mo. with no deductible. The plans all had 11% turnover and 31% subscriber complaints regarding costs.

WellCare

  • WellCare’s plans all were rated 3 stars rated and ranged in price from Value Script ($15.50/mo.+ $415 deductible), Classic ($37.90/mo.+ $415 deductible) and Extra ($81.50/mo. with no deductible) all had consistent turnover rates of 13% and 33% complaints about costs.

Aetna

  • Aetna’s 3 star Select ($17.70/mo. + $330 deductible) had 12% turnover and 33% complaints about costs while their 3-star Value Plus plan ($58.80/mo. with no deductible) had 24% turnover and 53% complaints about costs.

In summary, in considering PDPs it is important to confirm if the plans:

  • Include your medications and at what costs
  • Have a deductible expense on your drugs;
  • Have restrictions on access to your medications,
  • Have preferred retail and mail-order pharmacies,
  • Have high subscriber turnover and/or have other significant negative issues identified by subscribers and/or Medicare.

And finally, what is the total annual cost to receive your medications from each plan and the comparative differences in quality, costs and benefits.

Resources

Free resources are available to help you in comparing costs among plans. These include:

Medicare Plan Finder

Provides detailed information from Medicare to compare Quality Star ratings, your estimated annual and monthly cost (premiums, deductibles, co-pays/co-insurance) for your specific medications and pharmacies among available Prescription Drug Plans and Medicare Advantage Plans sold in your community.

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State Health Insurance Assistance Program

Provides free personal and group information/assistance with Medicare issues and questions.

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MedicareRights

Helps people with Medicare understand their rights and benefits, and navigate the Medicare system

References

Congressional Budget Office, 2018 reports

Kaiser Family Foundation, 2018 Data Briefs and Fact Sheets

Medicare.gov

Medicare Rights Center

Medicare Trust Fund Board of Trustees, 2018 Annual Report

The Doctor-Patient Rights Project

 

 

10 Things You Didn’t Know about EPIC -NYS’s Prescription Assistance Program for Seniors

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NYS, like 15 other states, has a wonderful prescription assistance program for seniors called EPIC. It can make a huge difference for seniors, if they only knew about it.

10  very important things that you probably never knew about EPIC

1.The EPIC plan is used by more than 300,000 New York seniors who are over 65. However, EPIC members only represent 10% of New York’s 3 million seniors and there are many more people who are eligible and could benefit from the program.

2. EPIC is not a substitute for a Medicare Part D drug plan, but rather a supplement for low to moderate income individuals. In many cases, EPIC will actually pay for part or all of your Part D premium.

3. The EPIC program income eligibility is $75,000 for an individual and $100,000 for couples. Income is based on your last year’s federal 1040 tax return, line 22 (total income). EPIC does not look at your assets (cash, investments, property etc) or your expenses, only your reported income and they verify what you report with your tax return.

4. EPIC provides financial assistance in two areas- it provides a subsidy for individuals who’s income and resources are above Medicare’s Low-Income Subsidy (LIS) criteria but below EPIC’s limit of $23k (ind.) and $29k (couple), to pay for the cost of your Part D premium (up to $39/mo. in 2018). Secondly, EPIC subsidizes the cost of of your prescription drugs (after any deductible in the plan has been met). Your cost of medications with the EPIC subsidy will range from only $3 to $20 per monthly prescription.

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This benefit can be worth tens of thousands of dollars for people with expensive medications to treat chronic diseases such as hepatitis B, diabetes, inflammatory diseases, multiple sclerosis and various form of cancers. This includes medications that may be excluded from your Part D’s formulary.

5. EPIC can pay for either part of your Medicare Advantage’s drug component or a stand alone Part D plan that is used with original Medicare and Medigap plans

6. EPIC can even pay for Part D penalties in some cases if your drug plan premium is under $39/month

7. If you are eligible for an EPIC Part D subsidy, don’t quickly sign up for a zero premium Medicare Advantage plan. You should look at better plans with lower co-pays and added benefits- dental, health club that may cost you little or nothing to upgrade your health plan coverage and may not have a deductible.

8. Applying for EPIC is easy- just complete the half page application and mail it in.

9. EPIC has a small annual member fee for low-income people (under $20k (i) and $26k (c) who are eligible to receive the Part D premium subsidy up to $39/mo. For people with income over $20K (i) or $26k (c), there is no program fee but rather a deductible that needs to be met based on your income. The annual deductible starts at $62 (i)  and $182 (c) and increases with your income. The deductible needs to be met before you’re eligible to receive the subsidized prescription rates..

10. EPIC members are entitled to a Special Enrollment Period once a year, if they want to change their prescription drug plan. This could result in better medical and drug coverage or lower premiums.

For more information and an EPIC application call 800-332-3742

Buyer Beware in Selecting a Medicare Prescription Drug Plan (PDP)

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Individuals who use original Medicare A & B for their medical care, with or without a Medigap Plan (not a private Medicare Advantage plan), need to check the formulary and costs of various private insurer PDPs that are available in your area very carefully. And, don’t assume that an insurer that provides a good value for one type of plan (eg. MA or Medigap) provides the same quality, value and coverage in their PDPs. Unlike MA plans that include the same medication formulary, PDPs often have different medications, deductibles and co-pays among their various plans, so check carefully.

An example is United HealthCare, who is a leader in sales and value for their Medigap plans in NYS, ranks much lower in sales & value for their MA and PDPs. There are also dramatic differences in the drug formularies and subscriber cost among the 3 different UnitedHealthCare PDPs that are offered.

The UHC Rx Preferred plan includes over 3,500 drugs on their formulary and has their most expensive premium ($91/mo. but does not include a deductible). By comparison, the RX Savers Plus plan excludes over 400 drugs that are included in the Preferred plan for $55/mo. and includes a $405 deductible. And their lowest cost premium plan is the UHC RX Walgreens plan for $26.50/mo. with a $405 deductible, but it doesn’t cover 500 medications that are included in the high premium cost UHC Preferred plan.

Other popular insurers such as SilverScripts, Humana and Cigna that offer multiple PDPs in NYS also share similar issues which makes it difficult for an individual to clearly understand and choose a plan that includes their medications at a price they can afford.

Medicare.gov provides a valuable, free Plan Finder service that allows you to anonymously enter your medications and your preferred pharmacies and then compare the total cost of different plans (including MAs and PDPs) from different companies that you are considering.

Once you enter your medications You will also see differences in:

  • Your medications that are not included on the plan formulary.
  • Your medications that have restrictions.
  • Your brand named medications that have generic alternatives.
  • Your cost or a one month or a 3 month supply of medications from different pharmacies.
  • And, finally the total comparative cost differences of each plan including their premiums, deductibles and co-pays that you are considering.

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Another nice added feature is that your Plan Finder medication data can be printed and is stored anonymously online. It can be retrieved (with your assigned Drug List ID number and Password date for your future review and updating.

Investing some time in objectively comparing coverage and costs differences of your Medicare plan options can save you money and problems in the future.

If you or your family members needs assistance, you can contact the free State Health Insurance Assistance Program at http://www.shiptacenter.org or 800-Medicare.

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Four Strategies for Reducing your Medicare Drug Costs

Why is the Cost of Medications so High?

Medications are a major out-of-pocket expense, especially for anyone with acute or chronic medical conditions. Unlike other countries with national health insurance systems, our Congress has supported the financial interests of Big Pharma and themselves and over interests of citizens to have access to affordable health care.

In return,Big Pharma has been a major source of more than $10 million a year in political contributions. In addition, they spend more on marketing to health care providers and  consumers than they spend on research and development of new medications to safely treat serious health conditions.

Medications that are critical to individuals’ health and well-being, are substantially more expensive in the US than in Canada, Europe and other countries.

Pharmaceutical companies are free to establish high prices for their government-protected patented drugs and this results in high consumer and government debt due to taxpayers subsidizing Big Pharma.

The US spending on pharmaceuticals is approximately $300 billion dollars a year. Political efforts to reform these  out-of-pocket expenses for medicare recipients have been very limited primarily to pharma companies agreeing to offer discounts to Medicare patients once they exhaust their initial Medicare coverage limits.

However, there are some strategies that consumers can use  to reduce and control their  medication expenses.

Strategies for Lowering Your Drug Costs

1. Know The Differences in Medication Cost and Coverage Before you a Select a Plan.

Medicare Advantage (MA) and stand-alone Prescription Drug Plans (PDP) are difficult to compare and can be very confusing for most people. However, not knowing the consequences of the plan that you select can be very costly.

Use Medicare’s Plan Finder at http://www.medicare.gov to compare the cost of medications among the different plans available in your service area. If you are changing insurance plans, don’t assume that the plan that you are considering includes the same medications and pharmacies.

Plans can often differ in their restrictions (eg. prior approval, quantity limit & step therapy) that they place on medications as well as the significant differences in Tiers and associated  co-pay/co-insurance that they establish for each medication.

Insurance companies and their pharmacy benefit managers (PBM) establish the plans detailed policies and procedures including:their drug formulary, medication restrictions, negotiated prices paid to pharmaceutical companies and pharmacies,  preferred medications and pharmacies, and the co-pays and co-insurances that consumers will pay.

2. Use your Plan’s Preferred and Mail Order Medications along with in-network, Preferred Pharmacies, Costco & Sam’s

Consumers can experience considerable savings by using your plan’s generic and preferred brand name meds whenever possible; making use of your plan’s mail order pharmacies for maintenance drugs and using your plan’s in-network and preferred pharmacies. And don’t forget to check with Costco and Sam’s. Many people don’t realize, you don’t have to be a club member to benefit from their low drug prices.

3. Check your Eligibility for Financial Assistance Programs.

If your income is low enough, your medical expenses are high enough or you meet other special criteria, you may be eligible for low or no cost medications.

Financial assistance can come from the federal (e.g.. Medicare’s Extra Help, Medicaid, Veteran’s Administration), state (State Pharmacy Assistance Programs such as NYS’s EPIC), private (Pharmaceutical Assistance Programs) or from specific clinical research programs.

4. Make Lifestyle Changes and Reduce Your Need for Medications

While you don’t have control of your genes, there are many things you can do for your health and reduce your risk of medical problems and need for medications.

Eating a healthy diet, exercising, getting adequate sleep, managing your stress, not smoking, limit your intake of alcohol, caffeine, sugar, salt, fat and processed foods will go a long way in reducing your risk of diabetes, cardiovascular diseases, hypertension, cancer and many other debilitating conditions can substantially reduce your quality of life and increase the need for costly medications.

When it comes to your health care, ‘buyer beware”.

Remember, no one has a greater interest in your health  or your pocketbook than you.

Feel free to share your comments and general questions.We all can learn from one another. Go to http://www.healthplanadvisor.org for more articles.

Thanks

Jim Sorrentino