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

 

 

How to Avoid Costly Mistakes in Choosing a Medicare Plan

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Medicare’s annual open enrollment runs from October 15th to December 7th. During this time, Medicare subscribers can join or change plans including:

  • Medicare Advantage plans:
  • Return to the original Medicare coverage
  • Medicare Supplemental (Medigap) plans;
  • Part D Prescription Drug plan

It is very important to make an informed choice of the best insurance plan for your medical needs, preferences, and budget. A bad choice can cost you thousands of dollars and prevent you from receiving services that you need from your preferred providers.

Medicare Insurance Options for Seniors

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Original Medicare is the government-run health insurance for seniors and disabled people that use private doctors, hospitals and other healthcare providers.

By comparison, Medicare Advantage (MA) plans that often include a prescription drug plan, stand-alone Prescription Drug plans (PDP) that are used with original Medicare and Medigap (Supplemental) plans are all sold by private insurance companies that are subsidized and regulated by Medicare.

These plans are offered by a variety of large for-profits (eg. United Healthcare, Humana, Aetna), national non-profit organizations such as Blue Cross and many regional non-profit insurers.

In addition, some seniors are eligible to receive their health insurance through their current or former employer.  And most Veterans are eligible to receive their health care and medications through the Veterans Administration.

Common Problems to Avoid

Your plan doesn’t include your preferred service providers.

If you don’t verify that your health care providers have a network contract with the insurer that you are considering, you could be facing huge bills. You could be responsible for paying the full cost of expensive services from health care providers or declined service.

Out-of-Network does not mean out of your area. Your preferred health care provider could be next door, but may not have a contract with your insurance company.

Be especially cautious of PPO plans, often sold by national insurers, that lead you to believe that you can go to any doctor anywhere. This is not accurate. Many times national insurers have not developed local provider networks or formal contracts. They often pay commissions to insurance agents to sell policies but do not have local staff to resolve provider and subscriber issues and concerns. These are often handled by central call centers.

The fine print in PPO plan documents includes this disclaimer: “Out-of-Network/non-contracted providers are under no obligation to treat plan members, except in emergencies”

This means that while you may have insurance, you may not be able to find a provider that accepts your plan, for a variety of reasons.

Didn’t Anticipate High Deductibles and Out-of-Network Costs

Some plans, such as the Aetna Elite PPO are advertised as a $0 premium plan, however you need to pay the first $1,000 for many medical services. In other PPO plans, you could pay up to 40% for “out-of-network” services.

In addition, many plans require up to a $400 annual deductible for Tier 3-5 drugs that do not have a generic equivalent. Consumers need to be aware that each insurer decides what drugs to include and exclude, and what they will charge subscribers. Drug prices can also vary by the pharmacy that you choose and if you choose a 90 day mail-order supply versus a more costly monthly supply.

In considering plans, you should not focus solely on the advertised premium cost, but rather your medical, drug, out-of-network needs and your projected out-of-pocket expenses including premiums, deductibles, co-pays, out-of-network charges and drug costs.unknown-1

Medicare.gov provides a very good “plan finder” that helps you analyze medical & drug expenses among various plan options that are available where you live.

 

 

Didn’t Consider Medigap Plans for High Medical Expenses and Maximum Choices

Many Medicare Advantage HMO plans have little or no out-of-network coverage and you may have to pay up to 40% of the costs. If you have serious medical conditions that require costly tests, hospitalization, surgery and intensive outpatient treatment such as cancer, heart disease, renal disease and/or you would like the freedom to select specialty providers outside of your plan’s network, you’ll need good coverage at an affordable price. “Original Medicare” has no limit on your annnual expenses. And, Medicare Advantage plans have a high annual maximum out-of-pocket limit of $6,700 but there is an alternative–Medigap plans.

As a general guide, if your projected annual out-of-pocket medical expenses (premiums, deductibles & co-pays – excluding your prescription drug expenses) exceeds $3,000/yr. and/or you want Medicare coverage across the country, you should explore a Medigap plan.

Medigap plans provide supplemental coverage to original Medicare and pays for deductibles and copays. All healthcare providers who participate in Medicare across the country are included and there are no out-of-network exclusions or surcharges.

Medigap plans are regulated by each state and you can receive information on the availability of plans and their premiums by contacting your state insurance department medicare.gov/contacts.

Didn’t Think I Needed or Understood Differences in Prescription Drug Plansmed prices

Most Medicare Advantage plans include prescription drug (Part D) coverage. However, if you have “Original Medicare” with/or without a Medigap plan, you will also need to purchase a prescription drug plan (Part D) unless you have an approved employer drug plan or receive your medications from the VA.

If you don’t have a an approved drug plan and you want to purchase one at a later date, you are likely to be subject to a late enrollment penalty.

Part D plans are sold by private insurance companies. The premium cost of plans varies widely from $15 to $90 a month with a national average premium of $40/month. In addition, many plans have annual deductibles that can add up to $415 in your expenses

It is important to check plans that you are considering to confirm that the medications that you need are included; if there is an annual deductible and what your co-pays and total annual expenses will be before enrolling in a plan.

Medicare.gov has a good planfinder that compares the different cost of the various Part D plans based on the medications that you use and where you live.

Didn’t Expect a Medicare Enrollment Penalties

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Medicare rules require that if you want to receive Medicare benefits, you need to enroll and pay your Medicare Part B (outpatient) and Part D (prescriptions) premiums when you are first eligible. There are a few penalty exceptions, for example, if you receive creditable medical and drug insurance from you or your spouse’s employer, if you receive your medications from the VA.

Medicare penalties can be significant. The Part B (outpatient care) late enrollment penalty is 10% for each year, from the date of your initial Part B eligibility. The Part D (prescription drugs) penalty is 1% for each month from when you were initially eligible, or June 2006, the start of the program. There are a few circumstances when penalties can be reduced or eliminated.

The Importance of Having a Good Medicare Plan

Selecting the best plan for you or your family member is a very important responsibility since the consequences can be significant, both to your pocketbook and your ability to receive needed health care from your preferred providers.

Investing time in planning and seeking objective advice in selecting a plan, can save you a lot of time, money and headaches. The following is a list of free resources that are available to help you.

Resources

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Social Security Administration, socialsecurity.gov, 800-772-1213

The Social Security Administration is the agency that you need to contact to apply for your Social Security benefits and enroll in Medicare Part B and D., In addition, you can be screened for eligibility (income and resources) and apply for “Extra Help” with your Part D premium and cost of your medications

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Medicare: Medicare.gov – 800-633-4227

An excellent resource with Medicare information and specific help in comparing Medicare Advantage and Prescription Drug Plans in your area.

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State Health Insurance Assistance Program  SHIP 877-839-2675

Medicare contracts with states, counties and nonprofit organizations to provide individuals with personalized education, support, and assistance with Medicare.

These free services include comparative plan information, eligibility for financial assistance as well as help with selecting a Medicare plan, enrolling, and resolving problems.

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Partnership for Prescription Assistance

 This is an online information resource tool. You can learn about assistance programs that are available for specific medications, along with the eligibility criteria and program applications.

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Medicare Rights Center, medicarerights.org , Helpline: 800-333-4114

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.

 

This article was updated in October 2018 from a 2017 post

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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Aetna’s Pharmacy Controversy Affects 400,000 and Medicare Allows Subscribers to Disenroll

According to the 2/3/15 Kaiser Health News (KHN) report, Aetna’s errors and omissions in providing prospective and existing Medicare subscribers with accurate network Pharmacy information has affected 400,000 individuals.

The inaccurate and confusing information can affect the individual’s actual cost of their medications as well as potentially ending subscribers’ relationships with their preferred pharmacist and most convenient pharmacies. As a result, the federal Center for Medicare and Medicaid Services (CMS) is offering Aetna subscribers to either select a participating pharmacy that meets their needs or use a special enrollment period through February 28, to disenroll from Aetna and enroll in another Part D prescription drug plan.

Aetna, like a number of other insurers, has established a pharmacy benefit program that utilizes their size and national clout to drive hard deals with drug companies and pharmacies. They want to reduce their cost in exchange for offering a higher volume of business with less competition to their preferred drug companies and pharmacies.

Insurance companies through Pharmacy Benefit Managers (PBM) establish a complex structure of classifying drugs in different classes or tiers with associated co-pays or co-insurances and then add different restrictions such as requiring deductibles,prior authorization, step-therapy and quantity limit for subscribers.

Aetna’s program is a little more complex than other insurers in that they have a limited number of network pharmacies (especially local vs. national) that are grouped into either standard pharmacies and  a smaller number of preferred pharmacies. They also operate their own Aetna Rx Home Delivery pharmacy.

Aetna does offers subscribers choice for the meds and pharmacies that they use, but at a very high price. To illustrate, in the Aetna Medicare Premier PPO plan offered in Rochester, NY, if you want to use a “non-preferred brand” name medication on Aetna’s list of approved meds you will have to pay 50% of the cost for a 30 day supply vs. $45 for a “preferred brand”. Your co-pay for a 90 day supply of a “preferred generic” will be $8 (80%) more at a “standard” vs. ‘preferred” pharmacy and your co-pay for a 90 day supply of a “non-preferred generic” will be $18 (180%) more than a “preferred generic’ medication. Each insurance company through their PBM choses which drugs to include/exclude and in what tier and co-pay/co-insurance. These decisions vary among companies and are only subject to broadly written Medicare rules.

While Aetna has made a major push to expand their presence in the national Medicare Advantage market for 2015, they have not been ready for last year’s Fall Medicare open enrollment period. They heavily advertised and marketed their zero premium “Premier” plan but I have witnessed and heard numerous consumer complaints about their call centers and website regarding the accuracy of participating doctors and hospitals and being very slow in establishing provider contracts.

Hopefully Aetna will learn from this year and make changes in their plans that are responsive to seniors needs and priorities.