Strategies for getting the most out of your Medicare Part D
Medicare is now in its window of open enrollment for making changes to your Medicare coverage; December 7 is the cutoff. Medicare Part D provides for prescription drug coverage; however, different levels of coverage exist and some medications are not covered at all. In addition to a monthly premium, a deductible must be met; after that, the medication can be purchased at a lower cost. Also, the copay may increase in the last months of the year. The bottom line is that some Medicare recipients will not benefit from Part D and actually incur added costs. Thus, the savvy senior must contact his or her insurance carrier and determine cost vs. benefits. If the benefits outweigh the costs, then steps can be taken to maximize those benefits.
An example of an individual who would not benefit from Part D was one who was on a medication that cost $20 per month; a person who had to fill a $300 per month prescription would definitely benefit. The first step is to list all the medications and their dosage that you regularly take. Then call your insurance carrier and obtain a quote on the monthly premium and the copay. Don’t forget to ask if the copay will increase in the last few months of the year. Even if your out-of-pocket expenses are similar, Part D may often be a wise option because of the possibility of requiring additional medications during the coming year. Be aware that the coverage will begin on January 1, 2014 and you will incur the full prescription cost until the deductible is met.
According to a UCLA-led study published online on August 23 in the Journal of General Internal Medicine, about 20% of Part D beneficiaries have out-of-pocket costs that top $100 a month. As a result, approximately 10% are forced to use less medication than prescribed due to financial hardship. This study leads me to the second savvy senior tip: determine whether a generic therapeutic equivalent is available for any or all of your medications. The UCLA study authors note that because both the federal government and Medicare beneficiaries have to deal with the high cost of medication, there is a need for strategies to reduce those costs. They explain that a simple solution could result in hundreds of dollars in savings per patient: Instead of brand-name drugs, substitute less expensive counterparts that have a similar therapeutic effect––a practice sometimes known as therapeutic interchange or therapeutic substitution. While this strategy seems simple, and while about 90% of hospitals do it all the time, it is, oddly, not yet common practice in outpatient settings in the United States.
Lead investigator Dr. O. Kenrik Duru, an associate professor in the division of general internal medicine and health services research at the David Geffen School of Medicine at UCLA noted that many patients are not aware that there is often a less expensive alternative to many popular medications that may work slightly differently but have a very similar therapeutic effect. While the appropriateness of substituting less expensive medication varies in different clinical situations, patients need to know about potential options so they can have informed discussions with their doctors.
The researchers used 2007 data to identify 50 common medications prescribed in a large Medicare Part D health plan. In addition, a group of practicing clinicians and pharmacists identified a subset of about 30 of these medications for which there was either a direct generic substitute that used the same chemical compound, or an acceptable and less expensive therapeutic substitute that used a different chemical compound with a very similar therapeutic effect. The researchers then compared the cost of the original medications to the substitutes and calculated the potential savings. This included savings for the patient, the health plan and, in some cases, for the government when it was subsidizing the cost.
The investigators found that 39% of Medicare patients receiving the low-income subsidy and 51% of patients not receiving the subsidy were eligible for a generic or therapeutic substitution. (The health plans and the government pay most of the medication costs for subsidy-eligible patients.) The investigators found that for each generic substitution among patients receiving a subsidy, the government would save an average of $156 per year. Each therapeutic substitution among subsidized patients would result in greater savings: The government would, on average, save $126 per year, and the health plan would save $305 per year. Patients not receiving the low-income subsidy would save $138 per year for each generic substitution. For each therapeutic substitution, each patients would save, on average, $113 per year, and the health plan would save $276 per year.
The researchers noted that not every substitution is appropriate for every patient, and they acknowledged that in some clinical scenarios, potential substitutions have already been tried unsuccessfully or may not be appropriate at all. For these reasons, they listed cost-savings as a per-substitution figure rather than estimating potential savings across the entire system. (The latter number would depend on exactly how many people switched to potential substitutes.)