Many people think that dropping a prescription or two will lower what they pay monthly in Medicare Part D Prescription Drug premiums. However, that’s not actually how premiums are determined.
The monthly premium is the same for everyone on the same Part D plan in the same zip code, regardless of the person’s age or medications. People in different zip codes may pay slightly higher or slightly lower monthly premiums for the same Part D plan, but everyone in a zip code pays the same premium. Over time, Part D premiums have trended upward, so your clients likely have experienced increases each year.
However, even if their monthly premium stays the same from year to year, their total out-of-pocket costs can vary widely. In other words, when they or their doctors eliminate drugs or change them, it’s their out-of-pocket expenses, not their premium, that will be impacted. The costs of each drug and whether they’re in their particular plan’s formulary are the biggest influencers of what you ultimately pay.
If your clients take fewer medications this year, they may pay less than last year, because they’ll have fewer drug co-pays to pay at the pharmacy. But if they replaced two inexpensive medications with one more-expensive drug, they would pay more. For example, say your client, Jack, took three generic blood pressure medications that totaled only $12 a month in co-pays. But his doctor recommended that he replace those three drugs with a brand-name medication, which happens to be more expensive — $40 a month. Over the course of a year, that change will total $336 in additional out-of-pocket costs.
Remind your clients that when they conduct their annual review of their prescription drug plans during Medicare’s open enrollment (Oct. 15 through Dec. 7), that the plans with the lowest premiums are not always the better financial choice. The Licensed Insurance Agents at Medicare BackOffice specialize in Medicare plans, and they can help your clients figure out the best choice for their particular situation. For complicated questions, they can refer your questions to our on-staff pharmacist.
