Hurts Doughnut: How to save money on prescription drugs
As a Medicare enrollee the first step you should take to save money on your prescription drugs is to revise your coverage plan during the open enrollment period from October 15 through December 7 – even if you’re happy with it. While it’s true that Medicare Part D beneficiaries paid less for prescription drugs in 2014 under the Affordable Care Act (ACA) then they did in 2013 – and prescription drug coverage premiums were less expensive last year as well – the fact is that you could always pay less. Or at least until 2020 when Medicare closes the so-called donut hole.
This donut hole is the difference between what you pay after hitting the initial coverage limit and what the government pays for ‘catastrophic’ drug coverage. Ever since the healthcare reform was enacted in 2010, there have been improvements in drug coverage and reduced general expenses. For example, the average Medicare Part D monthly premium remained level at approximately $31, and the deductible dropped to $310 in 2014, down from $328 in 2013. The initial drug coverage threshold limit for 2014 was established at $2,850, down $120 from last year. Senior citizens who went through the hole got somewhat of a reprieve considering that catastrophic drug coverage for 2014 started at $4,550, down from $4,750 last year.
All told, Medicare beneficiaries have saved over $11.5 billion in prescription drugs – about $1,400 per person – according to the U.S. Department of Human Health and Services (HHS). Moreover, former HHS secretary Kathleen Sebelius said last year that ACA-mandated reforms to Part D coverage saved people older than 65 billions of dollars since 2010 by creating a “competitive and transparent” marketplace. “Medicare is much stronger as a result of the healthcare law,” she said at the time. At the same time, spending has also slowed down in the past three years, reaching all-time lows of growth. Part D premiums and out-of-pocket expenditure for enrollees were down for the fourth consecutive year in 2013 as well.
However, beneficiaries can still find ways to make drugs even cheaper. “The drugs won't be free, but they'll easily be less expensive,” assistant director for the Program on Medicare Policy with the nonprofit Kaiser Family Foundation Juliette Cubanski says. This is where reviewing your current plan and even switching to one that meets your pharmaceutical needs better can pay off. These plans are subsidized by the government but the private insurance companies that offer them are at liberty to change them every year. As a result some drugs may no longer be covered or become pricier. On the other hand, some insurers may devise new strategies or partner with drug makers or pharmacies to hold the line or lower costs. “Many plans now have what are called 'preferred pharmacies” that offer inexpensive brand name drugs, manager with private health insurance consulting firm Allsup Medicare Advisor Paula Muschler says. Conversely, purchasing drugs out of their network could lead to paying extra.
Speaking of brand name drugs, you could also save money by switching to generic versions which have the same active ingredients but are 80%-85% cheaper. Other suggestions include buying in bulk, shopping online from approved mail-order distributors, and shopping at Costco, Walmart, and other big-box retailers that can offer more attractive discounts than a mom and pop drugstore. Additionally, you should go over your prescription drug regime with your doctor, who could suggest stopping a drug to which your body has adapted, rendering it less effective. “If you're taking a lot of [prescription] drugs, maybe you don't need to be taking them anymore,” Cubanski says. “It's important to step back and look at the entire prescription drug regimen. It may involve scaling it back some.”