Six Reasons Why You May be Paying More for your 2012 Medicare Part D Prescription Drug Coverage

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Seniors and other Medicare beneficiaries who did not change their Medicare Part D plan coverage may now be finding that their 2012 Medicare Part D prescription drugs are costing them more than they expected – especially based on their experiences from last year. To help people understand why their Medicare Part D prescription costs might have changed this year, Q1Medicare.com provides several reasons why people are paying more for their medications and a few suggestions of how these people might lower their drug costs.

One reason why people are surprised by their plan changes may be that many of these changes are not so obvious and require a bit of research into a plan’s lengthy Annual Notice of Change letter, Evidence of Coverage, and Formulary documents.

Starting on January 1st, many seniors and other Medicare beneficiaries began using their 2012 Medicare Part D prescription drug plans and found that their new prescription drug coverage is now costing them more than they anticipated – even though they did not switch to a new Medicare Part D plan in 2012.

“Although most people know that their Medicare Part D prescription plan coverage can change every year, we are still hearing from many people who are surprised by the unexpected increases in their prescription drug costs even though they stayed with their same plan from last year,” notes Dr. Susan Johnson, Technical Director and co-founder of Q1Medicare.com. “One reason why people are surprised by their plan changes may be that many of these changes are not so obvious and require a bit of research into a plan’s lengthy Annual Notice of Change letter, Evidence of Coverage, and Formulary documents.”

To help people understand why they are now paying more than expected for their medications, Q1Medicare.com offers six common reasons why 2012 Medicare Part D prescription drug costs may be higher this year – even for people who did not join a new 2012 Medicare Part D plan.

1.    You are in the initial deductible phase of your Medicare Part D plan. Probably the simplest explanation for an increase in prescription drug costs is that you are now paying full retail price for your medications during your plan’s Initial Deductible phase. Many plans from last year continued to use an initial deductible with their plans in 2012 and some 2012 Medicare prescription drug plans added an initial deductible this year even though the same plan had no deductible in 2011. Once the retail value of your Medicare Part D prescriptions exceeds your plans deductible, you will enter into your plan’s Initial Coverage phase - and your prescriptions will be covered under your plan’s cost-sharing structure. The standard 2012 Initial Deductible is $320, but this value can vary depending on the Medicare Part D plan or Medicare Advantage plan that includes prescription drug coverage. Information about your plan’s initial deductible can be found in your Summary of Benefits, Evidence of Coverage, Explanation of Benefits statement, and Annual Notice of Change letter. Your basic Medicare Part D or Medicare Advantage plan structure can also be viewed using our 2012 PDP-Finder.com or MA-Finder.com.

2.    Your plan’s prescription drug cost-sharing structure has changed. There are several reasons why Medicare Part D prescription drug costs can increase based on a Medicare plan’s cost-sharing structure. First, your plan may have simply increased the co-payment cost of a specific drug tier. For instance, in 2011, you may have paid a $4 co-payment for your Tier 1 generic medications. And now in 2012, you will pay an $8 co-payment for these same Tier 1 generic medications. Alternatively, your plan may have moved your medication to a higher costing tier on your plan’s formulary (or drug list). For example, your Tier 1 generic medication that had a $4 co-payment in 2011 was moved to a higher tier and now is a Tier 2 preferred-generic medication with an $8 co-payment. The same type of cost changes can occur if your medication has been reorganized into another tier when your plan has added or removed a cost-sharing tier to your 2012 formulary. For instance, last year, your formulary may have had four cost-sharing tiers with only one generic tier and this year your 2012 formulary has five tiers with your medication being moved to the higher, newly-added non-preferred generic tier. People can check to see if their medications have been moved to a higher drug tier using their printed formulary or they can use the Q1Medicare.com online 2012 formulary browser: FormularyBrowser.com. If your medication has been raised to a new cost-sharing tier, you have the right to ask your plan for a Formulary or Tiering Exception where your medication would be brought back down to the lower cost-sharing tier for 2012. Medicare Part D plans do not automatically grant Formulary Exceptions, but if your exception is denied, you have the right to appeal your plan’s negative decision several times.

3.    Your drug has been dropped from your 2012 Medicare Part D Drug plan’s formulary (or drug list). If your medication is no longer covered by your 2012 Medicare prescription drug plan, your plan is required to provide you with a 30-day emergency fill so you will have time to work with your medication prescriber to find an alternative medication. You also have the right to ask that your Medicare Part D plan cover your non-formulary medication by filing a Formulary Exception or Coverage Determination – that is; you are asking your Medicare Part D plan if they would could expand their existing formulary to include coverage of your specific medication.

4.    You purchased your medication at a non-preferred network pharmacy or a non-network pharmacy. In 2012, more Medicare Part D plans are using both Preferred and Non-Preferred Network pharmacies. Non-Preferred pharmacies are still Network pharmacies and will honor your Medicare prescription drug plan, but non-Preferred Network pharmacies may charge a higher cost-sharing amount for your covered medications as compared to Preferred Network pharmacies. In addition, although most Medicare Part D plans now have a pharmacy network that includes over 50,000 pharmacies, occasionally you may find a pharmacy that is not included in your plan’s pharmacy network and, in these increasingly-rare situations, you will pay the full-retail price for your medications. You can contact your plan’s Member Services department to help you locate nearby pharmacies that are either in your plan’s network or considered Preferred Network pharmacies that might offer even lower prescription co-payments.

5.    You have exceeded your monthly quantity limit for a particular medication. If you have been using a medication that is now being subject to a “quantity limit” restriction and you have already met your plan’s limit, you may find that your 2012 Medicare Part D plan will not cover the cost of any additional medication above the set limit. For instance, if you are using a medication that has a 30/30 quantity limit (30 tablets for 30 days), and you have already filled one prescription for the first 30 tablets but are now seeking a refill of an additional 30 tablets before the end of the 30 day period, you may find that your drug costs are not covered by your plan. However, if you need to extend your coverage beyond the quantity limit, you can have your physician ask your Medicare plan for an exception and provide a reason for the additional tablets. If you wish to see if one of your medications is subject to quantity limit restrictions, you can review your printed formulary or use our online formulary browser.

6.    Your medication is now subject to prior authorization requirements and you made your purchase without first receiving prior authorization from your Medicare Part D plan. Medicare Part D plans carefully monitor the use of some medications to protect their plan Members and plans may require that the Medicare beneficiary receives prior authorization from the plan before the prescription is covered. If you find that one of your medications is now subject to prior authorization requirement, you can contact your plan’s Member Services department to request prior authorization forms or you can often download the forms from your plan’s website. Your physician can usually complete the forms and fax them directly to your plan.

Unfortunately, if a person finds that they are not satisfied with their current 2012 Medicare Part D plan, they will find that they have only limited opportunities to change their Medicare plan coverage until 2013. However, some Special Enrollment Periods are available that allow people to change Medicare Part D and Medicare Advantage plans outside of the annual enrollment period. Special Enrollment Periods are available only in limited situations such as when a person moves outside of their plan’s service area or if they are eligible for the low-income subsidy or the Medicare Part D Extra-Help program. Also, starting this year, people will have the opportunity at any time during 2012 to change to a Medicare Part D plan or Medicare Advantage plan that has a “5 Star” quality rating. Anyone interested in changing their Medicare prescription drug coverage during 2012 can contact Medicare at 1-800-633-4227 to learn more about their enrollment options.

About the Q1Medicare.com Website
Q1Medicare.com is one of the largest independent online resources for Medicare Part D prescription drug plan and Medicare Advantage plan information. Q1Medicare offers a comprehensive section of Frequently Asked Questions, online tools, and a free Medicare Part D Newsletter, all designed to help Medicare beneficiaries, caregivers, advocates, advisers, and agents better understand the Medicare Part D and Medicare Advantage programs. Q1Medicare.com is operated by Q1Group LLC (Saint Augustine, Florida).

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Lynnea Christner

Susan Johnson MS-MIS, MBA, PhD
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