When it comes to Medicare, prescription drug coverage is important. So much so, that it is required under Medicare Part D.
But what happens when your prescription is not covered under Medicare?
Each year, Medicare’s list of covered drugs, or formulary is updated to reflect what drugs are covered and what are not covered. There is no guarantee that your drug will be covered year to year, so it is important to review your plan each year.
New legislation is also being introduced to regulate the cost of historically expensive drugs. For example, starting in 2024, some insulins are now $35 on Medicare. This helps to make a much-needed drug more affordable.
However, with new health conditions arising and medical advancements being available, experimental drugs that may not be available on the drug formulary are being prescribed. The reason is that there may not be enough information about these drugs to cover them under Medicare.
How Medicare drug plans work
With Medicare drug coverage, drugs are not covered at 100%. You still are responsible for a portion of the costs until Medicare covers everything at 100%. The way this is covered is broken up throughout the year, but the total is $8,000 for 2024.
You do not have to pay $8,000 first before getting your drugs covered. First, you must pay a deductible of $550.
Then, these drugs are covered with a copay or a set cost. This applies to generic and brand-name drugs. Usually, Medicare covers 75% of the cost and you pay 25% of the cost. Any specialty drugs will require you to pay 33% of the cost while Medicare covers the remainder of the cost.
Once you have paid $4700 in drug costs, you then enter into the Donut Hole. In this phase of drug expenses, the percentage of the cost changes, with the drug manufacturer covering 70% of the cost, you paying 25% of the cost, and your Medicare plan covering the remainder 5% of the cost. As you can see, you are still paying 25% of the cost, but the other costs are being paid in a different way. This payment arrangement applies to drug costs up to $12,000.
Once you reach $7400 you enter into the Catastrophic phase of drug coverage. In this stage, Medicare will cover 80% of the cost of the drug, your plan will cover 20% of the cost of the drug, and you pay 5% of the cost of the drug.
This out-of-pocket cost is based on the calendar year and resets each year on January 1st. If your drugs were fully covered in the previous year, you will now have to start the process over and pay your share of the costs to get the drugs covered fully.
The only way you will likely reach this full amount is by having experimental or specialty drugs, or treatments like chemotherapy. It is important to remember that Medicare will only cover the drugs that are in their formulary and give you the rates your plan has listed only if that drug is covered.
What if the drug is not on the formulary?
If your drug is not found on the formulary, it may be a problem. However, solutions are depending on the kinds of drugs it is.
First, the type of Medicare plan you enroll in can impact whether or not a drug is covered. While Medicare Advantage plans have drug coverage built in, you may pay more than if you enrolled in a Medicare Part B plan with A Medicare Supplement (Medigap plan).
For example, if your drug is an injection for rheumatoid arthritis, then it would be covered under Medicare Part B. However, to get the drug covered, it is recommended to enroll in a Medicare Supplement plan instead of a Medicare Advantage plan because these plans cover the costs Medicare Part A and B do not. So if Medicare Part B will only cover part of the cost of the injection, your Medicare supplement will cover the remaining portion of the cost.
If you have a Medicare Advantage plan and your drug is not covered, you have two options. First, you can pay out of pocket for this drug, but it won’t count toward your drug out of pocket. When you pay you can also get coupons from sources like GoodRX to lower the cost. Second, you can speak with your doctor about being prescribed a similar drug that is covered on the formulary. However, it is important to note that your doctor should make this recommendation.
What if I can’t afford it?
If your drug isn’t covered and there are no alternatives, there are ways possible to reduce the cost. As mentioned before, you can use coupons to lower the cost, but it is important to note you can’t use this on top of your Medicare coverage–you can only use one or the other.
Next, you can apply for financial assistance through state Medicaid. If you qualify for this, you can also get assistance for reduced pharmaceutical benefits. However, this is based on your income, so if you do not qualify for this, you cannot take advantage of these benefits.
Finally, as another option, you can try to qualify for a discount through your manufacturer directly. You can apply through their website and they can give you a reduced rate on the prescription costs.
In conclusion, prescription drugs have become expensive. With drug formularies being updated all the time and new legislation coming out yearly, costs may decrease. For now, drugs that Medicare does not cover must be paid out of pocket, making it unaffordable if you do not have the extra monthly budget to spend on these drugs.