Insurance
February 1, 2023Insurance
New year. New Insurance. New deductibles. Changing prescription prices. All this can lead to confusion when picking up medications at the pharmacy.
Why is this not run through my insurance? Why is this more expensive than last year? Why doesn’t my insurance cover this anymore? These are all questions that may run through your head as you get your first prescription filled in the new year. Our Lewis pharmacists may be able to help explain your prescription plan and could help you find cheaper alternatives to switch to after discussion with your doctor.
First and foremost, be sure to bring your insurance card into the pharmacy, including any supplemental insurance cards. The pharmacy can then verify the information they are billing is correct and have a copy on file for future reference if needed.
Often the beginning of the year is the restart for insurance. With most insurances, prior to the insurance paying for your medications, you will have to meet your deductible. By definition, the deductible is the amount you pay for covered health care services before your insurance plan starts to pay. This year for Medicare Part D plans, the deductible is $505.
After the deductible is paid, then you will usually pay either the copayment or coinsurance and the insurance will pay the rest. For Medicare Part D plans, after the deductible is paid, you enter into the initial coverage phase. In this phase, you will pay the copay or coinsurance based on the plan’s formulary. A formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. The formulary is commonly categorized into 5 different tiers. Tier 1 medications are usually preferred generics - the cheapest tier. Tier 4 is often non-preferred brands and are typically much more expensive. The highest cost tier - Tier 5 - often includes a number of specialty medications. So in this phase of Medicare, you will pay the copay or coinsurance based on the tier the medication is in for your plan, and the insurance will pay the rest of the cost. This continues until what you pay PLUS what the plan pays (also known as the full drug cost) equals $4660 in 2023.
When you hit this limit, you advance to the coverage gap phase, also known as the “donut hole.” In the donut hole, you will pay 25% of the cost for generic and brand medications. For generics, the plan will pay the other 75%, but for brand medications, the plan pays 5% and the drug manufacturer pays 70%. This phase continues until your yearly cost PLUS what the drug manufacturer has paid (called the True out of Pocket) equals $7400 in 2023.
When this limit is reached, you enter the catastrophic phase. Here you will pay 5% or $4.15 for generics (whichever is greater) and 5% or $10.35 for brand name medications (whichever is greater). The plan pays for 15% and Medicare pays the remaining 80% via a federal government subsidy.
Medicare Part D Phases of Coverage
Phase | Paid by Patient | Paid by Plan | Phase Limit |
Deductible | 100% generics or brands | 0% | $505 |
Initial Coverage | Tier Copay or Coinsurance (generics or brands) | The difference | $4660 Total drug cost (what patient pays + what plan pays) |
Gap (Donut Hole) | 25% (generics or brands) | 75% (generics) 5% Plan + 75 % Drug manufacturer (brands) | $7400 True out of Pocket (All patient copays + what drug manufacturer pays) |
Catastrophic | 5% or $4.15 (generics)* 5% or $10.35 (brands)* | 15% Plan 80% Medicare (federal government subsidy) | End of year *whichever is greater |
These are the phases of Medicare for 2023 and limits for each phase. As mentioned earlier, each plan has a different formulary, or list of preferred medications. This can change from year to year as well, so a medication you have been on previously may be more expensive because the formulary for the plan changed and they prefer another medication instead.
For example, you may be on the inhaler Symbicort, but in 2023 the plan changed the formulary and Breo Ellipta is preferred instead. They are different medications, but work similarly in mechanism and side effects. However, the Symbicort is no longer covered like it was in 2022, but the Breo is $47 for one month.
If you run into a situation where you notice your copay has increased from year to year and your deductible has been met, talk with your insurance or pharmacist about different options that may be cheaper. Lewis pharmacists have access to tools that can look up formularies for Medicare Advantage and Part D plans and look for cheaper alternatives. If you have commercial insurance, you may be able to find the insurance formulary online or by calling and talking to an agent. After finding alternative options, you or your pharmacist can contact the doctor and obtain a new prescription for the different medication.
All this might be confusing, but your Lewis pharmacies are here to help walk you through each phase. We can work with you and your doctor to find affordable medication options that will be effective for what you need!