It is that time of year that televisions are filled with advertisements for Medicare Part D and mailboxes are filled with different pieces of information on available plans. Many people look at this information and throw it away or ignore the commercials. Those that aren’t familiar with Medicare or Part D prescription drug plans don’t always care to learn about something that will soon concern them. As people think about Medicare Part D, they don’t always know how it will effect them.
Medicare Part D
Medicare Part D is the prescription drug plan option that is available for those that are eligible for Medicare benefits. This is the insurance that is not offered by the federal government but it is regulated and structured by the Centers for Medicaid and Medicare Services. CMS is the federal entity that makes the rules for this program and ensures that specific rules and guidelines are followed. Because the insurance isn’t offered by the federal government, private insurance companies have been given permission to offer the plans to those that qualify.
Private insurance companies have applied for the right to offer these specific plans to those that qualify. Those that have been approved to offer these plans find they have to offer specific things to people to satisfy the rules of CMS. As people become aware of the different plans, they see there are some similarities and some things that are different. The things that are the same are those that are mandated by the Centers for Medicaid and Medicare Services. This is great for beneficiaries because these rules are the same and all providers have to abide by them.
Most people don’t realize until it’s almost too late the benefits of having a Medicare Part D plan. They don’t realize exactly the rights this insurance gives them and some don’t realize the benefits until they are years after their initial eligibility. There are many different benefits to having a prescription drug plan, no matter who the provider is.
Out of Pocket Expenses for Medications
One of the biggest benefits that people immediately notice is that of their medication copays. Those that have medications and didn’t have insurance are normally asked to pay the retail prices for their medications. When a medication is expensive, these patients don’t have a choice but to pay it or they will have to be without their medications until they can pay the price that is set by the pharmacy.
Those that have Medicare Part D insurance find their copays change dramatically. Those same medications that a pharmacy has marked expensive may be a medication that cost the member a minimal amount out of pocket. There are some members that have found their out of pocket expenses at the pharmacy come down as much as 90%.
The difference in prices happens because Part D providers have contracted prices with the pharmacies that are in their network. When a pharmacy decides to accept a specific insurance type, they have to accept a specific price for medications that are requested by the carriers of that insurance. Rather than charge their normal retail price, they charge those insurance members a negotiated price and copay for those medications. For example, a pharmacy could charge a person $200 for a medication because they don’t have insurance. If that same medication were requested by someone with insurance, they could pay as low as $10 for their copay. The difference in pricing is incredible for those with insurance.
Negotiated Prices for Medications
Not many people understand the difference between a negotiated price and a retail price when it comes to medications. There is a distinct difference in the two pricing structures and it can have a devastating effect on people with limited incomes.
A retail price is the price that establishment decides to price their items. Pharmacies are allowed to set their own prices for medications based on how expensive it is and what they need to make a profit. When a medication is expensive for the pharmacy to purchase, they pass that expense to their consumers as much as possible because they are in business to make a profit. If the price of that medication goes up, the retail price typically does as well. If the price surges unexpectedly, people that need that medication will have to adjust to that price in order to get their medications.
A negotiated price is one that remains constant. This is the price of medication that is discussed between the pharmacy and the insurance provider. The price of the medication is what charged to the insurance company. If there is copay, it is normally much lower than the cost of the medication and the retail price of the medication. Those that choose to have insurance find they aren’t subjected to rising prices of their medications. Their medications costs won’t rise up and down as it would if they didn’t have medication insurance. Many people are often able to predict their out of pocket expense for their medications each month because they have their insurance and copay information.
To help some patients, retail pharmacies find themselves offering a prescription discount card. There are some that benefit with this but it’s not the same as having prescription drug insurance. The discount cards do offer some savings but if the price of their medications goes up, the price that is discounted is the higher price. There is nothing to stabilize the price of their medications and there is nothing that will guarantee the same predictable price each month for their medications.
Those that find themselves unsure of how Medicare Part D would benefit them should take the time to look at their situation specifically. There is a lot of information that can be given to those that take the time to call a Medicare Part D insurance provider. This information can be tailored to that individual person’s needs and medications rather than making a general assumptions. For those that don’t want to talk to individual providers, CMS is always willing to talk to those that have questions about their situation.
Medicare Part D prescription drug insurance wasn’t created to confuse people. It was created because Medicare doesn’t pay for medications and medications are very expensive for some people. Rather than allowing people to pay these prices alone or go without medications, this plan was created. It helps people predict the cost of their medications through the year, it helps them decrease the amount they spend out of pocket each month for their meds and they don’t have to worry about increasing costs of medications each year. Although this is an insurance that is offered through private insurance companies, the federal government has put rules and regulations in place to protect those that enroll in these prescription drug plans.