Chronic Ailments Increase the Challenge of Picking a Part D Plan

Choosing a Medicare Part D prescription drug plan is daunting for any beneficiary in California, but it can be even more complicated for Medicare beneficiaries with chronic conditions and their caregivers because of the need for lots of different medications, some of them quite expensive.

Multiple medications can require the consumer to select very carefully among the plans in search of the best deal. One plan might cover most but not all of the prescriptions the beneficiary uses. Or it might cover only the generic version of the medication when the patient’s physician thinks it is best to take the brand-name treatment.

For Medicare beneficiaries with chronic conditions, it is important to consider the prices of the prescriptions themselves, rather than simply the monthly premium for the drug plans. That can be a false savings, to simply look for the cheapest plan because of the potential implications of different copayments and coverage for different prescription drugs.

Stephen McConnell, vice president for advocacy and public policy at the Alzheimer’s Association, emphasizes that beneficiaries need to look beyond surface bargains. One Medicare part D plan, he noted, might have a $20 monthly premium but might not include on its formulary a couple of important and relatively expensive drugs that the beneficiary needs. Meanwhile, another drug plan offered by the same company might charge a $40 monthly premium and higher copayments in return for a more comprehensive list of covered drugs. “If people are willing to pay a larger copayment, they can often find the drug they need,” McConnell said.

The copay system is a complex topic, as some plans have tiers, or different levels of payment. Tier one, with the lowest payments by consumers, might cover generic drugs, while the second tier, with larger copays, might apply to preferred brand-name medicines that are included in the health plan formulary. Tier three, with the highest copays, would apply to brand name drugs not included in the formulary.

There is a good chance that someone with a chronic illness might have drugs scattered among all the tiers of payments. In addition, almost all people with Alzheimer’s disease have multiple chronic conditions, McConnell said. About 20% of Alzheimer’s patients also have diabetes, congestive heart failure, or cancer, or a combination of these conditions.

Certain groups of people in California with chronic illness will get extra help in paying for their medications when Part D begins because of long-standing aid programs.

For example, certain muscle relaxants used by people with spinal chord injuries will not be covered under the Part D program. Because California already had paid for those medicines under Medi-Cal, it will continue to pay for them when dual eligibles switch to Medicare for the new Part D coverage.

California has traditionally helped pay for medications for people living with HIV and AIDS through the AIDS Drug Assistance Program. The new Part D coverage will now become the basic system for paying for the drugs, but there will be “wrap-around” coordinated coverage through the AIDS Drug Assistance Program.

For example, the standard Part D program calls for a monthly premium, a $250 annual deductible and copays of 25% for drug spending up to $2,250 a year. Medicare beneficiaries who are on ADAP must pay the monthly premium for a Part D plan, but ADAP will cover the deductible and copays, provided that the drugs are on the ADAP formulary.

Between $2,251 and $5,100 in spending, the standard Part D plan opens a “doughnut hole,” where there is no Medicare coverage. When that happens, Medicare beneficiaries in most cases must pay 100% of the cost. However, within the doughnut hole, “ADAP can continue coverage for drugs on its formulary,” according to Projectinform.org, which deals with HIV/AIDS insurance issues. Once total spending exceeds $5,100, the patient pays 5% and Medicare pays 95% of the cost of any additional drug bills.

For most Medicare beneficiaries, the best strategy is to start by lining up all your prescriptions, and see where they were bought and what was paid for them, according to Sean Brindle, vice president of the Segal Co., a benefits consulting firm. Beneficiaries should talk to their doctors and see which brand name drugs are essential and in which cases generics can be safely substituted for the brand-name medication they might have been taking, he suggested.

People “really have to be savvy and examine all their options and figure which one is most advantageous for them, given the medications they are on,” Brindle said. “A lot of them are talking to their pharmacists, who are going through training and should be able to help them figure out what type of plan to use.”

The Medicare.gov calculator offers the ability to compare prices for various Part D plans. But Brindle also advises consumers to check drugstore and retail store Web sites, including those operated by CVS, Walgreens, Rite-Aid and Costco to see what prices will be charged for individual prescriptions. This provides additional flexibility in pricing. If a particular costly drug is not on a plan’s preferred list, it might be cheaper to buy it outside the Part D plan, and get the Part D program that covers the rest of the drugs used by the consumer.

The decision is further complicated by the “doughnut hole,” in part because only payments for drugs on the formulary count toward reaching the $5,100 in drug costs, where the government will then pay 95% of any additional bills.

As a result, Medicare beneficiaries must calculate closely what the year’s drug bills are likely to be, and whether it makes sense to buy a higher-cost drug within the Part D plan and perhaps reach the end of the doughnut hole, or else get those same drugs for less money at a drugstore Web site outside the Medicare Part D drug plan.

A typical Medicare beneficiary might take between five and 12 drugs, according to Aileen Harper, executive director for the Center for Health Care Rights, the counseling agency for Medicare and Medi-Cal beneficiaries in Los Angeles County. The drug roster is sometimes much longer, she noted, recalling that a staff member recently counseled someone who had 47 prescriptions.

“We’ve had a couple of instances where clients said, ‘We’ve done a search already, and none of the plans cover all the drugs we are taking,'” Harper said. The resolution of this problem may depend on beneficiaries’ financial situation and what outside help is available, she indicated.

For example, pharmaceutical manufacturers have long operated assistance programs under which they provide heavily discounted or free drugs to patients with low or moderate incomes. Now that the new Medicare benefit will begin Jan. 1, it is not clear whether these drug industry financial assistance programs will continue, Harper said.