For a variety of reasons, prescription drug prices in the United States tend to be higher than in other places in the world—so if you’re concerned about budgeting for medication, you’re certainly not alone. Read on for a quick guide to prescription drug costs and coverage, along with a few tips that could save you money.
What’s Covered by Insurance?
Every insurance plan should have a drug list, which outlines exactly what’s covered, what’s not, and what kind of co-pays or co-insurance to expect. Find out the name of the prescription drug you need, then check it against your insurer’s drug list. You should be able to easily see whether or not it’s covered by the plan, and if there are any cost-sharing requirements or other specifications.
Besides checking the drug list, the easiest way to find answers may be to call up your insurance company. You should be able to find their phone number on the back of your insurance card, or via an online portal. Ask your customer service agent for more specifics on what’s covered and what out-of-pocket costs you can expect for a particular prescription.
What’s Covered by Medicare?
If you receive healthcare coverage through Medicare, you have the option to sign up for Medicare Part D. By signing up to Medicare Part D, you are effectively adding on prescription drug coverage to your existing Medicare plan. All Part D plans are required to cover at least two drugs from the most commonly prescribed drug categories, and must cover all available drugs in some categories like antidepressants, immunosuppressant drugs, and anticancer drugs.
To read more about Medicare Part D, check out this article from HUECU’s Medicare 101 series.
What Costs Can I Expect?
Your out-of-pocket costs for prescription medication will, of course, vary widely depending on what drugs you need and your current health insurance plan. Many plans have a prescription drug deductible, which indicates how much you’ll need to pay before your insurance kicks in. There may be a copay as well, or a small amount of money you pay for every prescription. These figures will likely differ depending on the tier of the drug, as listed by your insurer.
For Medicare Part D beneficiaries, the average monthly premium is $43. The federal government also mandates that no Part D plan can have a yearly deductible higher than $505 (as of 2023), which means that no recipient will need to pay above this figure before their prescription drug coverage kicks in.
Tips to Save
The first step to saving money on high-cost prescriptions is to check if there is a generic version of the brand-name drug you’re currently taking. Of course, talk with your doctor and your insurer to understand your best option in terms of specific medication. If you’re unhappy with your employer-sponsored plan’s prescription drug coverage, you can consider shopping for an individual plan through your state’s health insurance Marketplace. You may qualify for premium tax credits or extra savings on an individual plan, depending on what’s offered (or not) via your employer.
Medicare Part D beneficiaries have a few options available to help save money on prescription drugs. Firstly, head to medicare.gov to find out if your state has a Pharmaceutical Assistance Program. These programs are designed to support lower-cost prescriptions for individuals who meet certain income parameters or are living with disabilities. Prescription Advantage is available in Massachusetts.
Part D recipients who are in the “donut hole” (a coverage gap that occurs after a yearly cost limit has been reached) and concerned about new cost responsibilities have a few options to save money on prescriptions. Firstly, check out alternate Part D plans with a higher premium, but which include donut hole coverage. You can also take advantage of the federal government’s Extra Help program. This program helps to pay for Medicare beneficiaries’ Part D premium and other prescription drug costs. Eligibility for Extra Help is based on income: people with a monthly income of up to $1,843 in 2023 or $2,485 for couples should qualify.