Q. Before I switched to a new drug plan, I called twice to check its price for my two prescriptions. Each time I was told $25 a month for each. But when I went to the drugstore, I was charged $45.50 for one and $140 for the other. This never happened with my old plan. Have I been cheated?
A. No, you haven’t been cheated, but it sounds as though the drug plan’s customer service representatives didn’t give you the full picture. Your current plan has a deductible of $295 that you must meet before coverage begins. If your old plan didn’t have a deductible, this explains why you haven’t encountered this situation before.
Medicare law allows Part D drug plans to charge an annual deductible up to a maximum amount ($295 in 2009). Some plans’ deductibles are lower ($50, $100, $175 for example). And some plans don’t charge any deductible, so their coverage begins on day one.
For most people, the deductible period begins in January, or whenever they first fill their prescriptions after the start of the year. There’s no reduction for those who join Part D later in the year; they must still meet their plan’s full deductible before coverage begins. People who stay in the same plan from year to year must meet the required deductible every year. Some plans that do not charge a deductible one year may do so the next year, or vice versa, so you need to pay attention to the details in the “Annual Notice of Change” letter that your plan sends you every fall.
If your plan has a deductible, you pay the full cost of your drugs out of pocket, at the prices your plan requires, until you reach the amount of the deductible.
Here’s how the system works in terms of cold cash, taking the example of the reader who asked this question:
January: He pays $185.50 ($45.50 plus $140, his plan’s full price for the two drugs) for his first month’s prescriptions. This is all deductible.
February: He pays $135. This includes $109.50 for the balance of the deductible ($295 minus $185.50) and $24.50 for the first bit of coverage.
March through December: He pays $50 a month—a $25 copayment for each of his two drugs.
The total cost of this beneficiary’s drugs (what he pays and what his plan pays) comes to $2,226 over the whole year ($185.50 times 12), so his coverage continues until the end of the year.
But what if he adds more drugs or starts taking more expensive ones? If his costs rise above $2,700 from the beginning of the year, then he will fall into the coverage gap (the “doughnut hole”). If that happens, he must again pay full price until his own out-of-pocket costs (excluding premiums) reach $4,350, at which point he becomes entitled to low-cost catastrophic coverage until the end of December. This cycle (deductible—initial coverage—no coverage—catastrophic coverage) repeats itself every calendar year.
But do the Part D plans’ customer service reps go through all this explanation when would-be enrollees call to find out how much they’ll be charged for the following year? Not always, according to readers who complain that they were told only the copay amounts for the initial coverage period, and nothing about the deductible or doughnut hole.
Medicare requires plans to give complete information about their coverage policies on their websites and in the materials (such as Evidence of Coverage documents) that they send to people who enroll. But the agency gives no guidance on how the plans’ customer service reps should respond to questions on the phone.
Bottom line: If you think you’ve been charged too much when you first fill prescriptions under your plan, first check to see whether it has a deductible and, if so, how much you have to pay until coverage kicks in. If your plan doesn’t have a deductible, ask the plan to explain why you’re being charged more than the required copay. There could be several reasons:
• If you go to a pharmacy that’s not in your plan’s pharmacy network, you’ll be required to pay more than the copay, maybe even full price, except in certain unavoidable situations. You can find a list of the network pharmacies that accept your plan’s card in its Evidence of Coverage document or on its website.
• If your prescribed drugs are subject to any of your plan’s restrictions, such as prior authorization, the plan won’t cover them unless it grants you an exception to its policy. You need your doctor’s help to request an exception, as explained here.
• The plan or the pharmacy may have made a mistake. If the plan doesn’t resolve the problem promptly, you have the right to file a complaint with Medicare by calling its help line at 1-800-633-4227.
Patricia Barry is a senior editor at the AARP Bulletin.