Q. I’ve been trying to choose a new Part D plan for next year. Why does it appear on Medicare’s Drug Plan Finder that some plans charge higher prices for using mail order than going to a retail pharmacy?
A. Most Part D plans charge enrollees less for drugs bought by mail order than at a retail pharmacy, as you might expect. But you’re right: When comparing plans on Medicare’s online Drug Plan Finder, out-of-pocket costs for mail order sometimes show up as higher—sometimes substantially higher—than the retail alternative.
You need to pay attention when looking at mail-order prices on the plan finder. And look twice if you see one or more of your drugs shown at full price in the column that indicates what you’d normally pay in the initial coverage period. When a drug isn’t covered under mail order, the plan finder doesn’t say so. Instead, it just shows the full price. (There’s a reason for this: The plan finder is a comparative tool. If it didn’t show any prices for uncovered drugs in one plan, the stated overall out-of-pocket costs would make this plan look less expensive than another plan that covers those drugs.)
Medicare officials offer these explanations about pricing:
* Some plans cover certain drugs only at retail pharmacies—but not by mail order. (Since the law doesn’t require plans to offer a mail-order service, plans can decide which drugs they will or won’t cover by mail order.) This is often why the overall out-of-pocket costs on the plan finder appear much higher for mail order than retail, as explained above.
* Sometimes the plan finder makes a wrong calculation. For example, if you buy a drug that you need only once in a year, such as an annual vaccine, the plan finder can calculate the correct one-time price for the retail pharmacy option but not for the mail-order alternative—so it shows up as a monthly cost in mail-order pricing. Medicare officials say this is a technical problem that they’re trying to resolve.
* You may have entered your drug quantity information in the wrong way. The plan finder requires you to enter how frequently you take a particular drug—for example, “30 pills a month.” If you enter 90—perhaps because you’re thinking about a 90-day supply by mail order—the plan finder will interpret it as 90 pills a month and calculate a higher price for the additional quantity.
* Certain drugs need special handling and cannot be sent through the mail. (They are usually available only from pharmacies that can store them properly.) These drugs are not covered under mail order, so the full price appears on the plan finder.
* Some plans negotiate retail and mail-order prices separately, using different pricing mechanisms. Sometimes this results in higher prices for mail order, which in turn increases enrollees’ costs in the deductible and coverage gap periods. It can also affect your costs in the initial coverage period if your plan charges coinsurance (a percentage of the cost) instead of a flat copayment.
Bottom line: If you decide to join a Part D plan based on its mail-order prices, first call the plan and double-check what you would pay.
Patricia Barry is a senior editor at the AARP Bulletin.