Why Are Part D Prescription Drug Plans So Different?

You’ve heard it before, “variety is the spice of life.” People come in all shapes and sizes, so naturally, Part D prescription drug plans will too.

From premiums and deductibles to copays and coverage gaps, there are many factors to consider. Your client depends on your knowledge to navigate through the sea of available plans, so let’s make you the expert.

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Who Gets Medicare Part D?

Seniors require more prescription drugs than younger clients. According to the American Society of Consultant Pharmacists, nearly 92 percent of older adults have at least one chronic condition, and 77 percent have at least two. Additionally, while seniors represent nearly 17 percent of the population, in 2019, nearly 90 percent of Americans age 65 and over used at least one prescription drug per month and 54 percent used four or more in one month.

And use is growing! Research shows people aged 65 to 79 receive around 27 new prescriptions for new drugs per year.

Not only is that an awfully large amount of medicine to pay for, but some drugs are more expensive than others. Seniors with prescriptions for chronic conditions like arthritis, hepatitis C, multiple sclerosis, and cancer find themselves paying through the nose for their medication. According to a study by KFF, the cost for treating these conditions ranged from $4,000 to $12,000 in 2016, and that was just for one script. So help them get Medicare Part D coverage!

How to Save Money on Prescription Drugs

As an agent, doing a little research goes a long way when selling prescription drug plans. One of the first things you should do is run your clients’ drugs through Medicare.gov to find plans that include their medication. Enhanced or Plus plans typically offer more coverage on expensive drugs. Basic plans are best suited for clients looking for immediate coverage from a low-cost plan in order to prevent late-enrollment penalties.

While knowing your clients’ ideal plan type will help you find a better fit, there are still more factors to consider between carriers. Depending on the needs of your client, some plan aspects will be more important than others.

Each Medicare Part D plan includes the following:

  • Monthly premium — the cost per month.
  • Annual deductible — the amount members must spend before initial coverage begins.
  • Initial coverage — the coverage that begins once the deductible is met.
  • Coverage gap or Medicare donut hole — the stage entered once members reach $3,750 in total drug cost for a year.
  • Catastrophic coverage — the stage members reach once they spend $8,000 out of pocket in a year.
  • In this stage, members will pay either a five percent coinsurance for covered drugs or a copay of $3.35 for covered generic drugs and $8.35 for covered brand-name drugs, whichever is greater.

Most seniors are living on a fixed income, so keeping your client’s financial situation in mind should be top priority. In addition to the varying costs for premiums, deductibles, copays, and coinsurance, plans vary in their drug pricing tiers as well as pharmacy networks.

Keeping your client’s financial situation in mind should be a top priority.

For that reason, convenience is key. Your clients will more than likely want to enroll in a plan that features their local pharmacy as a preferred pharmacy. Carriers will typically offer members lower out-of-pocket costs when filling prescriptions from a preferred pharmacy.

Short History, Big Future

Between 2006 and 2015, the Part D program saw an 11 percent increase in the use of prescription drugs. According to another KFF study, that spending is projected to grow up to six percent by 2025. Seniors are now more likely than ever to continue filling their prescriptions. Plus, each plan today is required by law to provide access to medically necessary drugs.

Seniors are now more likely to continue getting prescriptions because they can more easily afford them.

So why do drug plans have so many variations? Different plans for different people. With a little bit of research on your part, that translates to a plan that is tailor-matched to meet your client’s needs. While it’s easy enough for your clients to seek out Medicare resources, their best source of information is you. Make yourself invaluable with the required knowledge and a portfolio stocked with a variety of drug plans to choose from.

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