As the New Year rolls in, your local pharmacy staff is getting prepared to deal with new insurances, and even more fun, reset deductibles. As everyone else is partying to ring in the new year, we are meditating and managing our stress in any way possible to prepare for the crazy days ahead. Although our patients have had insurance year after year, they seem to forget that with a new year comes reset deductibles. The question we seem to get nonstop at this time of year: "I didn't pay that much for my medication last month!"
If this is not making any sense, let me break it down for you:
Most insurance plans, especially Medicare Part D plans, have a complicated cost structure. All plans have a monthly premium that is paid for by the member (or by the employer in commercial plans). This is paid whether you use the insurance or not, it is the monthly charge for just having the insurance plan. This is pretty straight forward, it is like the monthly charge for any service you pay for, such as Netflix, your cell phone, etc. Here is where things start to get complicated. Before the insurance plan starts to cover things fully, you have a yearly deductible that must be met. You will be paying a higher price, or even full price, for medications/services until the deductible is paid. Different insurance plans have different deductibles, so be sure to keep that figure in mind when choosing a plan.
As an example, if you have a $5,000 deductible, you could be paying full price on a $1,000, covered medication until you have paid down the $5,000. Office visits and other services can go towards your deductible too, so you might notice an increase in cost, compared to last month, on more than just your medications. Once you have met your deductible, that $1,000 medication might come down to a $47 copay, as determined by the plan.
Side note: all of those coupon cards you get in the mail advertising "80% off of medications" and the ever-so-popular GoodRx won't apply to your deductible if you use them. A lower price might sound good in the moment, but if you intend to pay down your deductible, it is better to just bite the bullet and pay the higher price.
Once you pay off your deductible, you should notice a pretty significant decrease in the prices you pay for medications/services. But, things get more complicated here. Some commercial plans have an "out-of-pocket maximum", meaning that once you reach a certain threshold, the plan will start to fully cover (mostly) everything.
Medicare Part D plans have something similar, except that when you reach this threshold you will enter the "donut hole" and the plan will pay pretty much nothing. You get a discount on medications, but it will be more costly than the copay/coinsurance you had been paying. Then, once your total out-of-pocket spending reaches an additional threshold ($7,400 in 2023), you reach "catastrophic coverage" and the plan will cover mostly everything on covered medications/services, depending on the plan. There may be a set copay/coinsurance, but it will be less than the copay/coinsurance you were paying before the donut hole.
So, keep this in mind the next time you are heading to the pharmacy. If you notice longer than usual wait times, please be kind to your pharmacy staff and remember that they have been dealing with more upset patients than the usual (we have upset patients on a daily basis), mostly having to do with us explaining that the price is higher this month because of the deductible.
For more info on Medicare Part D coverage costs, click here.
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