Even for people on Medicare, out-of-pocket costs for medications can become concerningly high. We sat down with Julie Carter, a Senior Federal Policy Associate at the Medicare Rights Center, to discuss how to manage out-of-pocket costs for prescription drugs.
1. Far too many Medicare beneficiaries have difficulty affording out-of-pocket costs for their prescription medications. From your perspective, what is the one policy change you would recommend that could help this population?
At Medicare Rights, healthcare affordability is one of the major issues we hear about each year, and difficulty affording prescription drugs is one of the primary problems. To cope with high out-of-pocket costs, people with Medicare may not fill prescriptions or may try to split pills or spread out their medications in ways that may put their health at risk.
An out-of-pocket maximum for Part D prescription drug coverage would help people access their needed medications. Currently, there is no cap for the amount an individual can spend in a given year, which means that some people have devastating bills during major health crises.
We would also like to see an increase in the income threshold for the Low-Income Subsidy (LIS)—also known as “Extra Help”—which helps people pay for monthly premiums, annual deductibles and co-payments in their Part D coverage. The current income threshold is under $15,000 per year, and people with considerably higher incomes than that can struggle to afford medications. By raising the threshold, we can ensure that more people can afford the prescriptions they need.
2. What information or tips do you offer Medicare beneficiaries regarding managing their out-of-pocket costs?
First, we encourage eligible people to enroll in Extra Help/LIS and their State Pharmaceutical Assistance Programs (SPAPs) if available. If they don’t qualify for that assistance, it is vital that people choose the Part D plan that best covers the drugs they need and take. But this is more complicated than it sounds. There are lots of variables and people are often confused when they are trying to choose the right plan and need to understand the plan formularies. Most people have also never been told how to ask their plan to cover drugs not on the formulary or otherwise reduce the amount they have to pay. We encourage people to work with their doctors and healthcare providers to try to find ways to save, but we feel the onus should be on Medicare and the plans to provide more useful information for beneficiaries.
3. What is the role of the patient’s healthcare team in making treatment decisions that are affordable to the patient?
For many conditions, there can be several drugs that might work well for a given patient. Under these circumstances, asking a practitioner for a different, more affordable, prescription can really help save money. For example, there may be a generic drug that costs much less. In other circumstances, though, only one drug really fits the person’s needs. Many people are not aware that they can ask for an exception to their plan’s formulary or that their healthcare provider may be able to help them with that request.
4. How can HHS improve the quality of information provided to Medicare beneficiaries regarding treatments and out-of-pocket costs?
HHS must do more to ensure that people with Medicare and their families have access to the tools and resources they need to make optimal coverage choices. Specifically, the agency should provide beneficiaries with cost information that is specific to their circumstances; as well as detailed explanations about actions beneficiaries can take to increase affordability, such as changing from a brand-name drug to a generic or requesting a formulary exception. We also think beneficiaries need better information from Centers for Medicare & Medicaid Services (CMS) about the appeals processes, and more robust plan comparison tools. These materials must be as up-to-date, user-friendly and accurate as possible—and available in multiple languages and formats.
5. HHS has been talking about the possibility of moving some Medicare Part B drugs to Medicare Part D. What does the Medicare Rights Center think about this?
We agree that Part B drugs are often very expensive—some beneficiaries may spend tens of thousands of dollars a year on Part B medications! Our own work supports this finding. Medicare Rights regularly counsels older adults and people with disabilities who do not have adequate supplemental coverage (Medigap) and who are unable to afford the 20% coinsurance for costly Part B medications.
However, the idea to move drugs from Part B to Part D is not necessarily the “fix” some may think it is. It could lead to higher OOP costs for beneficiaries—depending on the individual’s coverage and combination of drugs, among other factors—while lowering costs for others, essentially creating “winners” and “losers” among people with Medicare. In addition, certain Part B drugs require careful handling and transportation, such as refrigeration. Safely handling and transporting fragile medications could be a challenge for many beneficiaries, and they should not be required to bear that risk.
6. For Medicare patients, a large amount of out-of-pocket costs are incurred early in the benefit year. Does the Medicare Rights Center have recommendations to address this?
Many people with Medicare feel the pinch of higher bills early in the year from a combination of deductibles and coinsurance/co-payments. While our proposed yearly cap would not address this problem, a similar idea that may be worth exploring is adding monthly out-of-pocket caps as well. This might help beneficiaries afford their needed medications throughout the year. More work certainly should be done in this area.
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