As of 2020, nearly 63 million Americans — one out of every five — are enrolled in the Medicare program, and the number is only growing. As more and more patients enroll in Medicare plans, many of them will come to your pharmacy asking for health plan advice. After all, you know what medications they're taking and what their basic health needs are. Plus, you have more experience navigating Medicare than they do — right?
When it comes to Medicare prescription plans, your patients can choose to purchase a standalone prescription drug plan (PDP), a PDP with a Medigap Supplement, or a Medicare Advantage plan. So, which one should they choose?
That depends on the patient and where your pharmacy is located.
Comparing Medicare Advantage with Medicare Part D
Before we get into which plans are right for your patients, we first need to differentiate between the plans that are available.
Standalone Medicare Part D Plan
Patients can enroll in a standalone Medicare Part D plan if they are enrolled in Medicare Parts A (hospital services) and B (outpatient services), commonly called Original Medicare. Part D is another name for a Medicare Prescription Drug Plan. Since Original Medicare only covers 80% of Part A and Part B costs, a supplemental policy (Medigap) can be purchased to pay the out-of-pocket costs not covered by Original Medicare. It's important to note that, for a patient on a standalone PDP, there is no annual cap in out-of-pocket costs.
Medicare Advantage is a type of Medicare plan offered by private insurance companies that contract with CMS. It combines all the benefits of Medicare Parts A and B into one plan, and most also include prescription drug coverage. These plans act similarly to private insurance or the insurance a patient would get through an employer. Some plans also offer additional benefits like dental, vision and hearing coverage.
The biggest differentiator between a standalone PDP and a Medicare Advantage drug plan is the cost the patient pays each time they pick up a prescription. Under a standalone PDP, a patient pays a coinsurance fee on their prescriptions — usually 20% — while the plan pays the rest. For patients with even one costly medication, this could add up to thousands of dollars in out-of-pocket costs. By contrast, patients pay a set copay for each prescription under Medicare Advantage drug plans, typically $5 or less.
What is a Medigap Supplement?
Medicare Supplemental Insurance, also known as Medigap, does exactly what its name implies: it supplements a patient's Medicare plan and helps to cover health care costs like copays, coinsurances, and deductibles. Medigap is only available to individuals on Original Medicare; Medicare Advantage patients cannot purchase a Medigap policy.
In addition to helping cover the cost of office visits and lab work, Medigap supplements also cover the coinsurance costs for prescription drugs under a PDP. However, Medigap supplements are an additional cost to the tune of hundreds of dollars per month; they are not included with Medicare Part D plans. Many patients — particularly those on a fixed income — cannot afford the high costs of a Medigap supplement.
What Difference Could Medicare Advantage Make for Patients?
There are a lot of factors to consider when helping patients compare Medicare plans. Patients on lower cost generics could do well in a standalone PDP, although not having a Medigap supplement opens them up to financial liability with one costly diagnosis. Purchasing a supplement with their PDP will help with office visits and cover the 20% cost of prescriptions that Original Medicare doesn’t cover, but it could raise monthly costs to an uncomfortable level for certain Medicare patients.
Some Medicare Advantage plans have higher premiums than Original Medicare plans, but not all MA plans are the same. For instance, in cities with large populations, the competition between plans is so strong that many Medicare Advantage plans actually come without a premium. If your pharmacy is in a bigger city, be sure your patients are checking premiums for the available MA plans. The ones who can’t afford a Medigap plan could really benefit.
In the end, patients shouldn't choose a Medicare plan based on their physical health. That's something that can change at a moment's notice. A patient who is in good health one month can be diagnosed the next month with a chronic condition that will require thousands of dollars of maintenance medications. Instead, a patient should choose a Medicare plan based on their financial health. They know what they can afford, and it's likely you do, too. If you are advising your patient to purchase a Medicare Part D plan, but they're planning to forego a Medigap supplement because they can't afford the additional cost, they're gambling with both their physical and financial health. A Medicare Advantage plan could give them the coverage they need — both now and in the future — for less.
Medicare enrollment has never been easy, and that doesn't look to be changing any time soon. However, don't worry if you don't know all the ins and outs of Medicare. That's why there are solutions like FDS Amplicare Match as well as insurance agencies like HealthPlanOne. They help pharmacists like you provide accurate, unbiased plan comparisons for patients with an emphasis on health plans that save on patient out-of-pocket costs without requiring them to switch pharmacies.
For more information on how Match can help your pharmacy during Open Enrollment, visit https://info.amplicare.com/2021-medicare-annual-open-enrollment.