For Prescription Drugs

The adage, “An aspirin a day keeps the doctor away” may still ring true for some, but the rising costs of prescription drugs seems incurable. According to 2022 data from the Kaiser Family Foundation, more than half of drugs covered by Medicare have experienced price increases faster than inflation¹.

So, how do you get the medications you need and save the most money?

About three quarters of all Medicare beneficiaries are enrolled in a Medicare prescription drug plan². While they do help pay for medications, the full costs may not be covered, leaving many Medicare beneficiaries struggling with the expense. But there’s help available if you know where to look. Consider these ways to maximize your benefits — and your savings:

Assistance programs

Medicare’s Part D Low-Income Subsidy, also called the Extra Help Program, is designed for those with limited income. The program covers many out-of-pocket costs such as premiums, deductibles, copays and coinsurance for those who qualify. In 2024, eligible individuals will benefit even more through the expansion of the Extra Help Program.

Generic vs. brand name

If there’s a generic version of a brand-name drug, Medicare gives a price incentive to choose the generic since they offer the same quality and efficacy as brand-name drugs. They’re so popular that many plans, pharmacies and doctors automatically choose the generic version unless there’s a compelling reason to justify the brand name. Still, it’s a good idea to check with your pharmacy to be sure you are receiving the generic if it’s available.

Choosing a pharmacy

Drug plans have provider networks, which include pharmacies that negotiate pricing with the plan. Your best pricing options will come from a network pharmacy. Some plan networks include preferred and standard pharmacies to offer a choice in cost-sharing. Out-of-network pharmacies are least likely to offer discounts to plan members.

If you take daily maintenance drugs for an ongoing health condition, a mail-order pharmacy may offer the lowest pricing. Most plans and pharmacy chains have relationships with established mail-order providers and can often provide a 90-day supply for added convenience.

Get familiar with your formulary

A formulary is a list of all the drugs covered by a prescription drug plan. Each drug is assigned a pricing level, known as tiers. Your out-of-pocket drug costs will largely depend on which tier each drug falls into. Typically, drugs in lower tiers are least expensive; drugs in higher tiers cost more.

When considering a new drug plan, check the plan’s formulary to be sure the drugs you take are covered. There may be special requirements such as individual deductibles for a particular drug, and you can find out which other covered drugs might be available in the same category.

Discount programs

For added savings, consider a prescription discount card such as GoodRx, SingleCare and others. These cards work like coupons and can’t be used with Medicare prescription drug plans, but they may offer a less costly alternative than what’s covered by your plan. Before signing up for a discount card, check to see if the medications you take are covered.

Reevaluate your coverage

Medicare’s open enrollment period (October 15 through December 7) is the time to evaluate your Medicare coverage and shop around to see if there’s a better option for you. Look for changes in pricing and the plan’s formulary. There may also be new plans to consider, and existing plans may no longer be available. If you want to change to a new plan outside open enrollment, you would have to qualify for a special enrollment period that allows you to switch plans without waiting.

Relief is in sight

Medicare beneficiaries can breathe a little easier now that The Inflation Reduction Act of 2022 is taking effect, and will continue into the near future. The covered insulin copay is now capped at $35 per month, and beginning in 2024 the Part D premiums cannot increase more than 6% a year through 2029. Starting in 2025, the out-of-pocket maximum for prescription drugs will be capped at $2,000³.

Medicare Prescription Payment Plan (M3P)

Beginning in 2025, If you have high out-of-pocket drug costs, the Medicare Prescription Payment Plan (M3P) may be beneficial to you. This is a program created under the Inflation Reduction Act that requires Part D prescription drug plans to provide enrollees with the option to pay out-of-pocket drug costs with monthly payments over the course of the plan year instead of all at once to the pharmacy. Program participants will pay $0 to the pharmacy for covered Part D drugs, and Part D plans will then bill you monthly for any out-of-pocket drug costs you incur while in the program. Pharmacies will be paid in full by the Part D plan.

If you face high out-of-pocket drug costs, this program can help you manage the costs by spreading them out over the course of the plan year. While this program is available to anyone with Medicare Part D, if you have high drug costs earlier in the plan year, you are more likely to benefit from the program. If you are eligible for the Low-Income Subsidy, enrollment in the Extra Help program is more advantageous than the Medicare Prescription Payment Plan. You can opt in to the program at any time during the plan year.

If you are interested in this program, please contact your prescription drug plan or your pharmacy.

When it comes to your health, Alight is on your side –– with advocates who can help you navigate the costs of care and prescription drugs. You should also ask questions of your doctor and pharmacist about any medication you’re prescribed –– and the best way to find savings.

¹ Prices Increased Faster Than Inflation for Half of all Drugs Covered by Medicare in 2020
² An Overview of the Medicare Part D Prescription Drug Benefit
³ How Medicare Prescription Drug Reforms in the Inflation Reduction Act Help Low-Income Older Adults

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