The new Senate bill might improve the anarchic system, but it won’t go far enough. Here’s why. Perspective by Steve MaasSteve Maas, a retired Boston Globe editor, is a freelance writer who lives in Gaithersburg, Md. August 5, 2022 at 2:56 p.m. EDT![Till Lauer for The Washington Post]()
Till Lauer for The Washington Post Comment on this storyCommentWhat is the cost of a month’s supply of the blood pressure drug lisinopril, one of the most-prescribed medications for people on Medicare?The answer is E, although a more accurate answer would be: It depends. The same pharmacy may charge a dozen or more different prices for the same drug on the same day. You could get it without insurance at Walmart for $4.Pricing for prescription drugs is about as transparent as airline fares. What you pay depends on your drug plan, whether your drug is subject to a deductible, the price tier or level it’s assigned by your plan, how much you have already spent on drugs during a given year, where you buy them, and — in the case of brand-name drugs — the whims of the pharmaceutical company.Lost in the debate over empowering Medicare to negotiate prices directly with pharmaceutical companies is how the current system stymies even the savviest seniors from obtaining the lowest drug prices.I volunteer for a nationwide organization that provides Medicare counseling. Over the last five years, I have helped hundreds of people navigate the maze of Medicare and its associated private insurance plans. (Senior centers generally offer appointments for free help with Medicare.) Whether I am helping carpenters or college professors, the question is always the same: Why is this so complicated?The short answer is that Medicare drug insurance is a product of compromise after decades of debate in Congress. The government sets the ground rules for drug coverage either through stand-alone Part D plans or through benefits embedded in Medicare Advantage plans. This year the government is projected to spend $111 billion on Part D benefits. As of now, the government is forbidden to negotiate drug price; the Inflation Reduction Act proposed by Senate Majority Leader Charles E. Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.Va.) would permit Medicare to negotiate the prices of 10 drugs, scaling up to 20 by 2029. Additionally, the act would cap out-of-pocket drug spending under Medicare at $2,000.The system embodies the worst of the private and public sectors. Insurers profit from consumers who lack the time or mental faculties to choose the best plan, and they profit from government subsidies for what in some cases are vastly inflated drug prices. Government red tape trips up the unwary with multiple coverage phases and limited opportunities to join or change insurance plans. And the power of insurance to spread risk is undermined by the balkanization of the marketplace.Medicare’s open enrollment period is Oct. 15 through Dec. 7, so now is a good time for the 64 million Americans who qualify — and in many cases their caregivers — to dissect the system. Here is a hurdle-by-hurdle guide to the Medicare obstacle course. (To simplify matters, I am focusing on Part D plans, although Medicare Advantage plans suffer from similar flaws. The prices I cite are for Montgomery County, Md., as of the end of June, and may already be out of date by the time you read this — they change that often.)The dizzying array of drug plans. Whoever said the more choice the better did not have a Medicare Part D plan. If you elect to go on traditional Medicare, as opposed to Medicare Advantage (which generally covers drugs), you must choose a Part D plan to cover prescription drugs or else face a penalty for delaying that enrollment. Depending on where you live, you may have a choice of two dozen or more plans, many with names barely distinguishable from one another.Part D plans differ in premiums, deductibles, co-pays, formularies, tiers and preferred pharmacies. If you take no drugs, your decision is easy: Take the plan with the lowest premium. Otherwise, you must rely on a comparison tool on the Medicare.gov site. You input the names of the drugs you take, and the calculator ranks plans based on total cost — that is, premiums plus co-pays — for the remainder of the year. Higher premiums do not necessarily correlate with lower co-pays.Everyone has different pharmaceutical needs. In many cases, one drug may drive your decision — typically a brand name or a high-tier generic that only a few plans cover effectively. In effect, the Part D system slices the market into as many groups of consumers as there are plans. Insurance is supposed to spread risk over as large a population as possible. Not our system. People who are healthy win; people who are less so lose, in some cases big.Let’s say you take five common generic drugs: atorvastatin (for cholesterol), levothyroxine (for hypothyroidism), lisinopril (for high blood pressure), metformin (for diabetes) and bupropion (for depression). You are signing up for Medicare as of July 1, 2022, and your choice of pharmacies is CVS, Giant, Safeway, Walgreens or mail order.A plan finder on Medicare.gov calculates plans by cheapest to most expensive based on the estimated total cost for the remainder of the year, in this case six months. The cheapest plan for this set of drugs is Cigna Essential Rx, if you make your purchase at Walgreens. The premium is $31.20 a month. Your only co-pay at Walgreens would be for bupropion, which is also the only drug subject to the $480 deductible. Assuming you stay on the same medications, you would never reach the post-deductible phase, when the cost of bupropion would fall from $5.81 to $1.05.Cigna Essential Rx, $31.20 monthly premium plus copays in late June, Montgomery County, Md.:Overpaying for premiums. Under the Cigna Essential Rx drug plan shown above, your total cost (premium and co-pay) for July to December is estimated at $222.06 at Walgreens. I’ll show you how to drive your tab down to under $100.Generic drugs, for example, may be cheaper with a coupon than with your drug insurance. You can comparison shop on websites such as GoodRx.com and SingleCare.com. Plug in the name of the drug, and the site will list the prices it has negotiated at pharmacies in your area. In June, I found a month’s supply of bupropion for $3.94 at Safeway on GoodRx.com; if you use your Cigna insurance there, you’d pay no co-pays for your other drugs but $10.55 for the bupropion.In fact, you’re paying more by being on the Cigna plan, whether you use Walgreens or Safeway. Recall that its premium is $31.20 a month. If you take bupropion out of the drug list and re-run the plan finder, the new winner is SilverScript Smart Rx, with a premium of $7.10 a month. You would use GoodRx for the bupropion and the insurance for the other drugs, which cost $1 each in monthly co-pays. Your total tab for half a year: $90.24.Now, there’s no guarantee that coupon prices will stay the same from month to month, but you have a wide array of websites to shop, if you invest the time.(Bonus tip: Coupon sites often are much cheaper than drug plans when it comes to generics for products such as Viagra and Vagifem.)Ignoring open enrollment. Most Americans do not bother to review their plans during the annual open enrollment period, according to a survey by Kaiser Health News. They should. I routinely see clients save hundreds of dollars by switching plans. Even if your prescriptions have not changed, your drug plan may have doubled its premium, changed its preferred pharmacies, removed some of your medications from its covered drugs (known as the formulary), placed your drugs in a higher price tier or made them subject to a deductible.The daunting deductible. In 2022, Medicare allowed drug plans to charge deductibles of up to $480. The deductible is the amount you have to spend overall on prescriptions before the insurance coverage kicks in. If you take only cheap generics, you usually do not have to worry about the deductible; you get the lowest price from the get-go. But you generally must meet the deductible before the insurer starts sharing the cost of high-tier generic and name-brand drugs. Compounding the confusion, the same drug may be subject to a deductible on one plan but not on another — and it may be on an inexpensive tier on one plan, a high-priced tier on another.High-premium plans tend to have lower deductibles or none at all. They often are more cost-effective if you are signing up late in the year, since you will arrive at the post-deductible phase sooner. Conversely, if you sign up early in the year, a low-premium plan may make more sense since you have more time to reach the deductible.Changes in your health. Unless your income is low or you qualify under special circumstances, you can change drug plans only during open enrollment. Unfortunately, your body doesn’t know that. For example, suppose your doctor prescribes insulin starting in September. Let’s add the NovoLog 100 unit/ml solution pen injector to the drug list given earlier. If you’re on SilverScript Smart Rx, your cost for the rest of the year — premiums and co-pays — would be $708. If you were allowed to switch to SilverScript Choice, with a monthly premium of $30.50, your total cost would be $162 for those four months. With both insurers, the cost does not include bupropion, which you purchase with a GoodRx coupon.Your doctor can always appeal to the insurer to grant an exception — either to add the drug to the plan’s formulary or place it on a lower tier. The insurer, however, is under no obligation to grant it.“Preferred” pharmacies. Insurance plans identify preferred pharmacies, where ostensibly you will find the lowest co-pays. However, that is not always the case for all prescriptions. For example, the Cigna Extra Rx plan lists Walgreens among its preferred pharmacies, but its negotiated price for a month’s supply of estradiol (generic Vagifem) 10mcg tablets is $160.79 at Walgreens, compared with $40.47 at CVS, with the cost dropping to $80.40 at Walgreens and $20.24 at CVS after you meet the deductible.Mystery and unpredictable pricing. Each plan lists what it calls the “retail price” of a drug. That is what you would pay for most higher-tier drugs until you reach the deductible or for medications that are not on the plan’s formulary. After you reach the deductible, you pay a fixed price if the drug is on what is called a preferred tier, but coinsurance — a percentage of the retail price — if the plan classifies the drug as non-preferred or specialty. Tier classifications vary among plans, as do the cost percentages.If that’s not confounding enough, the retail prices vary widely. Consider a 30-gram tube of clobetasol propionate 0.05 percent ointment, a corticosteroid used to treat various skin conditions. The retail price is $5.67 on AARP MedicareRx Walgreens, compared with $255.51 on AARP MedicareRx Saver Plus. You can buy it for as little as $8.05 at Costco with a GoodRx coupon.The Medicare plan finder cautions that it provides “estimated” drug costs. The “retail prices” listed here may change within months, even weeks, of when you signed up for a plan, which would affect your coinsurance. If your overall drug costs are high, prescriptions with fixed co-pays will be affected. And that brings us to …The dreaded doughnut hole. Once you and your plan spend a specified amount on prescriptions in a year — $4,430 in 2022 — you enter the coverage gap, commonly known as the doughnut hole. During this period, your co-pays are capped at 25 percent of the plan’s negotiated price. That can be good news and bad news. For example, if you are on Eliquis and estradiol and covered by Wellcare Medicare Rx Value, you will see your Eliquis go from a fixed $47 co-pay to $141.58, but the estradiol will drop from $72.94 to $36.47.The plan finder will estimate when you hit the doughnut hole. It can’t say for sure because, as noted earlier, prices may change. If they go up, you may find yourself in the doughnut hole sooner than expected.If you have high expenses, you could reach the catastrophic phase. After your out-of-pocket spending plus the discounts you received during the coverage gap reaches $7,050, your share of drug prices falls to 5 percent of the “retail rate.” But for some newer drugs that 5 percent still could come to hundreds of dollars a month. Medicare has no cap on out-of-pocket spending.Going without. If you have made it this far, you may be questioning whether drug insurance is worth the hassle. As with all insurance, you buy it to protect yourself from worst-case scenarios. Some revolutionary, life-changing medications cost $10,000 or more per month without insurance. If you do not sign up for Medicare when you turn 65 or when you or your spouse loses employer-paid insurance, you face restrictions on when you can sign up for a drug plan. Further, you pay a penalty that mounts the longer you delay. It is 1 percent of the national base beneficiary premium multiplied by the number of months you have been without coverage. If you delayed 10 years, you would pay the government a penalty of $40 a month, based on this year’s base premium. You would be stuck with that penalty the rest of your life, and it would be adjusted annually if the average premium changed.Imagine if Medicare, like most employer insurance plans, offered a single drug plan. Costs would be spread over a risk pool of 65 million enrollees, rather than divvied up among more than 750 Part D plans nationwide and scores more Medicare Advantage plans. An 85-year-old grandmother would not have to worry each fall about changing plans. A 70-year-old father diagnosed with diabetes in June would not face the prospect of super-high costs until he is eligible to select a new plan. No one would have to worry about which pharmacy is in or out of network.Other nations manage to offer their seniors a system like this. Why can’t we?
