What Is The Coverage Gap When I Pick Up Medication?
Question: I just picked up my medication and the cost went way up? The clerk told me I hit the coverage gap.
Answer: Last week I spoke about a possible reason for change in costs of your medications. This week I will cover the Medicare Part D coverage and the four phases of coverage: Deductible, Initial Coverage, Coverage Gap and Catastrophic Coverage. The retail cost of your medication moves you through those phases of coverage. The Deductible for most plans is $480 this year. Not all plans have that $480 deductible, some lower the amount, with a couple plans having $0 deductible. During the deductible you pay full price for the first $480 worth of medication. In the next phase- Initial Coverage- you pay approximately 25% of the cost of the medication, and the insurance company pays the remaining 75% of the cost of the medication. During this Initial Coverage phase, many of the plans set specific dollar amounts for the different Tiers of medication (for example, Tier 2-$14, Tier 3-$42 or Tier 4-$90). The Initial Coverage phase lasts until your total medication cost (full price) reaches $4,430. At that time, if you reach it, you move to the Coverage Gap phase (Donut Hole), where costs usually change for you. During the coverage Gap, all medications cost a mathematical 25% of the retail cost. The Coverage Gap phase lasts until your retail medication costs equal $10,690. Next is the Catastrophic Coverage phase where you only pay 5% of the total cost of the medications. The Catastrophic Coverage lasts for the remainder of the year. Most people never reach this phase of coverage.
Let me illustrate these phases further with a couple of common medications. I am simply using them to illustrate the pricing phases.
Let’s use the following medications: Atenolol (Generic), Advair (Brand Name) and Fluticasone/Salmeterol (Generic for Advair). I am also using pricing for a 30-day supply of each medication.
During the Deductible you will pay full price; Atenolol = $2.55, Advair = $423.48 and Fluticasone/Salmeterol = $73.08. Now the Deductible is $480, so it would take multiple months to move you into Initial Coverage. You will pay $423.48 for Advair the first time, but the next time pay the remainder of the deductible + the Tier 4 – $95 copay.
During the Initial Coverage you would pay Atenolol = $1, Advair = $95 and Fluticasone/Salmeterol = $42. Those prices last until the total price (retail cost including your copay) of the medications add up to $4,430. That would take approximately 11 months, if you took Advair, if you took the generic version you would never reach the coverage gap. Once your total cost of your medications has gotten to $4,430 you move to the Coverage Gap.
During the Coverage Gap you would pay 25% of the retail cost; Atenolol = 64 cents, Advair = $105.87, and Fluticasone/Salmeterol = $18.27.
During the Catastrophic Coverage you would pay; Atenolol = $2.55, Advair = $21.17 and Fluticasone/Salmeterol = $3.95.
As you look at those prices you see some pretty significant pricing changes. You also may note that Atenolol costs more during Catastrophic Coverage than it did during the Coverage Gap. That is because during Catastrophic Coverage there is a minimum price (unless retail is less than that). For Generic that minimum cost is $3.95 or $9.85 for Brand Name medications.
Sometimes I hear people say they won’t take their medication because it costs too much, and that is NOT a good decision. You should work with your physician and your pharmacists to see if there are alternative, cheaper medications, or discount programs available.
Also look into EPIC (Elder Pharmaceutical Insurance Coverage), the New York State Prescription Drug coverage available to those over 65, who live in New York State, make less than $100,000 for a couple or $75,000 for a single person and who have a Part D prescription drug plan. The EPIC contact information is 1-800-332-3742, to find out more about EPIC and how it can help. EPIC would be secondary coverage for your prescription medications.
I hope that this helps to explain why your medications cost so much. I also hope that you find a way to help pay for those increased costs or reduce the costs you pay.
Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions and concerns or to reach Janell Sluga, GCMC, call 716-720-9797 or email SLM@lutheran-jamestown.org.