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Medicare Part D: Pharmacies Matter, Too

Since the release of Medicare Part D plans (PDP) in 2006, helping clients determine which drug plans are the most competitive has become a cornerstone of the industry.  When you boil it down, comparing PDP plans is purely a numbers game, and with an average of 23 plans to choose from in each region it’s no wonder customers look to us for guidance.

I was recently helping an agent in Green Bay, Wisconsin compare plans for a current client on a stand-alone PDP.  We ran her drug list on Medicare.gov’s Plan Finder and came up with a list of plans sorted by estimated annual cost, and were surprised when we learned the client had 5 other options to choose from that had lower costs.  The differences weren’t too drastic between the choices, but enough to consider a change this AEP.  The agent also explained her client was looking to save as much as possible to help loosen up her budget, things had gotten tight this past year.

This brought up a question that caught the agent off guard,  “Would your client be willing to use a different pharmacy?”.  Normally, the process to lower one’s Rx costs is to change plans entirely, but a simple change of pharmacy can result in much greater savings and it’s something that can be done any time of the year.  After researching some other pharmacies to use (Medicare.gov allows you to select two pharmacies max), the client is staying with their current plan but will start using a different pharmacy right away for instant savings.

To illustrate just what I’m talking about, I ran a list of medications through Medicare.gov and compared three different plans at 5 different pharmacies plus utilizing mail-order.  I grabbed the top 5 prescribed medications in the United States and tossed in an insulin for comparison’s sake; atorvastatin 20mg, levothyroxine 100mcg, lisinopril 10mg, omeprazole 20mg, metformin 500mg and Humalog Kwikpen 100ml.  Here’s what I found, and one plan’s differences were astounding!  Note: this also applies to Medicare Advantage plans that include Part D coverage.

Company 1

  • Pharmacy A – $2,389.94 annual cost
  • Pharmacy B – $2,256.60 annual cost
  • Pharmacy C – $2,442.84 annual cost (highest)
  • Pharmacy D – $2,404.79 annual cost
  • Pharmacy E – $2,179.28 annual cost
  • Mail Order – $2,066.61 annual cost (lowest)

Company 2

  • Pharmacy A – $2,283.90 annual cost
  • Pharmacy B – $2,058.29 annual cost
  • Pharmacy C – $2,467.82 annual cost (highest)
  • Pharmacy D – $2,068.97 annual cost
  • Pharmacy E – $2,398.45 annual cost
  • Mail Order – $2,049.90 annual cost  (lowest)

Company 3

  • Pharmacy A – $12,302.76 annual cost (highest)
  • Pharmacy B – $2,098.27 annual cost
  • Pharmacy C – $2,447.67 annual cost
  • Pharmacy D – $2,623.86 annual cost
  • Pharmacy E – $12,302.76 annual cost (highest)
  • Mail Order – $2,029.86 annual cost (lowest)

Company 1 had a difference from highest to lowest of $376.23, Company 2 was $417.92 and Company 3 was north of $10,000!  Mail order came up being the most competitive option for each carrier, but we know many of our clients enjoy their monthly visit to the drug store and some pharmacy-to-pharmacy savings were as high as $525.  Putting that money back in their pocket can stretch a long way for our clients, so it pays to compare not only plans, but pharmacies as well.  Plus, the more you compare the more you’ll understand which pharmacies offer the lowest drug costs, and you can even find some that offer $0 maintenance medications regardless of insurance coverage.

In the numbers game that is Medicare Part D plans, don’t forget that drug costs among pharmacies can hold some of the greatest potential savings for your clients!

Sources: www.Medicare.gov and www.kff.org/medicare/fact-sheet/the-medicare-prescription-drug-benefit-fact-sheet/

Chris Hagerstrom

Chris Hagerstrom is the Director of New Business Development at Jack Schroeder and Associates, Inc. Through years of experience he has become an expert with Medicare, Life Insurance, Annuities and Supplemental Health and how to successfully navigate the senior market.