Most people know very little about insurance. But one thing almost everyone understands is the word “deductible.” You pay that first before the insurance company is on the hook for any costs.
When Medicare Part D started offering prescription coverage in 2005, there was a cap of $100 deductible, but most plans didn’t require a deductible for a few years. The government caps the maximum annual deductible. What started as $100 is now $545 for 2024, which is up from $505 in 2023.
But unlike a deductible you are familiar with, not all plans charge the deductible to all drugs. Your insurance plan might offer you the cheap medications without a deductible. The parlance for Medicare Part D is Tier 1 and Tier 2 drugs, typically the cheaper, generic drugs. The pricey, brand name drugs start at Tier 3 and go up. These drugs almost always have a deductible that you will pay before coverage begins. Tier 3 drugs are drugs that you see on TV – expensive drugs that take out full-page ads in magazines.
If you go to Medicare.gov to compare drug prices and plans it can be very confusing. While I think it’s great that the government has this comparison tool available, often the information isn’t quite up to date. In order to get the exact prices, you’ll have to cross over to the site of the insurance company.
Once you choose your drug plan for 2024, keep in mind that the drugs covered and the price (tier) of those drugs can be changed by the insurance company with just 30 days’ notice to you. You are locked-in to that drug plan for a calendar year, unless you have a special exception (like moving).
But the drug companies are not locked in to the list of medications and prices that you initially purchased.
On behalf of insurance agents everywhere: this is not the fault of your agent. We agents have no advance knowledge of any changes to your drug plan. Yet, we take the brunt of the complaints.
If your plan does change, you can call 1-800-MEDICARE to file a complaint, but please do not complain against the broker who helped you enroll. We don’t like this system either.
Sylvia Gordon is co-founder of The Medicare Family, headquartered in Noblesville, where she educates thousands on Medicare and Social Security in all 50 states. You can learn more at TheMedicareFamily.com.