Cutting Costs in Retirement

Selecting the right Medicare Part D prescription drug plan (PDP) can save you money.

Updated on: June 28, 2019

Originally posted on: August 19, 2014
Former Vice President of Medicare Solutions Ms. Rabbitt specializes in helping seniors better understand the complexities of Medicare coverage. Topics include transitioning to Medicare and the appeals process.

Selecting the right Medicare Part D prescription drug plan (PDP) can save you money. The choices you make once you’ve enrolled in a plan can also lower your costs. There are simple shortcuts you can take that will help you save on your pharmacy costs in retirement.

Know the Basics About Generics

Most of us are familiar with generic drugs. You may be aware that they can cost less than brand-name drugs and lower your overall prescription drug costs. But there’s more than one type of generic drug to consider.

  • “Generic equivalents” have the same active ingredients as the brand-name counterpart.
  • “Generic alternatives” have different active ingredients than the brand-name drug, but may provide similar health benefits.

If you’re taking a brand-name drug, talk to your doctor about whether a generic drug might be right for you.

Achieve Greater Savings in the Coverage Gap

Now there are even greater savings for Medicare Part D beneficiaries using generics. If you reach the Coverage Gap in 2019, you will be responsible for 37% of the cost of a covered generic drug, down from 44% in 2018. While you will pay 25% of the cost of a covered brand-name drug in 2019, don’t be fooled by the difference in percentage. You will generally find a generic drug more affordable than a brand drug.

The news is even better for 2020 and beyond. With the closing of the Coverage Gap for generic drugs in 2020, you will pay 25% of the cost of these drugs if you reach this stage.

Optimize the Dose to Help Save

Some drugs come in varying strengths, and it’s often possible to get the same results by taking fewer pills at a higher dosage. This practice, known as “dose optimization,” could lower your costs. Fewer pills at a higher strength may cost you less than more pills at a lower dose.

If you’re taking medication more than once a day, speak to your doctor or pharmacist to see if you can optimize your dose. This may help lower the cost of your medication.

Select a Pharmacy with Savings

Consider getting the medications you take on a long-term basis through the mail. You can often get up to a 3-month supply for less than you’d pay at a retail pharmacy for three 1-month supplies. By switching to generics and ordering medication through a home delivery program, you may save even more.

Some plans have a network of preferred pharmacies within their broad pharmacy network that charge a lower cost or “preferred” amount. To get the lowest price, you will need to use network pharmacies that offer “preferred pricing.”

When considering a plan, check to see if your current retail pharmacy is in the plan’s broad network. If it’s not, consider using another pharmacy that is included. To maximize your savings, also check if the pharmacy is in the preferred pharmacy network. If it is, use it and enjoy the savings.

Shop for Savings

There are many plan-sponsored online tools and programs that you can use to compare savings. You should be able to see how much you could save by changing your dose, brand, and delivery method. In each of these cases, you’ll find that you won’t have to reduce the quality of your treatment to lower your costs. Take the time to research your plan’s savings options. You will find that there are plenty of ways to save on your prescription drugs.

Take as Directed

Medication adherence means taking your medication as prescribed — at the right time, at the right dose and for as long as your doctor recommends. Being adherent will not only keep you safe, but can save you money by avoiding unnecessary healthcare costs.