Every year during this time, we help Medicare Beneficiaries review their Part D Drug Plans to ensure they have the most cost-effective Part D coverage for the following year.
We save about $2 Million per year for our clients by just finding the most cost-effective Part D Drug Plans. You can read more about our Part D review process here.
In reviewing thousands of client's drug lists each year, we also uncover some of the seemingly unscrupulous Pricing Strategies of Pharmaceutical companies.
A few years ago, we wrote an article about a specific dosage of Metformin (1000mg XR) which costs 1,000 times more than if you just take two pills of the 500mg XR. That's right, the retail cost was about $7,000 per month versus about $7/month for the 500mg of the same exact medication.
This year, I would like to highlight another very common issue we see with Pharmaceutical pricing: Drug Manufacturers taking two less expensive pills, blending them into one pill and charging a huge markup on the price of the medication.
The example I saw today was for "Pioglitazone/Metformin 15mg/850mg". I was reviewing a Part D analysis for one of our clients and noticed that the only Part D Plans that covered this medication were the higher premium Part D Plans (about $75/month vs about $10-$15/month that most people pay for Part D Premiums). With some further digging on GoodRx.com, I found that the retail cost for this blended medication is about $260/month.
This got me thinking... how much would it cost to take the Pioglitazone and Metformin separately. It turns out the retail cost for Metformin is about $16/month and Pioglitazone is about $150/month. So, if we simply add up the cost of these two pills, one might think it should cost about $166/month retail cost for the combined medication. Or perhaps, a slight markup for the convenience of taking one pill instead of two pills.
But no... there is a 57% markup to get the combined pill of Pioglitazone/Metformin 15mg/850mg which has a retail cost of ~$260/month.
Let that sink in.
What other industry can we add such little value (take 1 pill instead of 2 pills) and justify a 57% price markup? This is one of the key reasons the Diabetic Medicine industry is approaching $100 Billion per year.
So, when I hear about Pharmaceutical companies justifying their pricing strategies to account for R&D expenses to "innovate" and create new life-saving treatments, it makes me question if these types of R&D discussions include innovations like blending two pills into one.
CMS just announced the updated Part B premiums for 2021.
This is good news as it is a relatively low increase (less than 3%) for both the Part B Premium and Part B Deductible.
The Income Related Monthly Adjustment Amounts (IRMAAs) were also updated for 2021. You can find the tables below for individuals with income greater than $88,000 (or joint filers with income less than $176,000). This income is based on your MAGI (Modified Adjusted Gross Income) from your 2019 Tax Return.
If you are in one of the higher income brackets for the Part B IRMAAs, there is an additional IRMAA for the Part D Drug Coverage. The updated table for 2021 can be found below.
Over the last few weeks we have been very busy with the Annual Part D Drug Plan reviews. We have received overall 1,000 requests for reviews and a majority have already been processed all within our target turnaround timeframes.
For the 2021 Part D recommendations we have completed thus far, the projected 2021 Part D savings is more than $1,000,000!
Top 6 Plans so far for 2021
We run the analysis to identify the most-cost effective Part D Plan using the Medicare Plan Finder. You can watch a quick video using this link, if you are interested in how we identify the most cost-effective plan.
There are about 30 Part D plans to choose from in each state. From our reviews, the top 6 plans thus far (table above) make up about 80% of the recommendations thus far.
Open Issue with Cigna & Express Scripts - will be resolved on Monday, Oct 26, 2020
For those of you that currently have a Cigna or Express Scripts Part D Plan, there is an issue with the data file that these carriers provided to CMS on October 15. This data issue is preventing us from reviewing your Part D Plans until the data issue is resolved. We are in close contact with CMS, and we are told this data issue should be resolved on October 26. If this is fixed correctly, we will be able to get to your Review & Recommendations by the first week of November.
If you haven't already sent in your 2021 Part D Review request, you can click this link to submit your 2021 information for a 2021 Part D Review. Our deadline to receive the information is November 15 to provide enough time to complete the reviews, recommendations, and enrollments by the government deadline of December 7.
We have been working with Medicare Beneficiaries for over 10 years and helped 25,000+ Medicare Beneficiaries across the country with their Medicare Planning Needs and Questions.
We wanted to gather some of the most common questions we have heard and provide some answers so we can help even more people. You can find our new FAQ Page by clicking this link.
The information is broken down into categories of questions that we hear frequently.
We hope you find the information helpful.
This is a relatively new plan that provides up to $5,000 per year in Maximum Benefit ($72/month in premium). This is significantly higher than most other plans which are capped at $1,500 or $2,000 per year in benefit. Here is a link to the brochure and highlights are below.
Click here to get more info and Enroll.
Each year, there are changes to the Part D Prescription Drug Coverage of Medicare. We won't have visibility to the actual Part D Plans until October 1, but there are some structural changes that occur each year with Part D. Key updates for 2021 are below.
The government sets a maximum deductible amount for the Part D Plans. In 2020, the maximum deductible was $435. In 2021, this is increasing $10 to $445. On most of the Part D Plans, the deductible only applies to higher tiered drugs (e.g. Tiers 3, 4, 5). Also, some Part D Plans have a $0 deductible, or other amounts lower than the maximum deductible.
Initial Coverage Level
The Initial Coverage Level will increase $110 from $4,020 in 2020 to $4,130 in 2021. This amount is based on the Retail Cost of the Medication for the year (Calendar Year). Most people (about 85%) do not exceed the Initial Coverage Level and thus continue to pay their Copay/Coinsurance amount for the entire year. However, for the people that have very expensive medications that exceed the Initial Coverage Level, they will reach the Part D Coverage Gap, aka Donut Hole where they have to pay 25% the cost of their medications. The minor increase of $110 to the Initial Coverage level will have a minimal impact on Drug Costs in 2021. Basically, for those 15% of people with expensive medications, there will be a very slight delay to reaching the Part D Donut Hole which could save someone ~$20-$40 for the year.
True Out of Pocket Limit (Tro-oP)
The True Out of Pocket limit will increase $200 from $6,350 in 2020 to $6,550 in 2021. The Tro-Op is used to determine when someone exits the Part D Coverage Gap, aka Donut Hole, and moves into Catastrophic Coverage where they only have to pay 5% the cost of their medications. The increase of $200 in the Tro-oP only effects about 5% of people (those that would reach Catastrophic Coverage), and it creates a slight delay for when they will reach Catastrophic coverage. The net impact to this individual is likely less than $50 cost increase for the year.
Click the video below for a more detailed explanation of these changes, including a detailed example for someone who reaches the Part D Donut Hole.
As part of the eMedicare initiatives, CMS recently launched a new Care-Compare tool.
This tool allows you to search for Medicare-Participating Providers: Doctors, Specialists, Hospitals, Nursing Homes, Home Health Services, and more.
The interface is pretty slick and aligns with the mobile-optimized launch of the Medicare Plan Finder tool in 2019.
You can search by Keywords (e.g. Cardiovascular, Knee Injury, etc.) and identify providers in your area that participate with Medicare.
There is a nice Map feature so you can see where each of the Providers are located.
You can select up to 3 providers to "Compare".
The Compare allows the user to see:
Important NOTE: This tool is only for Original Medicare providers. If you have a Medicare Advantage Plan, the Provider Lookup Tools on the Carrier Website for your Medicare Advantage Plan would have to be used to find Participating Providers.
Overall, I think the new Care Compare tool is a good tool for searching for Medicare Participating Providers in a particular area for a specific need. I look forward to additional data elements being added to the Comparison charts (e.g. Reviews, Ratings, etc.), and updates to include Medicare Advantage Plan Providers in the future.
There was a good article published yesterday on CNBC based on a survey of Medicare Beneficiaries main concerns.
At Senior Advisors, we help Medicare Beneficiaries with their Medicare Planning and choosing the right coverage. The large majority of our clients (about 90%) end up enrolling in a Medicare Supplement rather than Medicare Advantage Plans.
As per the survey in the article, most of our clients want the best Medical Coverage with the least out of Pocket expenses which is why Medicare Supplements work great for our clients.
Give us a call now if you would like help with your Medicare Planning, or a review of your current Medicare Plans.
Moorestown Office - 856-866-8900
Cranford Office - 908-272-1970
We have some exciting news for Medicare Beneficiaries enrolling after age 65 (e.g. coming off of a Group Health Insurance Plan).
In the past, these Beneficiaries had to complete paper/pdf forms and send them (or drop them off) to the Social Security office. About a month ago, Social Security started providing a fax number that would allow individuals to fax these forms in since the Social Security offices have been closed due to COVID.
Just this week, there is a new enhancement deployed by Social Security that will finally allow these individuals enrolling after age 65 to complete their forms online using an electronic signature.
Below is a snippet from an email that we received from an inside source at SSA/CMS.
Effective Tuesday, May 26, 2020, based on the collaborative efforts between the Centers for Medicare & Medicaid Services (CMS) and SSA, the new online process for handling Medicare Part B SEP enrollment will be available online. The online process provides beneficiaries the option to complete the Medicare enrollment forms under an SEP for SSA to process. The online Medicare Part B SEP enrollment link www.ssa.gov/Medicare-PartB-SEP will be available on both SSA and CMS websites effective Tuesday, May 26, 2020. Once the beneficiary completes the online enrollment forms, the forms will automatically transmitted to the SSA Field Office of jurisdiction.
As a requirement, regardless of the service channel, in order to enroll for Medicare Part B during an SEP, the following are required:
· The individual must be covered under a group health plan (GHP) based on his or her own or a spouse’s current employment status, or covered under a large group health plan (LGHP), and the coverage must be based on his or her own, or a family member’s current employment status.
· The individual can enroll:
- during any month (including a partial month) in which they are enrolled in a GHP or an LGHP based on current employment status, or
- in any of the 8 consecutive months following the last month, during any part of which, the individual was enrolled in the GHP based on current employment status,
- or beneficiaries are eligible for equitable relief if:
o The beneficiary had an SEP during the period from March 17, 2020, through June 17, 2020; and
o The beneficiary did not apply for Part B during that SEP.
o Eligible beneficiaries who wish to take advantage of the equitable relief must file their enrollment request by June 17, 2020.
· The beneficiary must complete the CMS-40B enrollment form, paper or online to request enrollment. In addition, he or she must complete the CMS-L564 form, paper or online.
· The Form CMS-L564 has two sections:
- Section A - the applicant completes Section A.
- Section B - the employer, the GHP or LGHP completes Section B of the form. The information in Section B provides evidence of GHP or LGHP coverage and dates of employment.
NOTE: If the employer cannot sign the CMS-L564, the beneficiary can provide other evidence of previous employment or coverage of GHP or LGHP, or other documents for evidence of employment. Refer to HI 00805.295 – Evidence of GHP or LGHP Coverage Based on Current Employment Status.
Online Enrollment Guidelines
· The online enrollment process will require beneficiaries to complete the CMS-40B, CMS-L564 (one combined online application), and submit any required evidence during one online session.
NOTE: The online enrollment process does not offer beneficiaries the option to save and revisit the application.
· Failure to complete and submit the correct documentation may result in a delay in processing the Medicare enrollment.
· If the beneficiary fails to complete the forms or submit the correct evidence, Field Offices should follow normal business process and develop for the missing information.
During the COVID-19 pandemic, CMS waived the wet signature requirement; however, the online option will require beneficiaries to provide an eSignature (digital signature) and a valid email address.
As of March 17, 2020 the Social Security offices have been closed due to COVID-19. This presents some challenges for Medicare Beneficiaries signing up for Medicare after age 65.
Prior to COVID, we always recommended that post-65 Medicare Beneficiaries take the completed Part B enrollment forms (CMS-40B and CMS L564) to the Social Security office to sign up for Medicare Part B. After the Social Security offices closed, we were told to have Beneficiaries mail the CMS forms to the local Security Security office to sign-up for Part B which presents other challenges with lost mail, timing delays with postal mail, and risks of going to the Post Office to mail certified mail.
New Submission Method - FAX
We are excited to announce that Medicare beneficiaries can now fax Medicare Part B form, CMS-40B and CMS L564- Request for Employment Information, along with proof of employment, Group Health Plan (GHP), or Large Group Health Plan (LGHP) to
Social Security also temporarily removed the requirement that the Employer has to sign the CMS L564 form. As long as you provide proof of employment (e.g paystub) and proof of Group Health Plan, the Employer signature is not required on the CMS L564 form.
You can read more info here: https://www.ssa.gov/thirdparty/whatsnew.html?utm_campaign=thirdparty&utm_medium=email&utm_source=govdelivery
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