Plan Ahead for 2009 Medicare Part D

Over-the-Counter Medications Can Save You Money

Medicare Part D has helped millions of Medicare patients save on their medication costs. However, Part D can be confusing –- especially when it comes to the Coverage Gap (the phase of the plan during which YOU pay 100% of prescription costs). If you join a standard Part D plan in 2009, when your total cost† for prescription medications reaches $2,700, the Coverage Gap begins. Your total cost† includes all prescription medicines, whether they are brand name or generic.

†Total cost = what YOU pay + what Part D pays

There is a way to plan ahead and save money. By considering over-the-counter (OTC) alternatives, like Prilosec OTC, you can avoid or delay the Coverage Gap — OTCs do not count toward your $2,700 initial coverage dollars.

How does Part D coverage work?

Although Part D plans vary, standard coverage basically works in 3 phases*:

Phase 1—Initial Coverage

  • You pay for the first $295 of your prescription medication costs (called your deductible‡)
  • After you have paid your deductible, Part D coverage begins
  • You pay an average copay of about 25% of your prescription costs
  • Your Part D plan pays for about 75% of your prescription costs
  • Your Part D plan keeps a running “tab” of what you pay plus what the plan pays
  • Once this tab reaches $2700 (deductible + copays + Part D payments), all of the initial coverage in Phase 1 has been used

Phase 2—Coverage Gap

  • You pay 100% of your prescription medication costs until you have spent $3,454 in Phase 2 alone

Phase 3—Catastrophic Coverage

  • Your Part D plan pays for 95% of your total prescription costs for the rest of the year

At the end of the year, the 3-phase cycle starts over again.

Planning ahead is the key to saving your Part D coverage dollars

The cost of medications can be tough on your budget, but it’s important to continue taking your medications. Here are 3 ways you can manage costs and make the most of your Part D coverage:

1. Consider OTC medication alternatives

  • OTCs DO NOT use your coverage dollars
  • By using OTCs, you can plan ahead and save your Part D coverage dollars for more costly prescription-only medications

2. Consider generic versions of your prescription medications

  • Generic prescription medications can lower your spending, but they still use your Part D coverage dollars, unlike appropriate OTC alternatives

3. Apply for help if you have limited income

  • Call 1-800-Medicare for Extra Help with Part D
  • Call 1-888-4PPA-NOW or go to www.pparx.org to learn more about patient assistance programs

See how Peggy’s tab was affected by her prescription spending …

  • Peggy’s two copays add up to $65 each month
  • Part D pays for the rest--$205 each month
  • Her total monthly tab: $270 ($65 + $205)
  • At this rate, Peggy will reach her initial coverage limit in 10 months’ time ($270 x 10 = $2700 Phase 1 coverage limit)

Without an OTC substitution, Peggy runs out of Part D coverage in month 10.

  • For the last 2 months of the year, Peggy will have to pay the full cost of both medications: $540 total ($270 x 2)
  • At the end of the year, she will have spent $1190 ($65 x 10 months + $270 x 2 months)

NOW see how Peggy changed her situation.

By planning ahead and talking with her doctor, Peggy found an appropriate OTC alternative for one of her medications …

  • Using a $20 OTC instead of prescription “Medication A” brings Peggy’s total monthly costs to $70, but the OTC doesn’t count toward her Part D tab
  • Peggy spends $5 more each month, but only $200 ($50 + $150) counts toward her tab
  • At this rate, Peggy won’t reach her initial coverage limit this year ($200 x 12 = $2400)

By substituting an OTC, Peggy saves $350.

  • At the end of the year, she has spent $840 vs $1190 that she would have spent without an OTC substitute ($65 x 10 months + $540 for the last 2 months)
  • $1190 vs $840—that’s a savings of $350!

Our Medicare Part D kit includes an educational brochure about planning ahead to delay or avoid the Coverage Gap. It also includes a tracking tool to help you track the spending that counts toward your coverage limit.

Download our Medicare Part D kit.

Request a copy of our Medicare Part D kit.

* If you receive “Extra Help” (from Medicare) with paying your drug costs, you will have low costs throughout the year (no or low deductible, no Coverage Gap, low copays).

‡Some plans have no deductible or a reduced deductible.