Medicare Your Coverage Options

Out-of-pocket costs for Part D generics way up

Written by Diane Archer

Michael Hiltzik writes for the LA Times that people with Medicare are paying more for generic drugs even though generic drug prices overall have barely increased. According to Avalere, a healthcare consulting firm, older adults and people with disabilities are paying almost twice as much out-of-pocket for generic drugs through Medicare Part D today as they did seven years ago. How can this be?

The reason for high out-of-pocket costs for generics is that CMS allows Part D plans to decide the copays (the part of the cost individuals pay) for their drugs. And, the Part D plans want them to be as high as possible. If they impose higher copays, Part D plans can keep their monthly premiums from going up as much, allowing them to attract more enrollees. By so doing, they penalize their enrollees who need these drugs, driving up their costs and jeopardizing their access to needed medicines.

As a result of copay increases in Medicare Part D plans, people with Medicare paid $6.2 billion more in 2015 than they did four years before, a 93 percent increase. Copays increased on important cost-effective cholesterol drugs, hypertension drugs and diabetes drugs, all of which are prescribed widely. Generic drug prices increased just 1 percent in that period.

Part D plans have moved most generic drugs out of the tier 1, lowest copay category, and into the tier 2 category. More than 70 percent of generic drugs were in the tier 1 copay category in 2011. By 2015, only 19 percent were in the tier 1 category. And almost all Part D plans changed their tier structure from four to five tiers. These copay increases are a way of rationing care based on ability to pay; they keep people who need these drugs from taking them, endangering their health.

If you want Congress to rein in drug prices, please sign this petition.

Here’s more from Just Care:



  • Unlike traditional medicare parts A and B that are government programs medicare drug plans (part D) are run by private insurance companies. The vast majority are for profit companies and even not for profit companies have to at least break even and are in competition with their for profit brethren. In order to be competitive in attracting subscribers they try to keep their premiums low. So the up front cost to the consumer has to be made up for on the out of pocket costs down the road.

    It is important when shopping for part D plans to have a list of prescriptions so you can compare not only monthly premiums but over all costs for competing plans. Consumers should reevaluate plans and shop each year during open enrollment season.

  • I cancelled my Part D coverage this past January 1st. With Unitedhealthcare (what an oxymoron!), between monthly premiums, copays, annual deductible, etc., I had to spend $957 before they would pay one penny towards my meds!!!, 2 of which are very low-cost generics. And one of my three is not on their formulary. I shopped around and found that the best prices were at Costco’s pharmacy. You do not need to be a member of Costco in order to use their pharmacy. My annual cost for 3 meds is approximately $202, versus more than $957 with insurance.

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