Tag: Coinsurance

Medicare drug benefit leaves many with high out-of-pocket costs
The Kaiser Family Foundation just released a report documenting the high out-of-pocket costs for many people with the Medicare Part D drug benefit. Without an out-of-pocket cap, the Medicare drug benefit leaves people with costly prescription drug needs choosing between paying thousands of dollars for their medicines or foregoing treatment.

In 2017, before Part D drug coverage kicks in, people pay a $400 deductible. After they meet their deductible, they must pay 25 percent coinsurance, up to a coverage limit of $3,700 in total drug costs. They then fall into a coverage gap (donut hole) where they must pay a bigger portion of their drug costs until these costs total $4,950, the catastrophic coverage limit. After they reach the catastrophic coverage limit, if they still need drugs, they are responsible for 5 percent of their drug costs. People with low incomes may receive subsidies that help cover the Part D premiums and cost sharing, bringing down their out-of-pocket costs.

More than 3 million people had drug costs above the catastrophic coverage limit. Of those, one million did not qualify for subsidies. All in, with the Part D drug benefit, these people spent an average of more than $3,000 out of pocket on their medications.

The Kaiser report reveals that about half the people enrolled in Medicare Part D spent over $2,924 on their medicines in 2015. About one in ten spent $5,200 or more out of pocket for their prescription drugs. People with HIV/AIDS, multiple sclerosis, viral hepatitis, leukemia/lymphoma, and schizophrenia incurred the highest out-of-pocket drug costs.

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

Here’s more from Just Care:
November 15, 2017
Medicare Part D drug costs rising
The private Medicare plan bait and switch continues. It wasn’t that long ago that copays in private plans were reasonable, affordable even, without Medicare supplemental insurance to pick up the cost. This year, Medicare Part D drug plans have moved from fixed copays to coinsurance, a percentage of the cost, for the majority of drugs they cover. Consequently, out-of-pocket prescription drug costs are projected to rise again for people with Medicare.

The advantage of traditional Medicare, beyond the wide choice of doctors and hospitals it offers anywhere in the country and easy access to care, has always been that it allows people to budget for their health care. With supplemental insurance, there are few if any out-of-pocket costs. And, while supplemental coverage can be costly, knowing health care costs for the year gives people peace of mind.

But, until Congress allows CMS to negotiate drug prices instead of permitting drug companies to charge astronomical prices, drug costs will continue to escalate for everyone. For now, Congress has chosen to penalize the public and reward the drug industry since insurers have limited if any ability to rein in drug prices. To keep premiums down, they simply shift more costs to their members.

The share of Medicare Part D drugs with coinsurance payments has been growing steadily in the last few years. According to Avalere Health, 58 percent of covered drugs in Part D plans now have a coinsurance payment. In 2014, about one in three drugs in Part D plans (35 percent) had coinsurance payments. Last year it was 45 percent.

The Medicare Advantage plans are also shifting increasingly to coinsurance payments for certain drugs. This year 26 percent of their drugs have coinsurance payments. You can expect that to increase.

Here’s more from Just Care on prescription drugs:
April 12, 2016
Can you budget for your health care?

If you have commercial health insurance, be it a Medicare Advantage plan, a state health exchange plan or an employer plan, and you are struggling to budget for your health care, you’re not alone. Your out-of-pocket costs tend to be hopelessly complex, confusing and never-ending. To keep monthly premiums down, health plans often charge a series of out-of-pocket costs each time you use services.

What’s clear is that people who need more costly services tend to pay a lot more for their care. Unlike traditional Medicare, which spreads costs among everyone who has it, commercial health plans shift costs to people with complex conditions. In the process, they make it near impossible for you to budget for your health care. (Click here to read about why you can’t trust the health plan’s provider directory and what to do about it.) And, click here for a primer on the fundamental difference between traditional Medicare and commercial insurance.

In many health plans, you will pay a deductible, a copay and possibly also coinsurance for at least some services you receive. And, the amount of the coinsurance is not likely to be clear. Calculating total costs can be a bear. Here’s a mini-quiz: On a procedure that costs $1000, where you have a $250 deductible, a $50 copay and 20 percent coinsurance, what would you owe out-of-pocket?

What did you come up with? The answer actually depends on whether the $1000 is the doctor’s charge or the health plan’s negotiated rate, which is often lower than the charge, and whether you have already paid any of the annual deductible. But, assuming the health plan’s rate is $1000 and you have not yet paid any of the deductible, you would owe $440 in out-of-pocket costs: $250 deductible, plus $50 copay, plus $140 (20 percent of the remaining cost of $700).

The best way to budget for your care is to use in-network doctors and hospitals and choose a plan with a low out-of-pocket cap. To find a plan with a lower out-of-pocket limit, you need to understand how the plan calculates its cap. For example, if you see out-of-network providers will those costs go towards the cap? Is there a separate deductible for prescription drugs? Do your prescription drug costs apply to your out-of-pocket cap? How about your coinsurance? Each health plan is free to establish its own formula for calculating these costs.

Unfortunately, we need to address the excessive costs people must pay when they need a lot of care. No matter which plan you choose, the out-of-pocket cap is going to be many thousands of dollars. Medicare allows people to budget for their care with supplemental coverage; so should commercial insurance.

Here are four things to know if your income is low and you have Medicare. And, here are six tips for keeping your drug costs down if you have Medicare. And, here’s why you should plan ahead to keep your emergency care costs down.

January 13, 2016