Recent advances in the pharmaceutical industry have brought major innovations to the treatment of diseases like cancer, rheumatoid arthritis, and hepatitis B. New medications can offer hope and better quality of life to patients struggling with life threatening or chronic conditions, but these drugs come at a high cost and can be a burden even for people with coverage through a Medicare Advantage or stand-alone Prescription Drug Plan.
Here are some important considerations for clients who may need these new and advanced drugs.
CMS allows plans to include a specialty tier in their formulary – Plans are allowed to place any drugs with a monthly cost over $600 on a specialty tier. This tier is not restricted to the usual 25% maximum cost sharing, so a member may be expected to pay up to 33% of the cost for drugs in this tier.
Only a small number of drugs are in most plan’s specialty tires – On average, less than 10% of the drugs in the CMS reference formulary are included in a plan’s specialty tier. Just because a drug is new does not necessarily mean it won’t be covered at a lower tier. The specialty designation is generally reserved for the most expensive drugs used by the smallest group of people.
Part B vs Part D covered drugs – Some drugs can be covered under either Part B or Part D, depending on how and where they’re administered and how they’re prescribed. As a general rule, drugs administered in a doctor’s office or other outpatient facility are covered under Part B, while drugs administered by the patient at home are covered by Part D. However, there are exceptions that can have a significant impact on what a patient pays for the same treatment. For example, oral chemotherapy drugs used in place of traditional infusion chemotherapy are covered by Part B, even if the patient takes them on their own at home. Other oral cancer drugs that could not alternatively be given via IV or injection in a doctor’s office are covered only under Part D. For a client with most Medicare Supplements, this can mean the difference between having no out of pocket cost once Original Medicare pays their 80% and their Medicare Supplement covers the remaining 20%, and paying up to 33% of the thousands of dollars that the drug could cost under Part D. In contrast, a patient with only Original Medicare and a Part D plan may save money with the Part D covered drug over the full course of their treatment, because Original Medicare does not have the out-of-pocket maximum that their Part D plan does.
The coverage gap – For clients taking Part D specialty drugs, they will likely quickly become familiar with the coverage gap. Once they have exhausted their initial coverage, it’s important that they continue to show their Part D membership card when filling prescriptions, even if they’re paying out-of-pocket. This will allow them to access the manufacturer discount offered while in the gap and will help make sure that their out-of-pocket cost is tracked correctly to get them into catastrophic coverage as quickly as possible.
There are programs to help cover the cost – Clients who even might be eligible for the Low Income Subsidy (LIS), also called Extra Help, should apply. Especially for those taking specialty drugs, the subsidy can save someonethousands of dollars a year. For people whose income is too high to qualify for LIS, there are manufacturer patient assistance programs from many drug companies. These programs can offer significant discounts, even completely covering the cost of a drug. Typically clients can apply on the manufacturer’s website and will be sent a card to use at the pharmacy to access the discount. If clients are not able to get LIS or help from their drug’s manufacturer, there are various charity programs designed to help people with high medical costs.
Clinical trials have their own rules for Medicare Advantage plans – Members wishing to enter a clinical trial for a new treatment for their disease can do so while remaining in their Medicare Advantage plan and paying fee-for-service costs for clinical trial care. Their Medicare Advantage plan is required to continue to cover necessary treatment for their condition even while in the trial. Any cost sharing paid by a member for a clinical trial also must be counted towards their in-network out-of-pocket maximum by their Medicare Advantage plan.
Dealing with a life threatening or chronic illness is difficult enough. Be prepared to arm your clients with this information to help make their treatment a little bit easier.