How to save on prescription drugs in Medicare

generic Healthcare health care costs bill Obamacare Medicaid Medicare Prescription Medical Expense
istockphoto

(MoneyWatch) Want to save potentially hundreds or even thousands of dollars by spending an afternoon or two of your time? You can do that by taking a critical look at your prescription drug plan under Medicare.

When you're covered by Medicare, one of your goals should be to manage your total out-of-pocket costs for prescription drugs (For more background see my post yesterday on managing drug costs under the program.) And when you're choosing a prescription drug plan, don't make the mistake of only looking at your monthly premium costs -- it's possible that a plan with a higher premium may have lower deductibles and copayments for drugs than a plan with a lower premium. In fact, some Medicare Advantage plans cover prescription drugs with no extra premium above the usual Part B premium for coverage of outpatient services, but such a plan might have substantial copayments.

Look at your prescription drug usage and see how it matches up to the features of your drug plan. Did you fall into the "donut hole" coverage gap this year, and would you expect to fall in it again next year? In this case, it might be worthwhile to pay a higher premium for a prescription drug plan that's more generous than the standard plan.

Every fall your prescription drug provider should send you a notification of changes to your plan. Don't throw it away; instead, look it over carefully. In an effort to manage costs, your provider might have changed the tier classification of the drugs that you take -- which could increase your costs -- or it could have raised the cost of your deductibles and copayments.

During the open enrollment period, you should gather up all the prescription drugs you take and see which tiers they fall into under your current drug plan. Your goal is to find a plan that covers the specific prescription drugs that you take and for the lowest cost. Your old plan may still be best, or you may need to review other plans to see if something might work better for you.

Medicare's plan finder website allows you to compare total out-of-pocket expenses for various prescription drug plans. You can enter the specific drugs you take and see how various plans compare regarding deductibles and copayments. This can help you save money, so don't neglect doing this. (It's worth noting that Medicare's plan finder website may not be up-to-date given the partial government shutdown.)

Another way to manage your costs for prescription drugs is ask your doctor or pharmacist for help. If you find you're using a drug in a high tier classification, ask your doctor if there is another, similar drug you could take that might fall into a lower classification. It's possible that your doctor doesn't know the tier classification your drugs fall into and might be able to prescribe lower cost alternatives. Similarly, ask your pharmacist if there is a generic drug instead of a brand name drug that might meet your needs at a lower cost.

You can also explore lifestyle remedies with your doctor that might reduce your need for prescription drugs. Good nutrition and exercise can alleviate many of the medical conditions that require people to use prescription drugs, such as diabetes, high cholesterol and high blood pressure. A great side effect of these lifestyle choices that can help you lower your medical costs in the long run is that you'll look and feel better.

It may seem like a lot of effort to learn about the features of the various prescription drug plans in order to choose the one that works best for you. But it will be time well spent because it can save you thousands of dollars and minimize headaches if you use a lot of prescription drugs.

  • Steve Vernon On Twitter»

    View all articles by Steve Vernon on CBS MoneyWatch»
    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.