How to Save Hundreds of Dollars on Medicare Drug Costs

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Shopping around is one of few ways to knock anywhere from tens to thousands of dollars off your annual insurance costs in one fell swoop.

A new analysis by the Senior Citizens League shows this is even true of Medicare Part D plans, which cover prescription drugs for folks with Medicare health insurance.

The advocacy group found that the price of a particular drug can vary by hundreds or even thousands of dollars from one Medicare Part D plan to another. So, shopping around for the best plan could save you hundreds.

The best time to do that comparison shopping is right now, during the annual Medicare open enrollment period that started Oct. 15 and runs until Dec. 7.

Here are two examples of drug cost variation from the analysis:

  • Sovaldi (1-year supply of 400-milligram tablets), a drug used to treat hepatitis C: It’s cheapest for folks with an Express Scripts
    Medicare Choice Part D plan, who would pay $5,600 in co-insurance. It’s most expensive with an Anthem Blue Medicare Rx Plus Part D plan — $100,800.
  • Januvia (30 100-milligram tablets), a drug for Type 2 diabetes: It’s cheapest with a SilverScript Choice Part D plan, ranging from $38.33 to $113.80. It is most expensive with an AARP Medicare Rx Walgreens plan — $538.74.

The Senior Citizens League’s analysis identifies several reasons for which drug prices can vary so much for Medicare recipients, including the following:

  • A majority of people on Medicare rarely shop around during open enrollment.
  • Each Part D plan has its own formulary, a list of prescription drugs that a plan covers.
  • The federal government, which runs the Medicare program, does not negotiate drug prices on behalf of Medicare recipients. Instead, each private insurance company that offers Medicare drug coverage does its own negotiating.

The analysis concludes:

“Medicare beneficiaries in Part D and Medicare Advantage plans overpay for their prescription medications even though less expensive, high quality plan choices are available.”

How Medicare drug coverage works

There are two main types of Medicare health insurance: Original Medicare, which is offered directly by the federal government, and Medicare Advantage plans, which are offered by private insurers that contract with the federal government’s Medicare program.

Original Medicare does not include prescription drug coverage. Seniors on Original Medicare who want drug coverage must buy a separate Medicare Part D plan from a private insurer.

Medicare Advantage plans generally include drug coverage. Among Medicare Advantage plans for 2020, 90% include drug coverage, as we report in “5 Extra Perks Covered by Many 2020 Medicare Advantage Plans.”

How to shop around for Medicare drug coverage

Shopping around for any type of insurance can seem intimidating, but shopping for Medicare drug coverage need not be overwhelming, says Mary Johnson, a Medicare and Social Security policy analyst for The Senior Citizens League.

The organization offers a checklist for the process, which includes the following steps:

1. Review your current coverage

In particular, review the Annual Notice of Change (ANOC) that you should have received from your Medicare Part D plan or Medicare Advantage plan by now.

This document will include changes to your current plan that take effect in 2020, assuming you stay on that plan. As the league explains the ANOC:

“In addition to changes to the premiums, the notice will explain increases, if any, in the deductible, copayments and coinsurance. The notice will tell you where to find information about the pharmacies in the drug plan’s network, and it will refer to ‘the drug list’ or plan formulary of covered drugs which usually can be found online or requested from the plan.”

2. Take inventory of your prescriptions

Make a list of all prescription medications that you take. For each drug, include the name, dose, quantity taken per day and quantity required per month.

“Keep this list on file where you can find it easily,” the league advises. “Not only will you need it to compare drug plans, it’s handy to take with you on each visit to your doctor.”

3. Consider getting help

Medicare recipients have access to free, one-on-one Medicare insurance counseling from State Health Insurance Assistance Programs (SHIPs), as we detail in “6 Things That Are ‘Free’ With Medicare.”

To find the SHIP for your state, visit the national SHIP website.

4. Narrow down your options

Now that you know what your Medicare Part D plan or your Medicare Advantage plan will cover next year and you have a detailed list of your medications, you can compare that coverage with other drug plans to determine if they would provide you better or cheaper drug coverage.

To compare plans, use the Medicare Plan Finder feature at, the federal government’s official Medicare website.

Narrow your options down a few that seem best, and then contact those plans directly to confirm details such as:

  • Whether all your drugs are covered
  • Estimated co-pays and co-insurance
  • Which pharmacies participate in the plan

If you decide to switch to a new plan for 2020, The Senior Citizens League advises going through the Medicare website rather than the insurer.

“This way Medicare will make sure your previous plan unenrolls you by the end of the year and your new coverage begins on January 1, 2020 with the new plan,” the league explains.

What’s your take on The Senior Citizens League’s analysis of drug cost variations across Medicare drug plans? Sound off by commenting below or over on our Facebook page.

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