Prescription Drug Plans

Protecting Your Health and Budget at the Pharmacy

In today’s world, modern medicine can work miracles, but it often comes with a high price tag. Whether you are taking a few generic maintenance medications to keep your blood pressure in check or you require expensive specialty drugs for a complex condition, pharmacy costs are a major concern for almost every retiree. That is where Medicare Part D comes in. At Snowflake Health Insurance, I view Part D as one of the most complex but essential parts of your coverage. My job is to navigate the confusing tiers and formularies to ensure you can get the medication you need without breaking the bank.

Medicare Part D is the government’s program for prescription drug coverage. Unlike Part A and Part B, which cover medical services, Part D is specifically for the pills and medications you pick up at the pharmacy counter. These plans are sold by private insurance companies approved by Medicare. Even if you don’t take any medications right now, having a Part D plan is effectively insurance for your future health. Just like you buy homeowners insurance hoping you never have a fire, you buy Part D hoping you never need expensive meds—but if you do, you will be incredibly grateful the coverage is there.

One of the most important concepts to understand about Part D is the “formulary.” A formulary is simply the list of drugs that a specific plan covers. Not every plan covers every drug. Insurance companies group these drugs into different levels, called “tiers.” Tier 1 usually includes low-cost generic drugs, while Tier 5 includes expensive specialty drugs. The difference in cost between these tiers can be massive. One plan might categorize your blood thinner as a Tier 3 drug with a high copay, while another plan lists it as Tier 2 with a much lower cost. This is why I don’t just pick a plan based on the premium; I ask you for your list of medications and run a personalized analysis to see which plan covers your specific prescriptions at the lowest total cost.

We also need to talk about the “phases” of Part D coverage, because the cost of your drugs can change throughout the year. First, there is usually an annual deductible you must meet before the plan starts paying. After that, you enter the Initial Coverage phase, where you pay a copay or coinsurance, and the plan pays the rest. If your total drug costs reach a certain limit, you enter the “Coverage Gap,” often famously referred to as the “Donut Hole.” Inside the gap, you pay a higher percentage of the cost of your drugs (usually 25%). Finally, if you have very high drug costs, you reach the Catastrophic Coverage phase, where your costs drop significantly for the rest of the year. Understanding this lifecycle helps you budget and prevents “sticker shock” at the pharmacy counter halfway through the year.

A common mistake I see is people assuming that all pharmacies charge the same price. With Part D, this isn’t the case. Most plans have “preferred pharmacies” and “standard pharmacies.” Going to a preferred pharmacy can save you a significant amount of money on copays. Sometimes, switching from a chain drugstore to a local grocery store pharmacy or using a mail-order service can result in huge savings. Part of my service is identifying which pharmacies are preferred by your plan so you can keep more money in your pocket.

There is also a strict penalty for not having drug coverage. This is the “Late Enrollment Penalty.” If you go 63 days or more without a drug plan (or other creditable coverage like VA benefits or employer insurance) after you turn 65, Medicare will charge you a penalty if you ever decide to sign up in the future. This penalty is calculated based on how many months you went without coverage and is added to your monthly premium forever. It is a permanent fee. I want to help you avoid this. Even if you take no medications, enrolling in a low-cost Part D plan is the smartest way to insure your future insurability and avoid unnecessary fines.

Perhaps the most critical advice I can give regarding Part D is this: you must review your plan every single year. Part D plans change every January. They can change their premiums, their deductibles, and most importantly, their formularies. A drug that is covered this year might be dropped next year, or moved to a more expensive tier. Just because your plan worked for you in 2024 doesn’t mean it will work in 2025. During the Annual Enrollment Period in the fall, I reach out to my clients to review their current medications and check if their plan is still the best option. It is not uncommon for us to switch plans to save hundreds of dollars a year.

Navigating prescription drug coverage requires attention to detail. It’s about more than just the monthly premium; it’s about the total cost of your healthcare. At Snowflake Health Insurance, I take the guesswork out of Part D. I do the research, compare the formularies, and help you find a plan that makes your necessary medications accessible and affordable. Your health relies on these prescriptions, and you can rely on me to help you manage the costs.