You can use discount coupons instead of your prescription drug (Part D) benefits. You can’t use both in the same transaction. However, you may be eligible for certain Medicare-approved programs to help lower your prescription drug costs.
Prescription drug plans like Part D are designed to lower the cost of covered medications without additional assistance. Although PDPs help keep costs low for some enrollees, others experience significant costs.
Private health insurance, on the other hand, may allow you to use your coverage alongside certain discounts to reduce out-of-pocket costs. These discounts can come directly from the manufacturer, a discount drug company with a contract with specific pharmacies, or the pharmacy itself.
While many of these drug discounts are offered cost-free, the U.S. Anti-Kickback Statute made it illegal for companies to exchange anything of value to generate business that would be reimbursable by federal healthcare programs like Medicare and Medicaid.
If you find that your medication is cheaper with a coupon or discount than through your Part D plan, you can tell the pharmacist to charge you out of pocket for the drug.
However, it’s important to note that this out-of-pocket spending will not count toward your Part D plan’s out-of-pocket maximum.
The coverage gap or “donut hole” phase ends on December 31, 2024. As a result, Medicare will no longer offer the Coverage Gap Discount Program (CGDP).
The 2025 benefit structure consists of three phases: a deductible phase, an initial coverage phase, and catastrophic coverage.
Under the standard benefit, you’ll pay a deductible of $590 (up from $545 in 2024).
After you pay your deductible, you enter the initial coverage phase, where you’re responsible for 25% of all eligible drug costs until you reach $2,000 in out-of-pocket spending.
Once you hit this threshold, you qualify for catastrophic coverage, eliminating any further copayments or coinsurance costs for the rest of the year.
What is the Medicare Prescription Payment Plan?
This voluntary program begins on January 1, 2025. You can opt into it at any time.
When you fill a prescription for a drug covered by Part D, you won’t pay the pharmacy directly. Instead, you’ll receive a monthly bill from your health or drug plan.
Keep in mind that while this payment option can help you manage your monthly expenses, it doesn’t reduce your overall drug costs.
You’re still responsible for the full copayment or coinsurance amount; it’s just paid in increments throughout the year instead of in one lump-sum payment.
You may notice that certain medications are cheaper through discount programs than your Part D plan. However, dropping your plan may not be the best idea.
For example, if you need new medication in the future and you don’t have coverage from a drug plan, you may end up paying full price if there are no coupons available.
Plus, most manufacturer coupons eventually run out, leaving you paying hefty prices out of pocket without coverage.
If you drop your Part D plan and later re-enroll, you’ll pay a permanent late enrollment fine in addition to your monthly premium.
Shop different pharmacies
Individual pharmacies decide the retail price of a medication. Research from 2017 suggests that shopping around can help you save money on your medications.
A lower retail price can mean a lower out-of-pocket cost after Medicare covers its portion. Take note if you have multiple medications, though.
Research from 2022 looked at discounted drug prices across different pharmacies within a single postal code. It found that no single pharmacy consistently offered the lowest prices for prescriptions.
That means while you may get the lowest price for one of your prescriptions at a specific pharmacy, you may pay more for another.
Apply for Extra Help
Extra Help, or the Part D Low Income Subsidy (LIS), can help with your monthly premiums, annual deductibles, and prescription copays. The Extra Help program is worth about $5,900 annually.
You must meet certain income and resource requirements to be eligible. Learn more and apply online at the Social Security website.
Apply for a patient assistance program (PAP)
Some drug manufacturers, non-profit organizations, and individual states offer PAPs to help reduce out-of-pocket costs for prescription drugs. You can use Medicare’s search tool to find PAPs in your state.
With the enactment of the Anti-Kickback Statute, it became illegal to use discount drug coupons in conjunction with Medicare prescription drug plans.
If a prescription drug is cheaper through a discount drug program, it’s completely legal to use the more affordable option instead of your Medicare plan.
