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How to Save More Money with the Medicare Prescription Drug Plan

Study recommends selecting prescription drugs by “evidence, not advertising"

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As confusing as the new Medicare prescription drug plan is, seniors can still save thousands of dollars in out-of-pocket costs by consulting with their doctors about switching to effective low-cost prescription drugs before they sign up with a Medicare prescription drug plan provider, according to a news release from Consumers Union (CU), the publisher of Consumer Reports.

Study shows seniors save more on recommended “low cost” prescription drugs
The CU study analyzed the prescription drug costs for seniors who were taking five commonly prescribed drugs to treat high cholesterol, high blood pressure, heart disease, arthritis pain and depression.

According to the study, seniors could save "between $2,300 and $5,300 a year under various Medicare Part D insurance plans by switching to safe, effective and low-cost” prescription drugs identified as Best Buy Drugs from Consumer Reports.

CU also said that “by lowering their drug costs while joining Medicare Part D, seniors also can avoid falling into the 'doughnut hole’ – the coverage gap that begins with most plans once seniors’ total drug costs reach $2,250”. CU said that switching to Best Buy prescription drugs in all five categories will help seniors “avoid the doughnut hole altogether."

Medicare Prescription Drug Plans can be confusing
“Seniors are justifiably confused about the Medicare drug insurance plans because there are so many types of coverage on the market,” said Gail Shearer, director of the Consumer Reports Best Buy Drugs project, in a news release.

“By switching to low-cost, effective medicines before signing up for the insurance, seniors can have some peace of mind that they’ll have lower out-of-pocket costs no matter what plan they choose.”

How the CU prescription drug cost study was conducted
The study used the Medicare Prescription Drug Plan Finder to choose plans in three metropolitan areas – Sacramento, Atlanta, and Minneapolis – and compared the costs of a Best Buy prescription drug and a commonly prescribed drug in each of the five categories. Here’s what the study revealed:

  • A California senior enrolled in the lowest-cost Medicare insurance plan would save $2,555 a year by switching to Best Buy prescription drugs
  • Saving for an average-cost plan would increase to $3,781
  • Savings for the highest-cost plan would increase to $5,278
  • Similar savings were found in Georgia and Minnesota
  • For seniors taking one prescription drug, savings could range from $279 to $2,597 a year

How to maximize your prescription drug savings
To save the most money, work with your doctor and do your homework on available prescription drugs and Medicare Prescription Drug Plans in your area.

“Having (Medicare prescription drug plan) coverage underscores the need for seniors to talk to their doctors and pharmacists about switching to cost-effective drugs,” Shearer said in the release. “If seniors start out with the lowest-cost drugs, Medicare drug plans will be able to save them much more.”

Shearer also made a case for choosing prescription drugs by effectiveness and cost rather than advertising.

“By providing unbiased information about which drugs are most effective and safe, we can counter the wasteful spending on drug advertising and give meaningful financial relief to consumers and taxpayers,” she said.

Read the full CU prescription drug report: Helping Medicare Beneficiaries Lower Their Out-of-Pocket Costs under the New Prescription Drug Benefit.

Note: Enrollment for the new Medicare Prescription Drug Plan is now in process. If you are looking for comprehensive information on how the plan works, how to determine if it's right for you, where to purchase the new coverage, how to enroll, and where to find answers to your questions, see How to Understand and Enroll in the New Medicare Prescription Drug Plan.

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