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Medicare Part D now limits the patient’s out of pocket costs to $2,100 a year (2026) adjusted each year.
There are conditions. Your Plan D is responsible for tracking your spending.
Every time you fill a covered prescription:
However, if a drug is not covered by your plan, it usually does NOT count toward the cap. You could appeal for an exception.
A Non-formulary drug (not on your plan’s list) does not count. If you pay cash, it does not count toward the cap. If you use a discount card like GoodRx to save money, it does not count.
Recently one of my wife’s doctors gave her samples of a drug. It worked quickly and effectively. When we got the prescription we found it was not covered by her Part D plan. It would be out of pocket at $500 a month using GoodRx. And of course, I now know it won’t count toward the $2100 out of pocket maximum. So with a Plan D and a $2100 annual cap, we still face a bill of $6,000 a year.
What a system we have. Part D plans are not uniform in the drugs they cover and we are expected to select a plan not knowing what future prescriptions may or may not be covered. The lack of uniformity and abundance of unnecessary choice is ludicrous. Every developed country except the US has figured this out.
Here is the kicker. I asked my AI friends to check. Turns out the drug is covered by many Medicare Part D and Medicare Advantage plans, but coverage is not universal.
Health care via roll of the dice.
(You can put the last two paragraphs down as a rant🤑)
My wife uses some expensive medications so that limits some Part D plans that I can use. I discovered Cost Plus Drugs which is Mark Cuban’s invention. So, when we have to renew Part D, I spreadsheet all her meds and figure out which plan in conjunction with Cost Plus provides the lowest cost. I have moved her plan every year for the last 4 years and saved several thousand dollars by doing so. Not everyone has an interest in doing this much work to save money. It is shameful what senior citizens have to go through.
Maybe AI could help with this.
Thanks for you post and discussion. My doctor says the system is broken, but not sure what that means, he is young about 30 years old. Check this out and if possible, someone please explain. For the common drug Augmentin called Amoxicillin 875-125 mg Twice Daily Morn/Night 30 days, price with insurance at Walgreens, $80.00, price at BJC Hospital Pharmacy, $20.00. Why such a difference, exact same drug and exact same insurance, Part D, with Wellcare. That difference seems totally out of line. Mr Quinn, do you have any insight on something like this?
Make sure you are comparing the same drugs. Augmentin is amoxicillin/clavunanate while Amoxil is amoxicillin. It’s not the same thing. Plus there is no good reason to get the brand name of either of those drugs.
Augmentin also contains clavulanate. Make sure you’re not comparing to simple amoxicillin.
The generic equivalent of amoxicillin also includes clavulanate. Costco has the generic combination for $20.
I looked the generic version of that drug up on GoodRx. In my area prices range from $6.87 at Sam’s Club to $32 at CVS. I currently get my prescriptions filled at Harris Teeter, where it’s $13.79. In other words, drug prices in the US are irrational. Welcome to laissez-faire capitalism.
I just checked, and a prescription drug in the UK costs 9.90 GBP. Period. ($13.47 at the current exchange rate.) Or you can buy a Prepayment Certificate to cut the price on multiples.
Are you sure one at the hospital is not the generic version? If the identical drug is running through your Part D plan, I can’t think why there should be a difference. Possibly some special arrangement between WellCare and the “non-profit” hospital.
“ Humana has built its business around the complexity of government healthcare reimbursement, ” —-https://www.capitalflowsresearch.com/p/kevin-warsh-will-engineer-the-feds?_sc=OTQzMjQwNSMxNTgxMTk%3D
As you note, Part D is a bit of a crapshoot each year. Not only do you not know what your required medications will be or cost from year to year, but Part D premiums are subject to wide variations YOY, which has caused us to change our Part D provider 3 times over the 10 years we have been retired.
Politics is becoming an even more negative factor with health care and the Medicare system. Do people really believe that the FDA and CMS are making science-based decisions today? And there hasn’t been any thoughtful, meaningful debate about the finances of our health care system in Congress in recent memory. Very frustrating.
I’ve had no problem so far with Medicare D plans and find the Medicare.gov site easy to navigate. Though I think that the number of options and lack of standardization is ridiculous and seems designed to confuse the average consumer.
However, I know several who have had serious problems. I suggest looking at costplusdrugs.com (the site started by Mark Cuban) to see if you can get non-covered or high-cost drugs at a lower price through them. A friend’s doctor has a staff member devoted to getting blood thinner medications from the UK for patients because it is much lower cost. Another friend has a high cost drug and his Walgreens pharmacy automatically applies a GoodRX discount to the drug.
The FDA appears poised to change a lot of what is and is not approved. This is an added element of chaos.
I’m trying to understand the purpose of health insurance in the United States which just seems to make things more expensive and bureaucratic than other advanced countries. I was raised a capitalist but our healthcare system sure doesn’t seem to work well. Our life expectancy lags other countries and our costs far exceed most other countries. If anyone thinks we should be proud of our system compared to other countries I’d love the hear it.
The purpose of health insurance in the US is to enrich insurance companies. Kind of like the purpose of TV with commercials is to sell an audience to the advertisers.
Not true at all. The profit margins for health insurers are lower than regulated utilities.
All their premium requests are reviewed and subject to approval. They are limited as to what percentage of premiums can be retained.
In addition, 60% of American workers are covered by employer self-insured plans. There is no insurance profit motive to approve or deny claims.
Profits have decreased, yes, but they make billions still and have no problem paying generous salaries and bonuses to their executives. I would argue that they have much smaller capital expenditures and reinvestment costs than other industries like utilities and manufacturing.
Utilities might be a poor yardstick.
As Customers Struggled, Utility CEOs’ Pay Spiked Last Year
https://energyandpolicy.org/as-customers-struggled-utility-ceos-pay-spiked-last-year/#:~:text=Atlanta%2Dbased%20utility%20Southern%20Company,Total%20Compensation
What has the price of electricity to do with CEO pay? Energy generation is a commodity and fluctuates with supply and demand.
In fact, for utilities, the generation is just a pass through cost as they make money only on the distribution.
Their costs and investments in constructing and maintaining the distribution system must be approved in advance.
Profit margins for health insurers are low, but still the CEO’s and others at those firms make a lot of money.
But you are wrong because there clearly is a motive to deny claims. Just look at Medicare Advantage plans.
From AI: ‘
Yes, for-profit health insurers in the U.S. have a strong profit motive, operating within a market-based system designed to generate shareholder returns. While many insurers exist, for-profit entities often prioritize financial gains, leading to practices like denying coverage, limiting benefits, or increasing premiums to boost profits.
Key details regarding the profit motive in U.S. health insurance:
Also, only half of Americans work at large firms (500+ employees) and of those who work at smaller firms, only about 25% of them have self insured plans.
The growing profits are due to volume not premium increases. They just can’t increase premiums to boost profits. Premiums are reviewed and approved at the state or federal level. The loss ratio must be no higher that 80/20 or 85/15%
if denial of claims was pervasive and intentional as people perceive, they would be in business.
In addition, for many large insurers like United HC earnings come from international and other lines of business.
Our health results like life expectancy, infant mortality, etc. are not the result of our healthcare system, but our lifestyles in different ways.
However, the non-system is way too complicated, uncoordinated and in many ways too expensive, but part of that is because the American people want the latest and greatest without delay. We want to go to a specialist first, so we have lots of expensive specialists.
In short, we don’t want to accept conditions which are normal and function well in many other countries.
The quality of care is for the most part is excellent, but expensive and not accessible on an equal basis to everyone.
In other countries the perception of care is that is it “free” Of course that is not the case, it is buried in high taxes, but that doesn’t matter because at the point of service, there is not a financial barrier or worry about getting care.
The US would be much better off following the same model, but our anti-tax, anti-government, empower the individual mindset won’t allow it so we pay the price and keep complaining about insurance companies which is looking in the wrong place.
We are our own worst enemy. We just like to blame anything other than ourselves.
In other countries there is much more support for expectant mothers, and for new mothers. This has a direct impact on infant mortality. See this, for example
Our healthcare system sucks, and we can thank the politicians who take money to the industry (health insurers, prescription, etc.). Who Rules America is an old book from 1967, but sums it up perfectly. It was true then and is even MORE true now. Billionaires run America in Washington now.
‘G. William Domhoff’s Who Rules America? argues that a cohesive “power elite”—comprised of the top 1% of income earners, corporate owners, and executives—dominates U.S. government policy and the economy. Using empirical data, Domhoff demonstrates how this wealthy class influences politics through lobbying, policy-planning networks (think tanks/foundations), and campaign financing, often marginalizing the influence of average citizens. ‘
Those that have the money, make the rules.
I think these confusing things will continue as long as we have employer based health insurance where we grow accustomed to not caring about how much healthcare costs during our working lives.
The obfuscation is deliberate.
My “roll the dice” plan is to retire abroad. No guarantees of a healthy or long life, but it will be a life on my own terms, not beholden to the system.
My Rx for Zanubrutinib costs $14,500 monthly. My Part D plan covers it. If the formulary changes and my provider refuses to pay for it, I would appeal and they would have to pay for it because I would die without it. I suggest you file an appeal. They are required to respond within 72 hours. If they deny it, you can try again. I agree with your analysis that all FDA approved drugs should be covered for their intended use.
Our health care system needs to cover drug costs for medicine you need to take in order to deal with its complexity and nonsensical rules.
Our MA plan sends us a list of drugs that will be covered in the following year each fall. Of course, that doesn’t help you if you are started on a non-covered drug during the year. We both will go over the $2,100 limit in April or May.
While we’ve never had an expensive drug denied I was recently denied coverage of an inexpensive generic because my physician prescribed it to be taken twice a day and it is only.covered if prescribed once a day.
The basic question is why is there a list and why does it change or be allowed to change.
The answer, of course, is plans must cover only one drug in a drug class and they select the least expensive, but that is not always in patients best interest.
When I managed employer plans the only criteria was the drug must be FDA approved and be used for the purpose for which it was approved.
Is the situation today really comparable to that 15 years ago? Today, we seem to be seeing the proliferation of many drugs which are very pricey, but also lifesaving. Just asking— I really don’t have the answer.
Specialty drugs are expensive as are drugs that treat less common conditions. The fewer people possible to use a given drug means per patient use will be higher as developmental costs are the same regardless of usage once approved.
My beef is the plans can drop a medicine AFTER you have essentially signed a contract with them. Congress could easily ban this by writing this into the law, but the insurance companies’ bribes, er campaign contributions, is preventive medicine (pun intended) from this coming to reality.
Of course, the biggest trap is that the drug plan can change the formulary during the year, but you can’t change plans if they do.
There seems to be no logic behind what is and isn’t covered. Last year, my expensive arthritis drug was only covered by the two most expensive (United Health) plans in my area. This year, it’s covered by the cheapest (Wellcare) as well.
If my arthritis comes out of remission my plan is to go on an infusion – that will be covered under Part B.
I would do the same.
However, a major reason for the increase in annual Part B costs is the large increase in physician administered medications.
I was a pharmacist in the 70s for 3 years before enrolling in medical school. I find it difficult enough to discover which meds are on a particular plan’s formulary at present, let alone whether they may be removed and whether we may receive a new diagnosis which requires a new medication(s) that may or may not be covered.
We deserve a more rational and predictable system to help us with the cost of our medications. A roll of the dice is what we have today.
nice to have some insider addition to the discussion
Good information, Dick. This is a good example why we need to expect the unexpected in retirement.
It’s only February, and we also have a new drug not covered. The cost of the drug is about $200 per month. Considering that both our Part D premiums have been $0 for the past three years, I am not too upset by this.
One of the nice things about Part D plans, is that you are only stuck in your plan for the rest of this year. 2026 is my 15th year in Medicare, I have had 14 different Part D plans over those years. All of us who use Part D roll the dice each year looking for the best combination of coverage for our needed prescription drugs at the lowest total cost. As our health situation evolves our annual choice of plan can prove to be good or bad; but the damage if we didn’t correctly predict the future is limited to one year. And, since you are wealthy, a $6000 negative surprise ain’t the end of the world financially. That is what your emergency fund is designed to handle.
Gee you make “wealthy” sound like a pejorative 🤑.
My post was not about my $6,000, but the absurdity of the system. Think of the retiree not “wealthy” faced with the same $6,000. None of this is income sensitive.
There should be one Part D plan covering every FDA approved drug. Let Individuals select deductible and co-pays from one plan. That single design could still be offered by different insurance companies around the country. .
A single plan design that covers all FDA drugs would likely be much more expensive with many companies choosing not to participate. And, if they did, the premiums and co-pays and deductibles would be much higher for many participants who take only one or two generic drugs. You have written many posts about the unrealistic coverage expectations of health care insurance consumers. Does any commercial health plan cover “ALL” FDA drugs? I think not. A plan that covers all, including some which cost hundreds of thousands per year, would not be commercially insurable. The present Part D plan lets the government limit its financial exposure and than of the participating companies. This also limits the premiums and costs of the vast majority of participants.
Not necessarily at all. Those thousand dollar drugs are specialty drugs typically considered separately. Employer plans do not typically exclude drugs. They do apply different co-pays based on the drug classification- generic, formulary or not, but there is no reason to exclude an approved drug. It’s not even logical if you think about it.
My oldest son, who is a physician in the Midwest, often tells me about the time he has to spend trying to get FDA approved drugs paid for by employer health insurance plans. There are many health care provider websites that explain this in detail. Here is one “https://wellsmedicine.com/the-difference-between-fda-approval-and-insurance-coverage/”
Weight control meds are the latest large scale example of this program. Obesity is a huge health issue. Yet many health plans do not cover the expense.
There are many other situations where there are several FDA approved drugs which may be used to treat a given condition. A health plan may only cover the least expensive drug. Even though, that particular drug doesn’t work for all patients.
I invite you to provide some evidence that employer paid for health insurance covers “ALL” FDA approved drugs.
It’s true true that employer plans may not cover drugs that do not treat disease or condition. That’s the employers decision as most are self insured.
We had a great debate deciding whether to cover Viagra when it first came out. In the end we decided to cover ten pills a month. We did not cover contraceptives, until the law mandated it.
You can argue that obesity is a legitimate problem, but does that mean treating it is someone else’s responsibility?
Would the drugs cost what they do if someone’s insurance wasn’t paying?
Can patients afford to pay themselves at these prices? Nope.
In these cases and others the coverage adds to the cost for the employer and all employees in the plan, young or old, man or woman.
We can’t simply say insurance should cover this or that and not expect the cost to be reflected in premiums.
Then we complain the premiums are too high and the insurers are ripping us off. 😁