While it’s true that companies selling Medicare Part D plans can’t raise their premiums mid-year, sometimes things can happen that affect the level of coverage you’re getting from. One of those is called a mid-year negative formulary change.
A “negative formulary change” happens when a Medicare insurance company changes what prescriptions are covered and how much they’ll cost you, right in the middle of the plan year!
Can they do this? Sure can, and happens all the time. If this happens to one of the prescriptions you take, you’ll get a nice little letter from your insurance company telling you what’s happening, and why. You’ll usually get notified at least 60 days before the change is made. Common changes your insurance company can make mid-year are:
- Remove the prescription from the formulary because it was removed from the market
- Stop covering a prescription because Medicare decided to stop paying for it
- The insurance company placing quantity limits on the drug (usually due to high cost, or potential for abuse)
- Mandating prior authorization (which means special permission needs to be granted in order for you to fill your prescription)
- Moving prescriptions in a higher Tier (more expensive for you)
Let’s say you have a Medicare Part D plan who makes a negative formulary change to one of your prescriptions. Well, next time you fill that prescriptions, insurance companies are required to send a written notice to you within 3 business days of the fill, explaining that in the future, you’ll have to contact your doctor for a different prescription.
How can they do this? Well, it’s complicated, but I’ll summarize: Every year, plans new and old begin discussing the plans, prices and benefits they’re going to offer the upcoming year around February. That’s right! Mere weeks after the Annual Election Period (AEP) ends, companies begin to plan for the following year. From there, companies on their bids which they submit to Medicare around June/July for the following January. Insurance companies must bid each year, and if they’re approved to offer Medicare Part D, they only have permission from Medicare for the upcoming calendar year. As a part of this bid, these companies must tell Medicare what drugs they’re going to cover, what benefits they’re going to offer (copay tiers, etc.) and how much monthly premium their plans are going to cost you, the consumer. Once Medicare accepts an insurance company’s bid, the company is locked into those prices and benefits for the entire year. Likewise, once you pick a Medicare Part D plan during the AEP, you’re usually stuck with it for a year.
What are your options if this happens to you? Well, for one, you should call your doctor and ask him or her to switch your prescription to something else that is on the formulary. That’s by far the easiest solution. If you’ve tried everything else and really need to keep that prescription going, you can call your insurance company and request an exception be made. The process is long and tedious and yes, there are lots of forms to fill out and phone calls to sit on. If that’s your thing, or you for some reason really need the particular prescription that’s being affected, then by all means please travel down this path.
But at Prepare for Medicare, we strive to simplify Medicare, so your best bet is to get your doctor to find an alternative prescription, or simply pay for it out of your own pocket until the fall. Then, vote with your feet! AEP begins October 15. Grab your prescriptions, head on over to Medicare.gov and find a new Medicare Part D drug plan that meets your needs.