Medicare Enrollees With Drug-Plan Problems Get a Do-Over

Some older clients who were happy with their Medicare coverage a few weeks ago are looking more carefully at their prescription benefits and finding … problems.

One client wants a particular form of insulin. Another needs a new miracle drug with no generic competition. A patient's out-of-pocket cost for a drug might be $50 per month at one plan and high enough to infuriate a high-net-worth client at another plan.

If you sell Medicare plans for a living, you know the "secret" solution. If you're just starting to learn about the subtleties of Medicare, the answer is: the other Medicare plan enrollment period.

Thanks to the seriously underpublicized annual Medicare Advantage open enrollment period, which runs from Jan. 1 through March 31, clients unhappy with their prescription benefits "can switch to a new Medicare Advantage plan better suited to their needs," according to Bob Rees, chief sales officer at eHealth, a company that helped create the online health insurance sales industry.

Medicare Advantage open enrollment period basics: The better-known Medicare plan annual election period runs from Oct. 15 through Dec. 7 every year. Big stars promote that enrollment period on TV. It gives anyone eligible for Medicare a chance to sign up for any Medicare Advantage plan.

The annual Medicare Advantage open enrollment period is different. It gives clients who already have Medicare Advantage plan coverage a chance to switch to different Medicare Advantage plans, or back to original Medicare with a stand-alone prescription drug plan.

Using the other, lesser-known enrollment period can help clients switch to plans with "formularies," or lists of covered drugs, that do a better job of meeting their prescription needs.

The plans: Under existing rules, Medicare plans update their formularies all that time.

Plans may make the moves to take advantage of good deals from manufacturers, hold down their costs, increase profits and encourage patients to use drugs that should improve their overall health.

Plans are supposed to warn enrollees about formulary changes.

But "some people who maybe didn't review their options or pay much attention during Medicare's fall annual enrollment period are only realizing now, in January, that drug benefits under their current plan have changed and no longer a great match for their needs," Rees said.

The needs: Another possible reason for January formulary regrets is the effects of time.

"A lot can change in a year," Rees said. "First, the drug coverage needs of individuals can change. In a recent survey, we found that 41% of Medicare beneficiaries began using a new drug within the past year. So, that's one factor that can lead someone to reconsider their drug coverage…. Changing drug needs and drug coverage can affect anyone on Medicare, regardless of income."

The rules: The Inflation Reduction Act of 2022 includes provisions that capped what Medicare enrollees with Medicare drug coverage are supposed to pay for insulin at $35 per month and that are supposed to give Medicare the ability to try to bargain for better prices for 10 common drugs.

In spite of all the news about rule changes, "policy factors probably aren't having a huge impact on individual Medicare beneficiaries this year," Rees said.

One reason: The insulin caps have arrived, but Medicare bargaining for other drugs has not.

Next year, when the government starts directly regulating prices for some drugs, the situation might be different, Rees said.

The marketers' lesson: "I think there's a lot of room for beneficiaries to be better educated about the current Medicare Advantage open enrollment period," Rees said. "A lot of them don't know about it or understand how it works. They need to know that if they're currently on Medicare Advantage and not happy with their plan, they have options."

The tech: Helping clients find the plans with the right formularies is an example of a process that relies heavily on access to shopping support tools.

Many agents and brokers who specialize in Medicare plan sales make have use of systems from distributors others that help with formulary-based shopping.

At eHealth, the Medicare shopping system gives users the ability to enter their prescriptions into a recommendation tool and see which plans will cover those drugs with the lowest out-of-pocket cost.

Bob Rees. Credit: eHealth