I saw a client last week, and she mentioned she takes Lipitor and it is expensive. I told her Lipitor has gone generic and it should be cheaper now. The generic name for Lipitor is Atorvastatin. I called Costco and asked for the retail price for 30 pills, 10 mg dosage.  The price: $17.00.

My client’s co-pay with her Part D plan is 20% of the retail cost of the drug after she pays a $320 deductible. Then her cost is $18.14, meaning the retail cost of the drug is $90.72.  How is this possible?

I went to the medicare.gov Plan Finder, put in Atorvastatin 10 mg, and looked at how it is covered by the 30 Part D plans that are available in Arizona. And low and behold…..people with Part D are being ripped off!

Medicare.gov lists plans in order from the lowest to highest cost for purchasing a list of prescriptions. I was shocked to see the huge cost difference from plan to plan for Atorvastatin. Because I am an insurance broker, I’m not supposed to name names in my blog, but I think in this case I must. I am certainly not promoting these plans – just providing information from Medicare.gov.

Remember,  30 Atorvastatin 10 mg pills cost $17.00 for a person without insurance.

Here are some of the results from the Medicare.gov Plan Finder:

Blue Medicare Rx: $30.20 monthly premium:  co-pay of $8.00. So this drug is treated as a generic on this plan.

First Health Part D: $23.70 monthly premium: co-pay of $29.76. The retail cost is posted as $70.86.

Health Net Orange Option 1: $25 monthly premium with a $320 deductible. $29 co-pay after meeting the deductible. The retail price is listed as $112.43.

United American Preferred: $50 monthly premium with a $110 deductible. $9.00 co-pay after meeting the deductible.

AARP Medicare Preferred Rx:  $28.80 premium;  co-pay of $43.00. This is the co-pay for a “preferred brand”.

Humana Enhanced: $33 monthly premium; co-pay of $39.00. Retail cost is listed as $89.95.

Humana Walmart-Preferred Rx:  $15.10 monthly premium plus a $320 deductible. $17.41 co-pay after meeting the $320 deductible (ordering by mail or purchasing at Walmart). The retail price is listed as $87.07.

MY QUESTIONS ARE:

Why is Atorvastatin treated as a generic on two plans but a brand drug on the others?

How is it that Costco sells Astorvastatin for $17 while insurance companies are paying $70 – $90 or more for the exact same drug? How is this possible?

It’s the law: While insurance companies administer Part D, Medicare actually pays the bills to the tune of more than $60 billion in 2011. When Part D was created in 2003, the law said only insurance companies (and not the government) can negotiate drug prices with pharmaceutical companies.  Maybe Costco should be put in charge of negotiating drug prices!! There is something seriously wrong with this picture.

If Medicare is paying the drug bills, is it paying the Costco price or the insurance company prices, which are five times higher than Costco’s price?

Note: To get pricing information, the Medicare.gov Plan Finder requires you to put in a pharmacy, so I chose Frys, which was the first one on their list.

Note: I called Humana and UnitedHealthcare to confirm their prices and co-pays. They treat Atorvastatin as a preferred brand drug.

A client of mine sent me an email about a problem he ran into with his Part D coverage. The problem involves his prescription for Azacite, which comes in the form of eye drops. Eye drops, or any liquid medication that is measured by “drops”, can present problems because the actual number of doses can be difficult to calculate. Here is an email I received from Don last week.  He gave me permission to put it in my blog.

Here’s a recent experience of mine that I think your clients might benefit from. It’s necessarily a bit detailed, so please bear with me.

Yesterday, for the fourth time this year, I refilled my prescription at Walgreens for Azacite, an eye medicine. I was charged $85 for it. I knew that was way more than I’d paid previously, but you either pay or you don’t get your medicine. So I paid, went home and called UnitedHealthcare. They couldn’t explain why, even though each of the four purchases was for 2.5 ml of medicine, the copay jumped from $45 to $85. So they checked with the pharmacy and called me back. Here’s what happened:

Even though the label on the medicine indicates the quantity purchased as 2.5 ml, the insurance company makes the pharmacy compute how many drops are in a 2.5 ml bottle and then, based on the prescribed frequency of usage – eg., once a day — come up with the number of days the 2.5 ml should last.

If the computation shows 30 days or less, you pay the minimum copay (in this case, $45). If it computes to more than 30 days, then you must pay for an entire additional month’s copay (in this case, $85).

The record shows that on my first purchase, in Feb., they computed a 10-day supply; the next two purchases, they computed a 25-day supply, and on yesterday’s, a 37-day supply. That bumped me up to the two-copay level.

When I presented all these facts to Walgreens today, they refunded the difference between one-month  and two-month-supply copays. They could not explain how they came up with a ten-day supply, then a 25-day supply, then 37 when filling the exact same prescription.

I think the lessons for consumers of medicine are:

(1) Always save your pharmacy receipts.

(2) If it’s a liquid, make sure the pharmacy doesn’t give you more than a one-month (one copay) amount unless your doctor specified more than a month’s supply. (In the case of pills, the days-of-supply figure always given, but not for liquids, so you have to ask!.)

(3) If the price of a medicine you take regularly suddenly goes up, find out why. If the producer upped it, you have no recourse, but it might be the pharmacist’s mistake and you can get a refund.

(4) If the first person you speak to at your insurance company doesn’t give you a satisfactory explanation (as happened with me), hang up and call again so you can talk to a different person.

Has anybody else run into a similar problem?

I looked up Part D drug plans for Arizona on Medicare.gov to find out how many stars they get. For 2012, there will be 30 Part D plans available in Arizona, and most of them get 2.5 or 3 stars, which is average. The star ratings go from 1 to 5, five being the best.

Only one Part D plan in Arizona gets 4 stars. This plan costs $47.20 per month and has a $320 deductible.  I don’t know if this 4-star plan is worth $47.20 per month when you can get a 3-star plan with the same deductible for $15.80.

The $320 deductible means you pay the first $320 of your drug costs, and then the plan kicks in.

To compare plans, I put two drugs into the Medicare.gov Plan Finder:  Crestor and Proventil HFA.   The $15.80 plan covers Crestor for 20% of the retail cost of the drug after the deductible is met. So, once the $320 deductible is paid (after two months), the cost of Crestor would be $27.20.  This plan doesn’t cover Proventil (which costs $57).

Most of the plans do not cover the Proventil inhaler. Most cover Crestor for a $45 co-pay (plans with a deductible and plans without). Only a couple of plans cover Proventil for a $27 co-pay.

The 4-star plan didn’t have any information on what its co-pays are, or what the drugs I entered would cost, so I can’t say if it’s worth $47.20 per month.

My conclusion is that 4 stars vs 3 stars is not a big deal. The key is:  Which plan covers your drugs at the lowest overall cost for the year?  The Medicare.gov Plan Finder will give you that info, but you need to figure out where to find it.

And I will say once again….”Why are there so many Part D plans? Why does it have to be so complicated? Is it saving Medicare money?”

Insurance companies manage Part D plans and negotiate prices with drug companies, but Medicare pays the bills – to the tune of $78 billion in 2010!!

Part D really bugs me because it is so complicated – and plans change each year. One of my clients called me to say her $25 plan premium is going to $71 for 2012.  I have left messages for two other clients who are enrolled in that plan, which seemed like a good deal two years ago.

Medicare handed Part D over to insurance companies and made it ridiculously complicated.  Why? Why? Why?

PS:  I know why.