Originally published March 6, 2017, last updated December 15, 2017

Why doesn't my premium drop with fewer medicines?

BETTY FROM KANSAS ASKS: At the beginning of this new drug plan year, my husband and I are taking fewer medicines than last plan year. (Our doctors have eliminated some drugs.) Why wouldn’t our premium go down?

Ryan Answers: 

Your question is a great one, because many people think that dropping a prescription or two will lower what they pay monthly in Medicare Part D Prescription Drug premiums. However, that’s not actually how premiums are determined.

The monthly premium is the same for everyone on the same Part D plan in the same zip code, regardless of the person’s age or medications. People in different zip codes may pay slightly higher or slightly lower monthly premiums for the same Part D plan, but everyone in your zip code pays the same premium. Over time, Part D premiums have trended upward, so you likely have experienced increases each year.

However, even if your monthly premium stays the same from year to year, your total out-of-pocket costs can vary widely. In other words, when you or your doctors eliminate drugs or change them, it’s your out-of-pocket expenses, not your premium, that will be impacted. The costs of each drug and whether they’re in your particular plan’s formulary are the biggest influencers of what you ultimately pay.

If you take fewer medications this year, you may pay less than last year, because you’ll have fewer drug co-pays to pay at the pharmacy. But if you replaced two inexpensive medications with one more-expensive drug, you would pay more. For example, say you took three generic blood pressure medications that totaled only $12 a month in co-pays. But your doctor recommended that you replace those three drugs with a brand-name medication, which happens to be more expensive — $40 a month. Over the course of a year, that change will total $336 in additional out-of-pocket costs.

When you conduct your annual review of your prescription drug plan during Medicare’s open enrollment (Oct. 15 through Dec. 7), remember that the plans with the lowest premiums are not always the better financial choice. The Licensed Insurance Agents at Medicare MarketPlace^® specialize in Medicare plans, and they can help you figure out the best choice for your particular situation. If you have a more complicated question, they can refer your questions to me, and I can apply my pharmacy expertise to help you find the best coverage. We understand that prescription costs can eat up a large part of your budget, and we are happy to help explain the sometimes confusing Part D piece of your Medicare puzzle. If you have any questions, call 1-800-639-0781 to speak to a Licensed Insurance Agent or to me.