No, PDP is not a drug; it stands for Prescription Drug Plan. PDP. For those of you in or about to be in the Medicare-eligible market chances are extremely high that you are very possibly in or will choose to be in a PDP that is not the most cost efficient for you situation.
If you are new to Medicare it’s important to understand that you will need a separate Medicare PDP if you choose to be in a Medigap/Supplement health plan. Those are the lettered plans you have heard about and yes you might not be in the most cost efficient one of those either.
If you are in a Medicare Advantage plan your PDP is part of the Advantage plan but you still have co-pays for the drugs themselves.
To best understand your options it’s important to be cognizant of how the carrier PDP’s are designed. All drugs are divided into what is known as Tiers and Formularies .The Tiers and numbered 1-5. The lower the Tier the drug is in the lower cost. A Formulary can be thought of as a list of drugs available.
Now, here is the catch with Medicare PDP. Each Medicare PDP carrier has their own Tiers and Formulary so both in theory and in reality per the many clients I have worked with. Two carriers can have the same drug in different Tiers creating a substantial cost difference. The same applies to the Formulary as one carrier can have a drug in its Formulary and another carrier may not also creating a large cost difference.
In addition to the actual drug cost variance between the carriers every PDP carrier charges a monthly premium, they, not the drug companies receive. Also, most have a yearly deductible for drugs that are Tier 3 or Higher. The monthly premiums range from approximately $13.50 to about $95.00 and the deductibles from $235.0-$435.00, which is the max allowed by Medicare.
The carrier with Medicare approval can move a drug to a higher or lower Tier and/or add or remove a drug from their Formulary creating major cost changes. This usually happens with the Tier 3-5 drugs, and there is no way to know in advance if a drug you are currently taking or might get prescribed during the year is going to have an increase or decrease in cost during the year.
Why do almost all my clients before I work with them wind up in PDP plans Not the most cost efficient for them? The carrier media bombardment convinces and very often has brain washed them into believing the more they pay in premium regardless of drug costs the better off they are. What they don’t realize is the most important concept with PDP is, “The Carriers Do Not Make The Drugs.”
With that in mind why would you as some of clients have pay a $35.00-$95.00 premium per month to the carrier when you are taking Tier 1-2 drugs that cost no more $5.00 or so each per month when you can pay a monthly premium of approximately $13.50 for the same drugs.
To be transparent cost efficiency with PDP no matter what Tier Drugs you are taking, is determined by the combination of ones total monthly and yearly cost between the carrier premium, actual drug costs, and the deductible. With 35-40 PDP plans in the NJ and NY Metro area you can attempt the exhausting, time consuming, and frustrating process of attempting PDP cost efficiency yourself or work with a Medicare licensed and certified professional.
Robert Remin is a licensed and certified independent agent with all Medicare carriers, NJ, NY, and Ct. Robert‘s only goal is to provide you a customized solution for all your insurance needs (without pushing products). He also works with advisers well versed in innovative tax strategies and design. For questions, or a cost free consultation, contact Robert - 914-629-1753 or This email address is being protected from spambots. You need JavaScript enabled to view it. - www.robertremininsurance.com Learn about 2021 Medicare options in Robert’s Next Free Zoom-Solving the Medicare Puzzle/Medicare Myths Exposed Class-Call, txt, or email for next class dates
