highline56 op ed

My comments in Drug Plan Decision were OK as far as they went, making the point that what the insurer charges for the drug is important in how fast you reach the donut hole. But there was something I never noticed until I received statements from my insurer. I assumed that that it was what the insurance paid that totaled $2250 when you reached the donut hole. That is not correct.

Contrary to how normal insurance works, here you reach the donut hole when what the insurer paid AND WHAT YOU PAID totals $2250. Therefore no matter what plan you selected, if you are going to reach the donut hole before the year is out, you may want to pay the total price for some drugs yourself, saving the insurance for the drugs on which it pays the highest portion of the cost.

This is tricky, so here is an example. On a generic drug which costs $15, your co-pay may be $12, in which case the insurance pays only $3. Even though you paid most of it, the whole $15 counts toward the $2250 limit. On a drug that costs $400, your co-pay may be $51, so the insurer pays most of it.

The key is, when you reach the $2250, how much did you actually get from the insurance? To give an extreme example, if you used only the $15 generics the insurance would have contributed only $450, while you paid $1800. If on the other hand, you used the insurance on only the expensive drugs in the above example, the insurance would have paid almost $2000 of the total, and you only a little over $250.

Your insurance plan and your drug mix will of course be different, but the point is that there is almost certain to be some drugs that you should not use the insurance on, because the portion it pays is too little, while the total cost is eating up the $2250, after which you pay all until you reach $5100.