This plan offers a substantial package of benefits, most of which are obvious, e.g, zero copays, zero co-insurance and zero deductible for medical claims. Other benefits are less obvious but just as substantial. For example, ordinary Medicare Advantage plans generally have what’s called the “donut hole” which affects what a member pays for prescription drugs. Usually, there is a stage one, called the Deductible Stage, in which you pay the full Rx contract price. Then there’s a stage two, called the Initial Coverage Stage, in which the plan pays its share of Rx costs and you pay yours up to a specified annual “total drug costs” limit. In stage three, called the Coverage Gap Stage, aka the donut hole, the plan’s share goes down and your share increases up to a specified annual “total out of pocket cost“ limit. Finally, in stage four, the catastrophic max stage, the plan pays your full Rx cost and you generally pay nothing for the rest of the year.
HOWEVER, under this Aetna Medicare PPO plan, there is no deductible stage. Next, under stage two, your share, which can be up to 25% of the Rx contract price, is capped at $350 per prescription, up to a specified annual ”total drug costs” limit, which in 2021 was $4130. Now, this sounds pretty good, but it leads you to believe that you may be on the hook for some hefty coinsurance costs if you should need a lot of very expensive drugs. But actually you wouldn’t be. Your stage two cost limit is not what you pay out of of pocket, but what the total drug costs happen to be. So, you can reach the stage two limit quicker than you think, especially when the bulk of the cost is being borne by the plan or by others besides yourself. Here is the language that Aetna uses to describe this.
Under the plan, “total drug costs” is the total of all payments made for your covered Part D drugs. It includes:
- What the plan pays.
- What you pay.
- What others (programs or organizations) pay for your drugs.
Next, under stage three, this plan features a special Medicare discount program which essentially eliminates the coverage gap. In other words, your stage three costs are pretty much the same as they are under stage two until your out of pocket costs approach a specified annual catastrophic limit, which in 2021 was $6550. OK, but what about this coverage gap stage? Couldn’t you end up paying up to $6550 per year, even after subsidies? Actually, not very likely. Here’s how Aetna explains this.
“Out-of-pocket costs” include:
- What you pay when you fill or refill a prescription for a covered Part D drug. (This includes payments for your drugs, if any, that are made by family or friends.)
- Payments made for your drugs by any of the following programs or organizations: “Extra Help” from Medicare; Medicare’s Coverage Gap Discount Program; Indian Health Service; AIDS drug assistance programs; most charities; and most State Pharmaceutical Assistance Programs (SPAPs).
Notice how the “out of pocket costs” include the subsidy under the plan’s Medicare discount program. They also include various other subsidies you may qualify for from charitable foundations and government programs. This means that the biggest chunk of the out of pocket cost isn’t actually coming out of YOUR pocket. Which means that if you need REALLY EXPENSIVE drugs, you can reach the catastrophic limit stage without it costing you an arm and a leg. All of which makes the Aetna Medicare Advantage plan even better than I originally thought it to be.