Why your January drug bill is different from December's

Every January the office phone rings with the same call. The prescription that cost twelve dollars in December cost a great deal more this morning, nothing has changed, and what happened. Usually three things happened, and all three were announced in a letter that arrived in September.

One: the deductible reset

Part D coverage runs on a calendar year. Whatever you paid toward a deductible last year is gone on 1 January, and if your plan has a deductible you start paying the plan's discounted price yourself again until it is satisfied.

Many plans apply the deductible only to higher tiers, which is why someone taking only preferred generics may never notice it while someone on a tier 3 brand notices immediately. This is also why a plan advertising no deductible is not automatically cheaper. If your drugs sit on tier 4, the deductible was never your problem.

Two: the drug moved tier

Formularies are refiled every year. A drug that sat on tier 2 can appear on tier 3 or tier 4 in the new plan year, and the cost share changes with it. Nothing about your prescription changed; the plan's commercial arrangement did.

The five-tier structure most plans use looks like this, and where your drug sits matters more than the plan's premium:

• Tier 1, preferred generic: a small flat copay, usually exempt from the deductible.
• Tier 2, generic: a modest flat copay.
• Tier 3, preferred brand: a larger copay, and often where the deductible starts to apply.
• Tier 4, non-preferred: usually coinsurance, a percentage of the price rather than a fixed amount.
• Tier 5, specialty: coinsurance on high-cost drugs, and generally not eligible for a tier exception.

Three: a new restriction was added

Plans can add prior authorisation, step therapy or quantity limits at the plan-year boundary. The pharmacy does not always explain which one has blocked the fill; they simply say the plan has rejected it. Prior authorisation means your prescriber has to submit clinical justification before the plan will cover the drug, and that takes days, not minutes.

The pharmacy counter is the worst possible place to discover a prior authorisation requirement. The Annual Notice of Change is the right one.

What to do when it happens

1. Ask the pharmacy for the rejection reason. Deductible, tier change and prior authorisation look identical from the customer side but need different responses.
2. If it is a tier change, ask about a tier exception. Your prescriber submits a supporting statement explaining why the lower-tier alternatives are not appropriate. These succeed more often than people expect.
3. If the drug has come off the formulary entirely, a formulary exception is the equivalent request, and there is a defined appeals ladder above it if it is refused.
4. If it is prior authorisation, get the request filed the same day and ask the pharmacy for an emergency supply while it is pending.
5. If none of that works, note it for the Annual Enrollment Period. It is evidence that this plan no longer matches your medication list.

The letter that prevents all of this

Your plan sends an Annual Notice of Change each autumn. It is dull, it is long, and it lists every one of these changes before they happen. Three pages of it matter: the premium and deductible for next year, the formulary changes affecting drugs you take, and any new restrictions.

Reading it in October means you can still act. The Annual Enrollment Period runs 15 October to 7 December and changes take effect on 1 January. Reading it in January means you are looking at a problem you can no longer fix until the following autumn, unless a Special Enrollment Period happens to apply.

We run a drop-in Part D clinic every November for exactly this reason. Bring the list, we run it against every plan available at your address, and you leave with a printed comparison whether or not you change anything.

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