In our case there were four items that were prohibitively expensive through the AARP / United Healthcare plan. These expensive items were exhausting our allowance prematurely. The most expensive AARP drug plan items were around $5.00 per pill vs. $0.50 per pill off plan. When we went over the allowance we had spent $2,200 of the $2,700 on these four items.  Here are the details of the savings in our case.

Example of savings delivered by Canadian pharmacies:

Validate per pill pricing:
Plavix (Clopidogrel Bisulfate)
Tricor (Fenofibrate)

This article is divided into four parts.

1. A strategy for abandoning AARP and using Canadian meds plus Wal-Mart $4.00 generic.

The subscriber expenses for the AARP plan are $2,151. If you’re total bill for meds is less then this it’s more cost effective to abandon the plan.  To determine if this is so in your case review your AARP billing and determine your big ticket items. Then see what these items cost from Canada. Our cost for getting everything from Wal-Mart ($4.00 generic) except the four big ticket items was $500. Our big ticket items from Canada cost $1,350.

Canadian only – abandoning AARP:

Canadian               $1,350              No AARP or part D.
AARP                     $   500              Wal-Mart $4.00 generic and other low priced meds.
Gap copay             $       0              Coverage gap pay 100% after $2,700.
Total year              $1,850              Save $2,000 over worst case.

2. A strategy for a mix of AARP / Wal-Mart and Canadian:

The subscriber expenses for the AARP plan are $2,151. We were getting a mix of generic $4.00 items from Wal-Mart and some expensive items from the AARP plan. By September we were $300 over the allowance of $2,700. Buying the four big ticket items from Canada for the rest of the year cost $350. If we did not go over the allowance we could have reduced our total spend by $200 and stayed within the allowance.

Supplement AARP with Canadian: (actual spend 2009)

Canadian               $   350             Off plan Canadian.
AARP                     $2,151             Total subscriber expense – see details below.
Gap copay             $   300             Coverage gap pay 100% after $2,700.
Total year              $2,801             Save $1,000 over worst case.

3. A case for not using AARP only:

This case is a based on our exceeding the allowance in September and paying 100% copay for the rest of the year. In our case we would have paid an additional $1,500 copay and never reached the stop loss threshold of $4,350.

AARP only – no Canadian: (pay 100% copay AARP coverage gap – to $4,350)

Canadian               $       0             Off plan Canadian.
AARP                     $2,151             Total subscriber expense – see details below.
Gap copay             $1,800             Coverage gap pay 100% after $2,700.
Total year              $3,951             No savings – worst case scenario.

4.  Details of the AARP plan as well as actual billing for 2009.

The AARP/United Healthcare insurance provides a drug plan which requires social security part D.  This plan is aggressively marketed by AARP/United Healthcare. Large segments of the senior population have signed up for this drug plan.

AARP drug plan structure:

Annual deductible                 $295
Initial coverage                     Up to $2,700 in total drug costs.
Coverage gap                         After $2,700 in total drug costs; up to $4,300 in copay.
Catastrophic coverage          After $4,300 in out of pocket (copay) no limit.

It’s important to recognize the following:

1. The primary benefit is $2,700 worth of drugs.
2. The $2,700 is combined copay and plan pay.
3. The coverage gap is $4,350 of copay only. – 100% your money.

The following represents the total of subscriber payments. There are four elements of expense to the subscriber. These are actual figures are from a family member’s plan.

• Premiums                                 Month              Year
• Medicare Part D                          $40               $   480
• AARP Rx Plan                               $23               $   276
• AARP Deductible                                             $   295
• Co-payment                                                     $1,100
• Total year                                                         $2,151

The actual benefit to the subscriber is as follows:

• Allownce                                   $2,700   Combined subscriber copay and plan pay.
• Co-pay                                     - $1,100   Subscrber copay.
• Actual benefit                           $1,600    Plan pay. 

• Plan benefit                              $1,600
• Plan expense                          -  $2,151
• Actual plan benefit                  ($ -551) – loss

The primary benefit of $2,700 allowance includes co-pay and plan pay.  Deducting the co-pay of $1,100 from the $2,700 allowance produces an actual benefit of $1,600 and a net loss of $551.

The following are actual bills we received. The 07/31/09 billing shows us $279 short of the $2,700 allowance. The 09/30/09 billing shows us $300 over the $2,700 allowance.

07/31/09 billing shows “Stage 2” approaching the $2,700 allowance.

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This bill shows us in “Stage 3” over the $2,700 allowance by $300.

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