A new federal report says Medicare Part D plans spent millions covering drugs they were never supposed to cover. Read that again. Not the pharmacy. Not you. The plans themselves, paying for things outside the rules.
The finding comes from the HHS Office of Inspector General, and Fierce Healthcare reported on it here. In short, auditors found Part D dollars going toward over-the-counter products that fall outside what Part D is allowed to pay for. The government is now looking at how to claw some of that back and tighten the rules.
Here is why I am writing about it. Most people read a story like that and think, “well, that’s Washington’s problem.” It is not. Every dollar of waste in Part D eventually shows up in the same three places: your premium, your formulary, and your pharmacy network. And you renew your plan every single year without reading any of it.
I have sat at a lot of kitchen tables in Texas and beyond. The single most common thing I see is not fraud. It is autopilot. Somebody picked a drug plan in 2019 because it covered their blood pressure pill, and they have never looked again. Meanwhile the plan changed. Their meds changed. The math quietly stopped working.
What does government waste have to do with my premium?
It filters down, and it usually shows up as tighter rules rather than a bigger bill.
When auditors flag improper spending, plans respond. They do not simply eat the loss. They add prior authorization. They add step therapy, which means you try the cheaper drug first before the plan pays for the one your doctor wanted. They move drugs to higher cost tiers. They narrow which pharmacies count as preferred.
None of those changes announce themselves. They arrive in a booklet called the Annual Notice of Change that shows up in your mailbox in the fall, usually under a stack of catalogs. The plan is legally required to tell you. It is not required to make you read it.
So the honest translation of that OIG report is this: pressure is on Part D. When pressure is on, plan design gets stricter. The people who get hurt are the ones who never look.
What are the most common Medicare Part D plan review mistakes?
The biggest one is assuming that because your plan worked last year, it works this year. It is a different plan every January, even if the name on the card is identical.
Here are the mistakes I see most often, in rough order of how much they cost people:
- Never checking the formulary again. Your drug list is not permanent. A medication that was covered in one tier can move to a higher one, or drop off entirely.
- Shopping on premium alone. A low monthly premium with a bad tier placement on your most expensive drug can cost you far more over twelve months than a slightly higher premium with better coverage.
- Ignoring the pharmacy network. Many plans have preferred and standard pharmacies. Same drug, same plan, different price depending on which door you walk through. People lose real money here without ever knowing.
- Forgetting to add new prescriptions to the math. You started a new medication in April. Your plan choice was made the previous October, back when that drug did not exist in your life.
- Assuming a Medicare Advantage plan’s drug coverage is fine because the medical side is fine. The drug portion is a separate set of rules living inside the same plan. It deserves its own look.
- Waiting until you are at the pharmacy counter to find out. That is the worst time to learn something changed.
None of these are exotic. They are ordinary. That is exactly why they are expensive.
Doesn’t my plan tell me when something changes?
Yes, and that is the trap. The disclosure happens. The comprehension usually does not.
Plans send you the Annual Notice of Change and the Evidence of Coverage. These are real documents with real information. They are also long, dense, and written by people who are protecting the plan legally rather than helping you decide practically. If you have ever tried to find your specific drug in a formulary PDF, you know what I mean.
So the system technically works and practically fails. You were told. You just were not told in a way a normal human being processes while making dinner.
My rule is simple. Once a year, someone should sit down with your actual medication list, your actual pharmacy, and your actual plan and run the numbers. Not the plan’s marketing. Your list. That is what a real Medicare plan review is, and it takes less time than most people fear.
When can I actually change my drug plan?
There are specific windows, and missing them means waiting a full year in most cases.
The Annual Enrollment Period each fall is the main one. That is when anyone with Medicare can change Part D plans or change Medicare Advantage plans for the year ahead. If you are in a Medicare Advantage plan, there is also a window early in the year that gives you one chance to switch or move back to Original Medicare. I walk through the details on the Medicare enrollment periods page, and there is a separate breakdown of the Medicare Advantage open enrollment period if that is your situation.
There are also Special Enrollment Periods. Moving out of your plan’s service area. Losing other coverage. Qualifying for Extra Help. Your plan leaving the market. These are real and they are more common than people think, especially when carriers pull out of a county.
Here is the part people get wrong. They wait until they have a problem, then discover the door is closed. The time to look at your drug plan is when nothing is wrong, because that is when you still have options.
Is switching plans always the right answer?
No, and I want to be straight with you about that because it costs me business to say it.
Most years, for most people I sit with, the answer after a review is “stay where you are.” The plan still covers the drugs. The pharmacy still works. The math still holds. I tell them that, we shake hands, and I make nothing on the visit. That is fine. That is the job.
Switching has real costs too. A new plan means a new formulary to learn, possibly new prior authorization paperwork your doctor has to redo, and sometimes a new pharmacy relationship. If your current plan is working, chasing a slightly lower premium can create more friction than it saves.
There is also this. A drug plan that looks worse on paper might be the right one because it covers the one specialty medication that would otherwise wreck your budget. Averages do not fill prescriptions. Your list does.
And if your medications are stable and your costs are predictable, you may be better served spending your energy elsewhere, like looking at whether a Medicare Supplement or a Medicare Advantage structure fits your health and travel patterns better than what you have now. The drug plan is one leg of the stool, not the whole chair.
What should I actually do about it this year?
Do one honest inventory, then decide from facts instead of habit.
Start with a written list of every medication you take, including dosage and how often. Add your preferred pharmacy. Add anything your doctor has mentioned starting soon. That single sheet of paper does more work than any brochure.
Then check three things against your current plan: is every drug on the formulary, what tier is each one on, and is your pharmacy preferred or standard. If you want help with the specifics, the Part D drug plan page lays out how the pieces fit together.
If you would rather not do it alone, that is what we are here for. We are an independent agency, not a call center reading a script. Scott sits down with people, works through the actual list, and tells them plainly when the answer is “do nothing.”
Not sure whether your current plan has gaps you cannot see? Take the Medicare Clarity Score. Find out in 3 minutes if your plan has hidden risks. It is short, it is free, and it will tell you whether a full review is worth your time.
The OIG report is about millions of dollars and federal oversight. Your version of it is smaller and more personal. It is one prescription, one tier change, one pharmacy that stopped being preferred. Nobody is going to audit that for you. But you can check it in an afternoon, and once a year is enough.
Trusted SR Solutions is not affiliated with or endorsed by the federal government or the Medicare program. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Questions? Call Scott at 512-844-3983.