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What if the neighborhood pharmacy isn’t in-network?

Jacob Johnson has been going to the same pharmacy on the corner for the last 25 years.  He knows the pharmacist and his kids.  He just turned 65 years old and has a Medicare Part D prescription drug plan.  He visited the pharmacy to pick up his first prescriptions under Medicare, only to discover that the pharmacy is not part of his drug plan’s network.  What can he do now?


Medicare requires every drug plan to have a list of network pharmacies for its members to use.  Generally drug plans cover only medications that are provided by a network pharmacy.  The beneficiary is usually responsible for prescription medications purchased at a pharmacy that is not in the network.  The costs can add up.  For example, Jacob's drug regimen includes four brand-name and two generic drugs.  His annual costs at an out-of-network pharmacy would be $17,981.

Jacob has three options for controlling his drug costs.

  1. He can transfer his prescriptions to a pharmacy that is in the plan’s network.  This would drop his cost to around $3,000 to $3,500, depending on the plan.
  2. He can consider using a mail order pharmacy. In some cases, this can save money.  Instead of paying almost $18,000, his annual costs would drop to $3,174.
  3. He can switch to a prescription drug plan with a network that includes his local pharmacy.

Jacob could carry out either of the first two options any time during the calendar year.  He would have to wait until the Open Enrollment Period to switch plans (option 3).  

A word to the wise:  Jacob should have checked the Medicare Plan Finder prior to enrolling in Medicare.  He would have learned that the neighborhood pharmacy was out-of-network and been able to find a plan that included it.  

Learn more about Medicare Part D and prescription drug coverage.

Last updated: 07-28-2013