Medicare has been a boon to the nation’s aging population since it went into effect in 1965, enabling seniors to get the hospital care they needed without wiping out their life savings. It wasn’t until 2006 that the federal government recognized that drug costs had become too burdensome and that recipients needed more help.

Enter Medicare Part D, the prescription drug plan that saved millions of recipients from the painful choice of whether to buy food or their prescriptions.

Of the 62 million Americans enrolled in Medicare, 46.5 million are enrolled in Part D plans, with 53% in stand-alone plans and 47% receiving drug assistance as part of Medicare Advantage coverage, the Kaiser Family Foundation reports.

Initially, Part D helped defray the cost of the first $2,250 in prescription medication before beneficiaries entered the “donut hole” and had to cover the next $3,600. After that, catastrophic coverage kicked in.

But that was then. Figuring out how much you will pay for drugs got even more complicated.

Dave Castillo, who has worked in the insurance business for more than two decades and owns DaveSurance in suburban Chicago, says consumers really need an expert to help them pick the Medicare Part D plan that meets their needs.

This is an interview International Business Times had with Castillo.

IBT: How does Part D differ from the rest of Medicare?

Castillo: Medicare A and B is run by the federal government. With drug plans, everything is privatized. The federal government pays the insurance companies to manage the coverage. When someone turns 65 and gets Parts A and B, they need to take a separate look at Part D plans.

The system is strange at best, and every year it changes a little bit. Some drug plans have deductibles; some have co-pays. The federal government provides a model, but most plans don’t use it and apply for waivers instead. Those waivers are granted as long as actuaries sign off on them, saying they’re comparable.

Advantage plan drug coverage is very different than stand-alone Part D coverage. They’re not even on par with each other. Most Advantage plans do not include deductibles and most stand-alone Part D plans include deductibles.

IBT: What does the federal model call for?

Castillo: In the 2021 model, there’s a deductible phase under which beneficiaries pay 25% of the first $4,130 in drug costs with the insurance companies picking up the rest. Then the beneficiary pays 25% of the next $2,420, with the drug manufacturers picking up the balance. Once that $6,550 plateau is hit, the Medicare beneficiary pays 5%, the insurance company picks up 15% and the government covers the remaining 80%.

The truth is, most Part D subscribers never get to the $4,130 level. But for those who are receiving astronomically priced meds, that 25% might be a really big number.

IBT: How are drug prices determined?

Castillo​: This gets really murky. There’s an under-the-table rebate system in place. Benefit managers negotiate with the drug companies to come up with a secret rebate. The argument has been made that the system helps maintain competition. It was written into law in 2003 and no one has been able to change it.

Several attempts have been made to put caps on what someone would pay for these uber-expensive meds. Drug plans do not have an out-of-pocket limit like the medical side unless the drug is administered by infusion and part of an Advantage plan. There’s no maximum limit on drugs dispensed from a pharmacy.

I would love to see a cap on these things. There’s a kidney cancer medication that’s $70,000 a year. It’s just ridiculous.

IBT: Are all drugs covered?

Castillo: One of the problems is if you have five different manufacturers making a drug, say, long-acting insulin. A plan may cover only three of those drugs. If you choose a Part D plan just because it’s the lowest priced, you might be in trouble. If a medication is not on the plan’s formulary, you might have to go to Canada or Mexico for it to keep it affordable. I have one client who relies on GoodRx and just goes with the discount.

About the only thing a patient can do is download a plan’s formulary onto a smartphone and take it to a doctor’s appointment. Before the doctor prescribes a new medication, check the formulary to determine if there’s another drug that can be substituted if the doctor’s preferred drug is not on the list.

IBT: Which is better, a stand-alone Part D plan or drug coverage under Medicare Advantage?

Castillo: Generally, Advantage plans cover more drugs on average although I wouldn’t necessarily describe them as better. It depends on what you’re looking for and whether your doctors are in a particular network.

IBT: What’s the most important thing you can advise someone?

Castillo: It’s important that if you are going onto Medicare to talk to a professional at least six months out. That will put you on the right track and let you know about surprises along the way. For example, if you make $300,000 a year, you might be very surprised you’re going to pay more for your Medicare. For people who are under a certain level of poverty, there are some advantages that mitigate the costs.

There are a lot of options out there. Most people aren’t aware of what those options are. That’s where someone like me can help.

Dave Castillo is a 23-year veteran of the insurance industry and owner of DaveSurance of Lisle, Illinois. He is licensed in several Midwest states as well as South Carolina and Louisiana. Before going into the insurance business, Castillo was an investigator for the state of Illinois and a Marine gunnery sergeant. He is a graduate of the University of Maryland.