Medicare Prescription Drug Plans Vary by Hundreds of Dollars Per Year
Let’s face it – No matter how many times experts recommend that we reevaluate our Medicare Part D plan anew each year, many of us don’t! It’s just easier to stick with your current plan.
However, studies (or reports) show that those who take the time to research and switch to the plan that best fits their current needs often lower their out-of-pocket costs as a result of the change. A study estimated that beneficiaries who stay with their current prescription drug plan could pay, on average, a 13% premium increase.
We get it: Comparing plans can be confusing!
We understand why many beneficiaries hesitate to make changes. Reassessing your Part D plan during annual enrollment can be time-consuming and confusing. Keeping your current plan may seem like the road of least resistance. However, doing your homework to ensure your plan is still the best option for meeting your prescription drug needs might save you hundreds of dollars.
First, let’s settle this question: Why compare?
Each year, many of the details for your prescription drug benefit change. Your current plan’s premium, deductible and copayments or coinsurance may rise, while another plan may offer lower premiums or copays. These changes can affect your overall annual costs. And, while the premium may look good, there are other factors to consider before switching or staying with your plan.
In addition to pricing changes, the list of covered drugs (“formulary”) may change too. A drug that is covered one year may not be covered the next. Or, it might be moved to a higher tier, which means it may be more costly for you. If your medication needs have changed over the last year, or if you think you will need to increase or change the medications you are taking to treat one or more chronic conditions, you may want to consider evaluating your plan options.
Four Rules of the Road for Evaluating a Part D Plan
We’ve put together four simple rules below to help you on the road to picking the plan that’s best for you, or you can watch this video to help you along the way!
Rule #1: Lower premiums aren’t always better
- Plans with lower monthly premiums or a $0 deductible may have higher copays and cost you more overall.
- Prepare a list of all your medications to estimate your total costs as you compare plans. Be sure to talk to your doctor about your current medications to see if there might be any generic versions that might help lower your costs.
Rule #2: Make sure your medication is covered
Always check a plan’s formulary to be certain your medications will be covered in the next year. You can also see if the plan has any new rules like quantity limits or prior authorizations that may be required for your medications.
Rule #3: Find a plan with a pharmacy network that suits you
- A pharmacy network is the group of pharmacies you can use to fill your prescriptions — look for a plan with a large pharmacy network that includes both standard and preferred pharmacies. This is important especially if you plan to travel.
- Be sure the plan offers preferred pharmacies that charge lower copays and coinsurance to help lower your costs.
- Many plans also offer a home delivery pharmacy, a service that can provide you additional savings, plus the convenience of having your medication delivered right to your door.
Rule #4: Look for 24/7 pharmacist support
Immediate access to a pharmacist can be very important. Pharmacists can help with questions about drug safety, money-saving drug alternatives, and even offer expert advice for the medications that treat your chronic condition.
Use the Annual Enrollment Period to Your Advantage
Begin your research on October 1 by checking each plan’s website. Call the plan if you need more information or additional plan materials. This is your opportunity to ask questions and make sure you have the right prescription drug plan for the year ahead.
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Here’s what you need to know about Medicare plans
Choosing the right Medicare plan is a big decision, particularly if you won’t have retiree coverage under an employer-sponsored plan. Medicare is complex and can be quite confusing. So making the right choice for your budget and health needs is as important as your decision when to retire. This article will help make it easier to arrive at a decision.
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A higher household income may mean a higher premium
You’ve done your research, enrolled in a Medicare Part D plan, and figured out your monthly premium payment. All set? Maybe not.
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Medicare offers many plan options that can make choosing a plan very complicated. In evaluating these choices, however, there are several very clear objectives to keep in mind that should simplify your decisions.
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The steps to planning for Medicare
U.S. citizens and legal residents who have been in the U.S. for at least 5 consecutive years become eligible for Medicare at age 65, unless they’re disabled. In cases of disability, a citizen or legal resident under 65 qualifies automatically for Medicare Part A and Part B after receiving Social Security or certain Railroad Retirement Board disability benefits for 2 years.*
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What you need to know before you retire
Congratulations, you’re about to turn 65 and become eligible for Medicare! Now what? (more…)
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What to do when your employer drops your Medicare coverage
If you’re 65, retired or retiring and you have employer coverage, your employer pays a portion of your healthcare costs for medical expenses, prescription drugs and other items. You may pay a monthly premium for this coverage. You may also pay a deductible and/or copayment in addition to that premium. Your employer pays the balance of the cost for those services. Your employer also determines the types of plans they make available to you (such as a PPO, HMO, high-deductible HRA, prescription, dental), and they choose the insurers and benefit companies who manage those programs.
However, if your employer is no longer providing retiree health or prescription drug benefits because you’re now Medicare-eligible, consider the many options Medicare offers to help you stay healthy without draining your retirement fund.
Your Medicare Options?
|Medicare Plan||Who Offers It||What’s Covered|
|Part A||Part A is “Original Medicare” and is operated by the government||Hospital care, nursing facilities, nursing home care (not custodial or long-term care), hospice and home health services and inpatient care in a religious nonmedical healthcare institution|
|Part B||Part B is “Original Medicare” and is operated by the government||Medically necessary doctor visits, services and supplies to diagnose and treat a medical or mental health condition, preventative services, ambulance services, and medical equipment (such as canes and blood sugar test strips)|
|Part C||Also known as Medicare Advantage, Part C includes plans offered by private companies that combine Medicare Parts A and B into one plan for greater convenience||Many of these plans also provide prescription drug coverage, and some may also provide coverage for additional services, like hearing, dental and vision|
|Part D Prescription Drug Plan||Offered by insurance companies and private companies approved by Medicare||Prescription medications for beneficiaries eligible for Part A and/or enrolled in Part B|
|Medigap (Medicare Supplement Insurance)||Offered by private companies that help cover some costs not paid by Original Medicare (such as deductibles, coinsurance and copayments)||There are 10 supplemental plans that offer a variety of supplemental options and are labeled A, B, C, D, F, G, K, L, M, and N|
As a Medicare beneficiary, a portion of the cost of your healthcare is paid by Medicare. You will pay monthly premiums, deductibles or copayments/coinsurance, but the amount you pay, and when you pay it, depends on which Medicare plan YOU choose.
Tips for Choosing the Right Route
- Read up on plans: Familiarize yourself with the various parts of Medicare and the options available under them. Your employer or insurance agent/broker may provide an educational kit or refer you to a website that offers videos and other information to help you understand your options. www.medicare.gov is another good resource.
- Make a list: Write down all of the health expenses you’ve had in the past 2 years. This can help determine how much coverage you’ll need next year:
- Prescription medications
- Number of doctor visits (primary care and specialist)
- Number of hospital and emergency room visits
- Lab work
- Medical supplies
- Talk with an agent or broker: Many employers will work with an organization that provides brokers and counselors that help you select the coverage that suits your needs. Talking with a broker will not cost you anything, and it can help you make a decision about which coverage options are best for you. Before you meet with an agent or broker, be sure to read these tips to make the conversation more productive.
- Know your dates: For most people, Medicare Part D (Part D) enrollment takes place during Annual Open Enrollment from October 15 through December 7. You must enroll during this time to have coverage for the following year, and there is no grace period. Mark these dates on your calendar and be sure to start your research early to avoid over-paying or being under-covered. There is a Special Enrollment Period for Medicare members with special circumstances, such as those who move to a different state or lose employer coverage.
You may find that enrolling in Original Medicare combined with a Medicare supplement plan and/or a stand-alone Part D prescription drug plan might be best for you. Enrolling separately allows you to choose a Part D plan with a broader formulary (list of covered medications), a cost-saving pharmacy network with preferred pricing, and/or convenient home delivery.
Or, if you want the convenience of having all your health and possibly your prescription coverage (Medicare Parts A, B and D) bundled into one plan, you can enroll in a Medicare Advantage Plan (Medicare C).
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