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Have You Decided on a Medicare Part D Drug Plan Yet?

drug-plan-finderThe deadline for enrolling in a new Medicare Part D plan is drawing near.  Have you checked what your current drug plan will cover in 2012?  It’s very likely that it has changed …. and not for the better.  You have just a few days to consider your options and make the choice you’ll live with for the next year.

These facts became dramatically clear to me when a friend reported that her husband’s out-of-pocket cost under his current 2011 Medicare Part D plan would more than double in 2012.  Assuming his prescriptions remain the same, they would be paying $2991 instead of the $1140 they paid in 2011.  Last month when his current plan’s Notice of Change came in the mail, my friend and her husband noted the premium’s change from $52 to $62. At first, they accepted this as reasonable.  After all, they were happy with the plan.  It satisfied his needs and the network pharmacies were convenient.  Moreover, the plan hadn’t changed in the 3 years that he had coverage.  Luckily, however,  an online newsletter called my friend’s attention to the big changes many drug plans were making to their formularies, the listing of the drugs each plan covers.

The Medicare Part D drug plan finder web site is a relatively easy place to check and compare drug plans and their formularies; and that is where my friend and her husband went to determine if his drug plan still worked for them.  As directed by the plan finder, they entered his Medicare information, his current medications, and their zip code.  The site first presented them with their current drug plan and then all the other drug plans offered in their area.  Each plan’s premiums, deductibles, and the cost of the drugs that had been entered by my friend and her husband were listed along with a customer satisfaction rating.

With the plan finder, they were able to make a side-by-side comparison between the current drug plan and the other plans available.  They discovered that, not only was the premium of the current drug plan higher than the other plans, the drugs most needed were no longer listed in the plan’s formulary.  As a result, they were able to find a much cheaper plan with the same participating pharmacies and a higher rating than the current drug plan.  Next year, my friend’s husband’s drug costs, given the same medications, should total $664.80.  This is almost half of what they paid this year and four and a half times less than what they would have paid if they had stayed with the same plan!

Seniors with Medicare Part D coverage have until midnight, December 7 to make sure they’re covered by the best possible drug plan.   In making that choice it’s important to not to focus solely on a plan’s monthly premium.  Each drug insurance plan has a different drug cost structure and the premium is just one part of the costs involved.    Independently of each other, insurance companies negotiate with drug manufacturers for discounts on drugs deemed effective in treating given problem areas.  These are then labeled as “preferred” drugs.  Both brand-name and generic drugs are designated by each plan as “preferred” or “non-preferred” and assigned a 1-6 tier level according to cost.  All drugs covered are listed  in alphabet order in each plan’s Drug Formulary.  No plan covers all 2,300 of Medicare-approved drugs.  Of these, 80% is the most any plan covers and some cover less than half of the total.  This being the case, the best plan will be different from person to person depending on their drug needs; and unless the necessary drugs are covered in the top tiers,  the plan with the cheapest premium may end up the most expensive.

Another important factor in choosing a good drug plan is the deductible.  Over half of the plans require that beneficiaries pay a specific out-of-pocket amount ($320 is the maximum deductible allowed) before plan coverage kicks in.  However, the Medicare plan finder lays out the estimated costs month by month making it relatively easy to judge the effect of  a deductible on the total cost.

For many, the location of convenient network pharmacies is another important element in their decision making.   For this, the Medicare drug plan finder web site lists each plan’s participating pharmacies.

People whose drug costs, during the year, exceed $2930 fall into the Medicare Part D coverage gap which is another factor to consider.  Normally, they are expected to cover their own drug costs until those costs reach $6658, after which coverage is resumed.   A few plans offer a degree of coverage for people in the gap; and this may provide some relief assuming other costs in the plan aren’t a lot higher.  Starting in 2012, brand name drugs in the gap will be discounted by 50% and generics by 14%  so gap coverage is becoming less of an issue.

If people take no action, they will be automatically re-enrolled in their old plan for the next year.  This year’s deadline for enrolling in a different plan has been accelerated from December 31 to December 7th so that drug companies have more time to process new enrollees before January 1 when the 2012 plans take effect.  Unfortunately, that change, coupled with the greater-than-usual plan changes, makes it more probable that people will be left unhappy with their Medicare Plan D drug plan.

 

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