One of the timeless ways to save money is to comparison shop, and switching to a Medicare Part D plan that costs the least amount of money would be a great way to save. But yet, only about seven percent of seniors who enroll in Medicare Part D changes plans each year, according to the Centers for Medicare and Medicaid Services.
And it’s not due to the lack of need either. Walgreens conducted a survey and found that 37 percent of the participants worry about their prescription drug costs and one in five had to delay filling a prescription or skip doses just to manage medication costs.
The real culprit is fear of the unknown. Many seniors are simply confused by the complexity of these drug coverage plans. They are also worried about the potential repercussions of changing coverage, especially when the consequences could be not having the drugs they need to take until everything is sorted out. That’s why the details of what to look for when comparing Medicare Part D plans is the first thing I want to write about when Walgreens contacted me to cover Medicare Part D here on MoneyNing.com.
Here’s what I found someone shopping for a Medicare Part D plan will need to know in order to find the best plan for them.
Know the four basic costs of Medicare Part D. Most people are familiar with monthly premiums, co-payments and deductibles (the out-of-pocket costs for covered medications before the Part D plan starts paying), but Part D costs include a coverage gap as well, or commonly referred to as the “donut hole”.
Basically, there exists a gap in coverage where you will be paying 50% of the costs of brand name drugs and 79% of generics regardless of your plan’s co-payment when your annual spending reaches a certain level (in 2003, it’s from $2970 to $4,750). The Affordable Care Act is aimed to slowly reduce this gap until it’s eliminated between now and 2020. But until then, take note of this in your calculations.
Know how the formulary affects you. Each plan covers different drugs and they issue that list known as a formulary. Obviously, pick the plan that covers the drugs you take regularly. Make sure you look for the co-payment amounts for each drug too. Each plan cover drugs in tiers with different co-payment amounts. It’s not uncommon to see a drug in one plan be in one tier while the same drug in another plan be in a completely different tier with a much reduced co-pay. Note also that a plan can change its formulary at any time as well, so don’t have the set-it-and-forget-it attitude when it comes to picking the best plan for you.
Where you get your drug matters too. If your Part D plan lists a preferred network pharmacy, you could be saving as much as 75% on prescription co-pays. This is often a forgotten part of the equation, as Walgreens found that only 21% of its survey respondents switched to a pharmacy within their plan’s preferred network to save money, and 24% were not even aware that their plan offers a preferred pharmacy option!
Know the plan’s stance on brand-name drugs and other expensive medications. Some plans require the pharmacy to substitute a brand-name drug with a generic one unless you get an exception from the plan, while some plans may restrict the number of doses in each prescription. Other plans have a step therapy requirement, where they will require the doctor to prescribe the least expensive drug in its class for you to try before they will approve the use of a more expensive drug. If you are adamant about sticking to brand-name drugs, or you are already taking expensive medication, you will want to make sure all the ducks are lined up before you switch plans.
It’s easy to see how a comprehensive comparison can get complicated fairly quickly. Luckily, the government run website, Medicare.gov, offers a very good medicare plan finder that will help you find the right Part D plan for you, including a way for you to enter all your prescription drugs for easy comparison.
Give the tool a spin and make preparations to start saving today.
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