Betty Chaffee, PharmD, is owner and sole proprietor of BetterMyMeds, a Medication Management service devoted to helping people get the maximum benefit from their medications.
Medicare began offering prescription drug coverage (known as Medicare Part D) in 2006. Until then, people on Medicare had to pay out-of-pocket for all their prescription drugs. Since its beginning Medicare Part D has had favorable ratings, with beneficiaries finding it easy to use and understand, and generally affordable. Of course, the skyrocketing cost of prescription drugs is adding a new twist to affordability, and that's true for both private and government insurance plans.
Is Medicare Part D required or optional?
Medicare requires new enrollees to sign up for prescription drug coverage within two months of eligibility unless they have coverage from another source. You're expected to sign up even if you don't take prescription medications. There are a couple of reasons for this. First, it ensures that you'll have access to prescription drugs when you need them, and that can't always be anticipated. Second, when everyone participates, risk is shared more evenly, and that keeps healthcare costs down. Delayed signup results in higher monthly premiums -- the longer signup is delayed, the higher the monthly penalty. If you're entering Medicare with no chronic prescription needs, your decision about whether to enroll in Part D may be a hard one. No one wants to pay for coverage they don't need. But the other side of the coin is to wait so long that when you finally need coverage, it's unaffordable. If you find yourself in that position, first, congratulate yourself on being healthy! But second, think carefully about the consequences of late enrollment, and if you decide to wait, reconsider the decision every year.
What costs can I expect with a Medicare Part D plan?
As with all prescription insurance plans, Part D plans have several types of out-of-pocket costs. Along with monthly premiums there may be annual deductibles, and co-pays or co-insurance for each prescription that's filled. Part D plans also have a unique twist known as the "Donut Hole" in which out-of pocket costs can go up significantly. But for those with extremely high-cost prescription needs, there is the "catastrophic coverage" level, where out-of-pocket costs decline to virtually zero after a certain threshold is met.
Be sure to pay attention to the "formulary" that lists which drugs the plan covers. It also groups covered drugs into different levels (tiers) of co-pays or co-insurance, which can significantly affect your out-of-pocket cost.
Out-of-pocket costs and formularies change from year to year. Your needs might change from year to year also, when medications are changed or added. It's important to review insurance plans annually to ensure that you're still getting the coverage that you need.
What about Medication Management benefits?
Medicare Part D plans are required to offer Medication Therapy Management (MTM) services. You must be offered MTM if you certain criteria, including total drug costs and number of chronic diseases and medications. If you're eligible, MTM services may come from your own pharmacist or a central call center. Either way, be sure to take advantage of this important benefit. If you aren't eligible for MTM through your Part D plan, contact us at BetterMyMeds and let us help you get the best health outcomes possible from your medicines!
What companies offer Medicare Part D plans?
Private insurance companies that have met standards created by the Centers for Medicare and Medicaid Services (CMS) can offer Part D prescription drug coverage. There are many companies offering these policies, and they vary from state to state. In addition, the same company may offer several different policies from which to choose. Policies may differ in the price of premiums, deductibles, co-pays and co-insurances, and even which medications are covered. It can be overwhelming to choose, but there's good news. First, you can change policies every year during open enrollment, and with certain insurers changes can be made anytime during the year (more on that later). But second, there's a handy website that can help you make the choice that's right for you based on where you live, what pharmacy you use, and what medications you take.
Choosing a Medicare Part D plan that's right for you
The best place to get started is the Medicare Part D website. Use it when you first enroll, and go back to it every year during open enrollment to compare plans again. It's a user-friendly site, but plan on spending some time with it. Insurance decisions are important and need to be considered carefully.
You can do a general search for a Medicare Part D plan even if you don't have a Medicare number yet. Because Part D plans vary depending on where you live, the search starts with your zip code. The next step is to decide if you want to enter the medications you take. If you don't enter prescription information, you'll still be able to compare general information about plans. But if you do, you'll get a more personalized search that estimates out-of-pocket costs specific to your situation.
The final step is to choose the pharmacies for which you'd like to compare prices. Once you've entered your information, it will bring up all the plans in your area. The nice thing about this website is that it gives pretty specific information about costs and coverages. You can compare annual deductibles, for example, or monthly premiums. What each prescription is likely to cost, as well as total yearly out-of-pocket cost. It allows you to think about whether you'd rather pay a deductible up front, or have a higher monthly premium instead. Would you rather pay a little more to use your favorite pharmacy, or get the lowest overall cost? Do you like one particular insurance company over another? All of that information is there for you to review so you can make the decision that's right for you.
If you already have a Medicare number, you can use this website to further personalize your search. You can also save results and come back to it later, which makes annual review much more convenient.
When can I change my Medicare Part D plan?
In general, prescription drug coverage can be chosen at initial enrollment, and then every year during open enrollment (usually October 15 through December 7). But certain high-quality insurance plans are able to accept transfers at any time during the year. These plans are rated as "5-star" plans by CMS. Part D plans strive to provide high-quality services, and the ability to enroll new members throughout the year is a reward for those most successful in doing so.
Get help if you need it!
If you have questions about how to navigate the Medicare Part D website, or other questions related to Medicare Part D, leave a comment or question right here or contact us at BetterMyMeds. For general information about Medicare Health Insurance, go to our previous article, Understanding Medicare Health Insurance. There are also unbiased professionals who can help you make decisions about all things Medicare. Those living in Michigan can contact the Michigan Medicare/Medicaid Assistance Program for no-cost assistance. Help in other states can be found here.
The annual enrollment period is going on now and lasts until December 7. Don't delay, start your research today!