3 Important Ways to Compare Medicare Part D Plans
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You can use the Medicare Plan Finder to help you in your search. When you click on the name of any plan on the main list of results, the next page you see on-screen contains the details of your costs under that plan.
It comprises a wealth of information — premium, deductible, what you’ll pay in this plan over the whole year for the drugs you’ve entered, whether you’ll fall into the doughnut hole, which pricing tier your drugs are in, whether you need to go through any hoops to get your drugs, and so on.
Most of this information is self-evident and available pretty much at a glance. But, learn you how to dig deeper to make the most of certain important bits of information that may not be immediately clear: how to read the bar charts that show your total costs each month through the year, how you may be able to lower those costs, and how to find pharmacies that give the best deal on your meds.
You may see items on the plan finder that require more-detailed explanations — for example, restrictions on certain drugs (prior authorization, quantity limits, or step therapy), the different tier pricing systems of co-pays among plans, and navigating the doughnut hole. Consider these topics in the context of the finer points of Medicare coverage and how to get the most out of your benefits.
Find out your month-by-month Medicare costs
Part D is weirdly constructed so that you may pay different amounts at different times of the year according to the coverage phase you’re in. Well, the bar graph that appears on each plan’s details page shows you at a glance how much you can expect to pay month by month throughout the year in this plan according to the information you’ve entered.
If you join Part D partway through the year, a second graph shows the monthly payments for the rest of the year. It’s a very cool tool personalized to your own costs.
Getting this month-by-month information in any other way is difficult. If you call a plan to find out what it charges for your drug(s), the customer service rep typically tells you the co-pay charged during the initial coverage period but ignores what you’d pay during the deductible phase or the doughnut hole.
What you see in the bar graph is a profile of your out-of-pocket costs (premiums plus co-pays) determined by the drug information you’ve entered, the plan’s charges, and the way the plan is structured. That’s why the profile for each plan is different even though the drugs are the same. For example:
If the plan has no deductible and your drug costs aren’t high enough to reach the doughnut hole, your payments for each month, January through December, will be the same.
If the plan has a deductible and your costs are high enough to reach the doughnut hole, you see a U-shaped profile that shows a higher amount at the beginning of the year (because you’re paying full price until the deductible is met), followed by lower flat payments (initial coverage phase) for some months, followed by higher payments (doughnut hole) for the rest of the year.
If you take very expensive drugs or a lot of drugs, you see a profile that is very high at the beginning of the year (because you’d go through the deductible, initial coverage and doughnut hole phases very quickly, maybe even in a single month) but then dwindles to the same flat monthly payment — catastrophic coverage — for the rest of the year.
Lower your drug costs
You can dramatically reduce your costs if any of the brand-name drugs you now take has a generic version or a similar, older alternative that your doctor thinks would work as well for your medical condition. But here is how the plan finder can show you which alternatives are available and what they’d cost.
When you first log onto the plan finder and enter the name of a brand-name drug, you’re invited to switch to the generic version (if one exists) immediately.
This juncture isn’t the right time to make any switch because the names of the drugs you’re entering are those your doctor has prescribed; you’d be better off finding out the prices of those drugs before looking to see whether any lower-cost alternatives exist. That way, you know how much you’d save if you switched to the alternatives.
So if you’ve entered a brand-name drug and a notice appears informing you of a generic version, click on the button that ensures your prescribed brand name will be used in your plan search. Otherwise, the plan finder will automatically use the generic by default, and the results will reflect the costs for that drug and not the one your doctor prescribed.
A much better way to identify lower-cost options is to wait until you get to the details page of any Part D plan you’re interested in. At the bottom of the section headed “Estimated Annual Drug Costs,” click on the link labeled “Lower your drug costs.” (This link is in tiny type, so it’s easy to overlook.) You now see your drug list, with the following options:
If a generic alternative to any of your drugs is available, click on the link to see how much it would cost compared to your prescribed drug in this particular plan.
If a similar drug is available, click on the link to see how much this one would cost compared to your prescribed drug in this particular plan.
If the manufacturer that makes any of your drugs offers a patient assistance program that may help you pay for it, click on the “Yes” link. The page that appears describes the program and tells you how to apply.
To find out whether your state has a pharmacy assistance program that helps people with low incomes afford their drugs, click on the link provided.
Note that savings made by switching to generic or similar drugs vary from plan to plan, so if you want to compare plans for this reason, you need to repeat this process for each plan.
If you find you’ll save money by switching to another drug, now is the time to ask your doctor whether that drug would work well for you — and, if so, to get a new prescription for the lower-cost drug.
Examine retail pharmacy choices
When you’re enrolled in a Part D plan, you must go to one of the pharmacies within its network to ensure you pay the price you expect. Also, within their networks, some plans have preferred pharmacies, which dispense prescriptions for lower co-pays than at regular network pharmacies.
For example, you may pay a $10 co-pay for your generic drug at a plan’s network pharmacy but $5 if you go to one of its preferred pharmacies. Therefore, knowing whether the prices you’re being quoted on-screen on the plan finder are the best you can get is very important.
The plan finder requires you to select one or two local retail pharmacies very early — immediately after entering the names of your drugs. This requirement isn’t at all user-friendly. Here’s why:
At this stage, you can’t tell which pharmacies among those presented on-screen are in which plans’ networks, or even whether they’re in any plan’s network.
You also can’t determine which pharmacies are preferred by which plans.
You must select at least one pharmacy, even if you aren’t familiar with any of the options, so your selection may well be completely random and not tailored to your situation. And yet that selection will determine the out-of-pocket costs quoted for each plan.
This work-around is a real pain, isn’t it? But Medicare officials say they can’t create a better system for pharmacy selection without overhauling the whole plan finder. Perhaps they will one day. Meanwhile, you may be looking for a quicker way of finding out which plans use preferred pharmacies in your area.
You can try calling the plans; the plan finder provides each plan’s contact information for both existing members and nonmembers. Or you can call around to the pharmacies in your area. They’ll tell you which Part D plans’ networks they’re in and whether their status is network or preferred.