9 Things to Know When Comparing Medicare Part D Plans - dummies

9 Things to Know When Comparing Medicare Part D Plans

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Will you avoid Medicare Part D buyer’s remorse? Comparing Medicare Part D plans carefully is definitely worthwhile! Doing so tells you the following:

  • Which two or three plans cover all your prescription drugs but cost you the least out of pocket over the whole year: Identifying these choices immediately whittles down that huge list of 25 or more available plans to a manageable few.

  • Which of these plans has the best record for customer satisfaction and quality service and which if any has a poor record.

  • Which of these plans has the fewest or no restrictions for your specific drugs: There are different kinds of restrictions — known as prior authorization, quantity limits, or step therapy.

  • Which of these plans has the most reasonable co-pay structure in case you need other meds later in the year: Co-pay structure refers to the different amounts you pay in each tier of charges. For example, Plan X may charge a co-pay of $70 for all of its nonpreferred brands, whereas Plan Y may charge more than $100 for drugs in its own nonpreferred brand tier.

  • Whether you’ll fall into the doughnut hole (also known as the coverage gap) with the set of drugs you take now: If so, in which month of the year will that happen? And will it occur later under one plan than another?

  • Which of these plans have network pharmacies convenient to you.

  • Which of these plans have a mail-order option, if you want one.

  • Which of these plans have arrangements with certain pharmacies (known as preferred pharmacies) that will save the most money on your meds.

  • Which of these plans will allow you to fill your prescriptions in any state if you travel or live away from home for part of the year.

This list is a whole lot of critical information. And the only really effective way of getting it is to use the online Medicare plan finder program — or get someone else to use it for you. This tool is also the safest way of choosing a Part D plan because when you do the comparison, you stay in control.

You can’t fall for a sweet sales pitch or, worse, fall prey to a scam or hard sell from some unscrupulous person who exploits your uncertainty for personal gain.

Not realizing how much more you’d pay for the same drug in some plans than others is one sure way of making an unfortunate choice. Here are a few examples of how comparing plans carefully can save you money — and how failing to do so can teach you a hard lesson.

  • Going by a well-known name: Back in November 2005, a few weeks before Part D started, Bill signed up with a plan. When asked how he’d chosen it, he replied he’d picked an insurer whose name he knew and felt he could trust.

    It took about 15 minutes to run the information for his six meds through the online Medicare plan finder. The least expensive plan — also provided by a well-known insurer — turned out to cost about $1,000 a year less than the one he’d chosen.

    Because he was still within the open enrollment period, he was able to switch plans. Every year until his death in 2010, he ran the numbers. And every year the plan that worked best for him was different from the plan he’d had the year before.

  • Choosing the same plan as your spouse: Before he retired, Joel had health insurance from his company that covered drugs for both him and his wife, Mae. When he needed Part D, Joel left it to Mae to pick a Part D plan for both of them because she took a lot of drugs and he rarely took any, and they felt more comfortable being in the same plan.

    So Mae chose Plan X, which covered all her drugs for a monthly premium of $61, and signed them both up. That was fine for Mae, but Joel was actually wasting money. Because he almost never needed drugs, he’d have been better off on Plan Y, which had a premium of $15 (the lowest in their state) and would’ve saved him $46 a month or $552 over the course of the year.

  • Failing to research a sales pitch: Joanne was in the mall buying gifts for her grandkids when a sales rep invited her to sit down, have a cup of coffee, and talk about Part D. Joanne already had a drug plan and wasn’t thinking of changing it, but she was happy to take a load off and listen for a few minutes.

    Yet what the rep said about Plan X sounded like a better deal than Joanne’s current plan, so she signed up on the spot. What she didn’t know was that for her set of drugs (two brand names and two generics), Plan X ranked 27th highest in expense out of the 37 plans in her state.

    If she’d compared plans according to the drugs she took instead of listening to a sales pitch, she’d have found Plan Y. This plan had higher premiums than Plan X but charged far lower co-pays for her drugs. So over the course of the year, Joanne paid about $1,200 more under Plan X than she would’ve paid under Plan Y.