Will You Avoid Medicare Part D Buyer's Remorse? - dummies

Will You Avoid Medicare Part D Buyer’s Remorse?

By Patricia Barry

Copyright © 2015 AARP. All rights reserved.

Not realizing how much more you’d pay for the same drug in some Medicare 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, an old friend named Bill said he’d signed up with a plan. Well, 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, 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.