This year, a relative of mine had two issues that affected her prescription plan. First, she was diagnosed with an illness and prescribed new drugs. Second, she forgot to pay her Medicare Part D premiums and lost her prescription coverage. How do you choose a Medicare Part D plan? How do changes in medication affect the Part D insurance plan a participant might choose?
Medicare Part D is the health insurance that covers prescription medication for outpatient drugs. Part D is a fairly recent addition to the Medicare Alphabet, having been added in 2006. This plan seems incredibly confusing, and it can require some research to determine the best plan for each individual.
Medicare Part D is a federally subsidized drug benefit. The participants will pay a monthly premium to an insurance company that has contracted with the government. In 2015, the average premium is around $33.15 per month. After a participant has paid the deductible $320.00, the participant will pay 25% of the cost of the drugs until the total cost of the prescription drugs has reached $2960. The federal government pays $2,220 of this amount and the participant will pay $760.
But how to choose a Medicare Part D plan? Medicare has a pretty powerful program online that can help you make the decision. Go to www.medicare.gov/find-a-plan. It will ask you to enter the zip code of the participant, and then will ask for all of the medications the participant is taking, the dosage of the medications, and the number of pills purchased each time. It will also ask for the pharmacy where the participant usually purchases the drugs. Once all of that information is entered into the find-a-plan site, the site will spit out a list of plans with comparative information including the cost of premiums, the annual drug deductible, the estimated annual drug costs, and the rating of the plan based on 3 out of 5 stars assigned by Medicare. Medicare sometimes assigns a 5-star rating for a Part D insurance plan that will be indicated by a yellow star with a 5 in the middle next to the Medicare Part D plan. Once you have entered all of the information, you can compare the costs of the various plans. Of course, the information is only valid if all of the drugs in the correct dosages are entered into the system. Be sure to check to see whether the cost of the drugs will go up during the year. Usually, the cost of the prescription drugs goes down once the deductible is met, and goes up again when the participant hits the donut hole at $2960.
The participant will have to go to a pharmacy in the plan’s network in order to get the lower price you expect to pay.
Not everyone needs a Medicare Part D plan. Some retirees may have coverage under their retirement plans, veterans who qualify for free or reduced price medications may not need the coverage. That is called “creditable coverage.” If you do need it, though, and don’t sign up for it when eligible, you will be charged a penalty when you do finally sign up. The penalty is at least 1% for every month you delay enrolling past the Initial Enrollment Period.