Medicare Part D allows people over age 65 to choose from a number of prescription drug plans (PDPs) that offer a set of basic prescription services.
When Can I Join a Medicare Part D Drug Plan?
If you are eligible for Medicare benefits because you are 65 or have a disability, you can enroll in a Medicare Part D drug plan. You can enroll three months before or three months after you turn 65. If you do not enroll during that 6-month period, you may have to pay a penalty in the form of a higher premium.If you have Medicare, you can enroll in a Part D drug plan during the open enrollment period, which typically begins on November 15 and lasts until the end of December. If you have a Part D drug plan already, you can change to a different plan during this enrollment period.
You can enroll in the Part D drug plan at any time without paying a penalty if you have both Medicaid and Medicare, or if your income is below a certain threshold (about $20,000 for an individual or $25,000 for a couple).
Should I Enroll in a Medicare Part D Drug Plan?
There are a number of plans, with a confusing array of plan options, available in each state. This may make it difficult for you to know which plan to choose and whether you will save money on your prescription medications.Premiums for Part D plans range from no cost to more than $75 each month, with most plans falling within the $20 to $40 per month range. The following two examples show how Medicare Part D may or may not help you save money on your prescription medications.
Example 1: Ms. Smith has type 2 diabetes, high blood pressure and depression. She takes three generic medications, namely metformin for her diabetes, enalapril for her high blood pressure, and paroxetine for her depression. She buys these drugs at her local Wal-Mart at a cost of $10 for a 90-day supply of each medication. Her annual cost is $120. The least expensive Medicare drug plan in her state has a premium of $15 per month for an annual cost of $180. A Part D plan may not make sense for Ms. Smith.
Example 2:Mr. Smith has type 2 diabetes, high cholesterol, high blood pressure, and hypogonadism (low testosterone), which can happen in men with type 2 diabetes. He takes four medications, namely metformin for his diabetes, simvastatin for his high cholesterol, Diovan for his high blood pressure, and Androgel for his low testosterone. He buys these drugs at a pharmacy in his local supermarket. Diovan and Androgel are both expensive medications and have no generic version. Mr. Smith’s medications cost him more than $2,000 each year. After paying his monthly premium, deductible, and drug co-pays, he can save as much as $800 each year by joining a Part D drug plan.
How Do I Choose a Part D Drug Plan?
There are approximately 50 different Part D drug plans offered by a number of different health insurance companies in each state. All Part D drug plans must offer a standard set of drug benefits as required by Medicare. Moreover, drug plans may include additional medications on their formularies.The cost to join a plan depends on whether the plan offers benefits beyond those mandated by Medicare. The following may cause the monthly premium to be more expensive:
- The plan covers additional medications on its formulary.
- The plan does not have a deductible at the beginning of the year. The plan covers the cost of medications (usually only generic drugs) during the coverage gap, or “donut hole.”
For example, the state of Massachusetts has 47 Part D drug plans for the year 2008. The least expensive plan, with a premium of $19.40 each month, has an annual deductible of $175 and no drug benefit during the coverage gap. The most expensive plan, with a premium of $111.30 each month, has no annual deductible and pays for generic drugs during the coverage gap.
One of the most helpful online resources is the government’s Medicare site, which allows you to compare PDPs, learn about plans offered in your state, and view each plan’s drug formulary. You can compare plans side-by-side and display only those plans that cover your medications.
Additionally, the site has suggestions for lowering costs in the coverage gap. If you are comfortable using the Internet, you can select and enroll in a plan online. You can get the same information by calling the Medicare help line at 1-800-Medicare.
Where Else Can I Get Help When Choosing a Part D Drug Plan?
Before joining a Part D drug plan, it is important you understand and are comfortable with your choice. Many communities have senior centers with staff that can help guide you through the selection process.If you look for information online, try to avoid sites that are sponsored by insurance companies that provide prescription drug plans. Instead, take a look at the websites of these organizations:
- Medicare Rights Center
The Medicare Rights Center, an independent, non-profit group, is the largest organization in the United States (aside from the federal government) that provides information and assistance for people with Medicare. Its site has a section about Medicare Part D drug coverage, including information about programs that could help you pay for your prescription drug costs. A unique feature of the site is the Medicare Interactive Counselor, a tool that walks you through the process of finding the drug plan that makes sense for you. - SHIPtalk
The State Health Insurance Assistance Program provides one-on-one counseling and assistance to Medicare patients and their families. Select your state and county to find a local organization that will help you. - MedicareSaver
This website provides an easy-to-follow and quick process to help you select a Part D plan. Based on your medications, the site shows you how much you will spend during the year. When you choose a plan, the site will show you how to save money by making some changes in your medications (such changes should first be discussed with your physician).
