Surviving the Medicare Part D Maze

It’s open enrollment season for many folks, the time of year to make any changes to employee benefits.

But open enrollment isn’t just for employees. It’s also the season for seniors to adjust Medicare options. One of the most complicated set of options to consider is prescription drug coverage.

There are two ways for beneficiaries to obtain insurance coverage for prescription drugs through Medicare: Through a Prescription Drug Plan (typically referred to as “Part D” or PDP) or through a Medicare Advantage plan. The Medicare Prescription Drug Plan, first available January 1, 2006, is a federally subsidized insurance program covering prescription drugs for Medicare beneficiaries. Prescription drug coverage is also available through Medicare Advantage plans, which take the place of traditional Medicare Parts A, B and usually part D. The most common plans are PPOs or HMOs; some include drug coverage, some do not.

When can I get it?

Medicare beneficiaries may enroll in either of these plans during the open enrollment period, which typically runs from mid-October through early December. This year the deadline is Dec. 7. You may also choose not to enroll; both the Part D PDP and Medicare Advantage are completely optional. However, if you do not enroll in a Part D PDP when first eligible, and do not carry creditable coverage elsewhere, you will be subject to a late enrollment penalty on your premiums for life. if you enroll at a later date.

There is no penalty for not enrolling in Medicare Advantage. During the annual open enrollment period, you may switch from original Medicare to a Medicare Advantage plan, or vice versa. You have some extra time to switch back from Medicare Advantage to original Medicare if you wish, between Jan. 1 and Feb. 14. That also gives you a deadline extension to enroll in a Part D drug plan. Be careful when enrolling in a Part D plan if you are covered under Medicare Advantage. If your Medicare Advantage plan includes drug coverage, enrolling in a Part D plan will kick you back to original Medicare.

There is also a special enrollment period available to you for a qualifying event such as moving in or out of a service area, losing your current coverage or getting new coverage elsewhere, becoming eligible for additional assistance such as PACE for example. This year there is special relief available for those affected by Hurricane Sandy by calling 1-800-MEDICARE to request a later deadline.

If you already have a plan and are happy with it, there’s no need to do anything. Your current plan will roll over into next year.

What are my options?

This is the confusing part. A quick search on using the Stroudsburg zip code brings up 38 different plans to choose from, all with different features and costs, offered by several different insurance companies. Monthly premiums range from $15 to $121; some have zero deductibles, others as high as $325. Copays and coinsurance can be as little as $0 or as much as 50 percent, depending on the classification of the drug. They’re all laid out for you on your computer screen; just enter your current Medicare information and the prescriptions you take into the “find-a-plan” wizard and you’ll know just what to choose, right?

Unfortunately, it’s not that simple. When choosing a plan, you must predict your prescription drug needs for the coming year and try various scenarios to evaluate total costs. The unknown is what makes it challenging. What if you choose your plan based on a current regimen of taking one low cost drug monthly, but then end up on several expensive brand name drugs part way through the year? Your out-of-pocket costs may soar, and if you don’t have the means to absorb that until you have the opportunity to change plans again next year, you’re in trouble.

You might heed the advice given to me by Charlotte Linn of Stroudsburg, who offered a warning for snowbirds to choose a plan that will not only be good for them while in Monroe County, but also for the time spent down south.

Are your pharmacies covered in the network in both places? That’s why Ken Goble of MPC Insurance in East Stroudsburg steers his snowbird clients toward national plans with large networks rather than regional ones. Insurance companies base your cost on where your prescription drug falls on lists referred to as formularies — preferred generic, non-preferred generic, preferred brand, non-preferred brand and specialty. Your prescription may be preferred with one company, and non-preferred with another. National plans, with their strong buying power, also have the advantage of obtaining preferred pricing from drug manufacturers, Goble says.

Aside from evaluating the combination of premiums, copays and deductibles, you will also need to consider the “coverage gap,” better known as the “Donut Hole.” Once your total drug expenses (what the total cost is, not just your cost) reaches $2,970, you enter the donut hole, where you stay until your total out of pocket costs reach $4,750.

However, while you are in the donut hole, you will receive a discount of 52.5 percent off brand name drugs and 21 percent on generics. Also, 100 percent of that cost is counted toward that $4,750 out-of-pocket number, even though you are actually paying less. Once you leave the donut hole, you are considered to be covered by the catastrophic portion of your plan. In this stage, your cost is the greater of either 5 percent of the drug cost or $2.65 for generics and $6.60 for brand name drugs.

Help is available

So how do you choose among such a dizzying array of options? As I mentioned, the site has a find-a-plan feature that allows you to enter a list of drugs and your geographical area, to see what your annual out of pocket costs would be for each available plan. You can edit your drug list and put in various prescriptions you think you may take during the coming year and see how your out of pocket costs are impacted. Even though I’m pretty computer savvy, I find it to be confusing. I can’t imagine how difficult this must be for folks who are not as familiar with technology.

I’ve felt since the first time I worked through the plan choices when Part D first came out, that expecting folks to navigate so many choices — especially those not used to working on a computer — is so wrong. 

Fortunately, you can get help making your choices by working with an insurance agent who specializes in Medicare, and also by working with the volunteers in your community, like the Monroe County Area Agency on Aging. Although it’s too late for this year, the agency’s APPRISE program offers plan comparisons by appointment at the Loder Building in East Stroudsburg. You must call 570-420-3735 for an appointment first.

Once you’ve decided on a plan, you can enroll right on the website, by calling Medicare, or by calling the plan directly. And then pat yourself on the back for surviving the process.

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