Picking a Medicare Part D Drug Plan Is Not as Confusing as They Say
November 18, 2012 in Medicare
(The following information applies to Cape Cod, Massachusetts where I live but — with different numbers — the same is true around Massachusetts and most of the United States:)
Despite the ranting of some and overhype by the press, Medicare Part D drug choices are just not as complicated as you may have heard. But seniors do need to do some research on ther past usage and spending first and narrow down what kind of drug coverage they are looking for, based on their circumstances. There are about 30 standalone plans on Cape Cod available to seniors who don’t otherwise get their drug coverage through a current or former employer, a spouse’s current or former employer, the VA, or through a Part C Medicare Advantage plan. But these 30 plans break down into just three categories that align with three typical senior-citizen/Medicare-beneficiary situations:
About 5% of us don’t take drugs — Two of the Cape Cod plans cost under $20 a month and have a $325 deductible. One or the other of these plans will make sense as pure insurance for someone on Medicare who takes no prescriptions currently and thinks they won’t during 2013. These two plans are true insurance, protecting you on the high side against something you cannot predict, and like all insurance, deciding on a deductible is a bet. So remember
- You’ll pay as much as $325 first if you end up taking some drugs during 2013 (e.g., decide to get cataract surgery or a knee replacement) before the insurance starts paying any of it.
- On the other hand, you’ll save about $200 versus what you would spend if you opt for a more expensive plan with no deductible and use no drugs (or like many of us, buy our generic drugs at a big-box-store pharmacy without using our Part D plan).
- About 90% of us don’t take expensive drugs – There are 15 or so plans on Cape Cod priced around $30 a month plus or minus a few bucks. These are the plans most of us seniors will use. Some of these plans have deductibles but low co-pays after you meet the deductible. Others have no deductible but higher co-pays. In other words, the choices work just like any other insurance you’ve ever bought. If you only take a few drugs, you can probably make the comparison in your head but there is also a Medicare Plan Finder on medicare.gov to see if you’re right. Supposedly such exercises are good for our senior minds.
- About 5% of us seniors unfortunately need expensive medications — A dozen or so standalone Part D Medicare prescription drug plans on Cape Cod range from $50 to over $100 a month. Most of these provide some protection in the so-called “donut hole” so this third group of plans is basically for those with high prescription drug costs, even for those nearing donut-hole-level spending, which is just under under $3000 at retail in 2013 (meaning the senior would pay about $750 out of his or her own pocket on average before reaching the donut hole). But here’s the good news: more than 90% of us seniors never come anywhere near falling into the “donut hole.” Obviously if you are part of that 5% that do fall into the hole, this statistic is no consolation. But remember poor senior citizens are never affected by the donut hole anywhere in the U.S. and — in Massachusetts — there is a very good program for middle-class seniors called Prescription Advantage that can probably help with the expense. Look into it if you are part of this third group of seniors.
Whichever of the above three categories you fall into, you need to make sure that your drugs are covered by the plan you like. Ask to see its Formulary, which will be mailed to you or you can look up on the web.
And you need to understand that some plans are better in some drugstores and others are better in other drugstores. That is the feature of Part D Medicare prescription drug plans that causes the most confusion. Check with your drugstore – if you have a preferred druggist – to see what plan he or she works best with.
By the way these choices and competition among manufacturers, distributors and retailers is the reason that these standalone drug plans are costing us seniors and the Federal government 40% less than originally estimated. Name another Federal program that you can say that about.