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

  1. 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.
  2. 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.

4 responses to Picking a Medicare Part D Drug Plan Is Not as Confusing as They Say

  1. Unfortunately, for the large percentage of Medicare beneficiaries who take multiple maintenance drugs for chronic conditions, Medicare D can be very confusing. Well, maybe confusing isn’t really the right word. Maybe it’s more like aggravating. And this is because it is often difficult and time-consuming for people with chronic conditions to find a plan that covers all of their drugs on the formulary. Throw in benefit structures like deductibles, coverage limitations, preferred and non-preferred drugs, retail and mail-order pricing, etc., and that’s a lot to consider when selecting a plan. Not to mention the star ratings — try finding everything you want or need in a plan AND find a plan that has at least 3 or 4 stars! For the savvy computer user, it’s fairly simple to narrow down choices using tools like Medicare’s Plan Finder. But admit it, if you don’t have access to this type of tool, Med D can be confusing — and aggravating!

  2. Thanks for the comment but no, that is not my experience. I think your description is an example of how many people over-complicate the Part D program for us seniors… and are possibly purposely trying to scare seniors concerning Part D for some unknown reason. (It’s not working… Part D is one of the most popular government programs in the last 50 years.)

    I think your facts are wrong in addition.

    1. There is not a large percentage of Medicare beneficiaries in the situation you describe: “multiple maintenance drugs for chronic conditions.” (I’ll give you that statement if by “multiple,” you mean two or three scripts and by “chronic condition” you mean HBP and/or raised but not high cholesterol. If that is what you mean — it’s very common — eight out of 10 such seniors will most likely be prescribed something like atenolol and/or lisinoprol and a statin and can go to Target or Walmart or Stop and Shop and do not even need to use their Part D card. But they should get a cheap Part D plan anyways purely as insurance and to avoid the penalty.)

    2. Furthermore, we seniors did not just fall off the turnip truck. We have dealt with insurance with deductibles and co-pays. and buying things mail order, and choosing among different brands of products and services for 45-50 years. What makes you think we are no longer capable of doing that? This common meme that seniors can’t handle Part D is insulting.

    3. Personally I would ignore the stars-rating system for now. Maybe in a few years it’ll mean something. The way the rating is done is methodologically flawed, and even if that were not true the ratings have not been around long enough to mean anything. All the plans are approved by CMS so who cares that some are rated 3.5 stars and some 4 stars.

    That being said, the choices are complicated for a minority as opposed to “a large percentage of” us seniors. I split the world 5%-90%-5% in my initial blog post to keep it simple and to line up with the way the plans are structured in Massachusetts. You could look at from a different perspective also, splitting up my 90% even more (this is just a SWAG; I do not have exact statistics for this):

    – the 5% mentioned in my initial post that take no drugs
    – 60% in the category I described above (not always HBP and chlorestorol but some combo of two related and manageable chronic condition treated by low-cost generics)
    – 30% with a more complex need, typically either a condition like the above that cannot be managed by a low-cost generic or multiple combo chronic conditions that can be managed by low-cost generics and one high-priced drug
    – the 5% I mentioned with expensive needs handled as in my initial post

    It is those in the 30% category that need the most help. Guess what: they figure out what drug plan to use the same way they treat their condition. They ask for help.

    One final note: the way Part D was set up by the Congress/CMS initially in 2005-2006 (and the way it still works despite current proposals to change it), poor seniors get their Part D insurance free, are not subject to the donut hole, can change their Part D plan monthly if their scripts change and a new drug is not on their current plan’s formulary, and they get very low co-pays. In Massachusetts, most of these same benefits are available to middle-class seniors taking in retirement income up to $70,000 a year as a couple through a state assistance program called Prescription Advantage.

    So, no I do not agree with you.

    • I was in no mean trying to insult you — I work with seniors every day so I apologize if I came off sounding that way. I know that many people, especially those who are just aging into Medicare, are perfectly capable of dealing with Part D and do not find it confusing at all. And I do believe it is a great program that is helping so many people–I hope it’s still around when I become eligible!

      However, based on my experience working for one of the largest national Part D plans in this US since 2005 (we started in 2005 to get ready for the 2006 inaugeration), I do have proof to back up what I said. One of my jobs is to listen in on our customer service reps during the Open Enrollment season, when hundreds of people call each day to get information about our plans and enroll. Some of these calls go on for a half hour or more because many people have questions or do not understand how the plan works. In addition, a large percentage of our members–especially the Dual Eligibles who get both Medicare and Medicaid–have chronic conditions such as diabetes and high blood pressure and are taking multiple medications. I can hear the frustration in their voices as they read through all the drugs they are taking to make sure they are all on the plan’s formulary. (We have some members who are taking up to 30 medications!) The dual eligibles often get bounced out of their plans each year–if the monthly premium for the plan they are in does not meet the bid amount that Medicare sets each year, Medicare automatically disenrolls the dual eligibles and sends them to another plan with lower premiums. Talk about frustrating, getting kicked out of your plan year after year.

      And regarding the star ratings, yes, please, you do need to pay attention to these, especially if you are in a plan that has a low rating. This year, Medicare is sending letters to everyone in plans that received a star rating less than 3, telling them they must select a plan with a higher rating for 2013. That’s because these low-rated plans are going to be shut down by Medicare: Low star ratings represent poor clinical outcomes, poor customer service, and high rates of nonadherence to medications. I know what goes into the star ratings and how hard it is for a plan to achieve a high rating — they are more important than you may think. You may want to read what I’ve written about the star ratings to see whan I mean: http://themeddiva.com/category/medicare-star-ratings/

  3. P Gavan

    Thanks for the response and clarifications. Please note my initial paragraph that the original post was written for one part of Massachusetts but I think it applies all over Massachusetts and to a lesser extent nationwide.

    I am not contending that Part D is not confusing for some, only

    (1.) that it is not confusing for “a large percentage” as you claimed in your comment and

    (2) it is not as confusing as “they say,” which is what my original post was about (I apologize if I implied that you were part of “they;” not my intention)

    If you can correct my estimates of
    – 5%-no-drugs
    – 60%-minimal-drugs (mostly generics)
    – 30%-some-compexity
    – 5% expensive (and usually complex),
    please do so. It would be good information to have.

    But dual eligibles are both a small percentage of the totals and they should be getting free Part D insurance and nominal co-pays anyways. They can switch anytime (and every month) if they picked the wrong plan. Ditto for quite a few seniors nationwide who are not dual eligible but get SS/Extra Help. And here in Massachusetts (and in 21 other states) we have an SPAP. Under our SPAP, almost every senior qualifies and it lets people change plans once a year (not every month as with dual eligibles and SS/Extra Help but still it makes the risk of a bad Part D decision pretty small).

    One other important statistic to keep in mind is that Part D only applies to about 30% of Medicare beneficiaries. The rest have VA, or employer retiree insurance, or are on Part C (where they have no choice but to pick the Part C insurer’s Part D)

    We can agree to disagree on the star ratings system. I hope it turns out that way. Only one plan here in Massachusetts has the problem you describe and no one picks it.

    Finally, as I said above, primarily my original post was to convince people that Part D is not as confusing as “they” say.

    Thanks again for the dialog.

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