Choosing a Medicare Part D Prescription Plan

“Hey Tim, this guy wants to talk to us about the whole donut thing again. I’m going to just tell him we take vitamins”

Finding the right prescription coverage can be a daunting process. Depending on where you live, there can be over a few dozen choices.  Here in RI, there are over 30 stand-alone Part D drug plans to choose from. 

Medicare Supplemental plans cover some or all costs not covered by Parts A (hospital) and Part B (doctor/outpatient).  A standalone Part D prescription plan is required to cover Medications. 

Many Medicare Advantage Plans have Part D prescription plans bundled into a single plan. These plans are usually labeled MAPD (for Medicare Advantage + Prescription Drug). 

How do I choose a Part D plan?

The first place to check is Medicare.gov

There is a plan finder tool under the “Drug Coverage (Part D)” Tab.  This web tool allows you to put in your zip code, choose your preferred pharmacy, and enter your medications. 

The plan finder will then give you a list of available options in your area and how much you can expect your current medication regiment to cost. 

 

What if I don’t take any Medications?

It’s still recommended to enroll in a Part D plan so you have prescription coverage.

If you do not have prescription coverage and you do not sign up for Part D, you may be penalized 1% of the national average cost of a Part D plan ($32.42 in 2014) for every month you were not covered.  This is added onto your premium each month permanently when you do enroll (Source: medicare.gov)

 

I have coverage through an employer drug plan or Tricare, do I still need a Part D plan?

You’ll need to check with your human resources department to see if your current drug coverage is considered “credible coverage.”  If yes, then you will not be penalized for not signing up for a Part D plan. 

However, it would be wise to compare benefits to see if you would get better coverage under a standalone Part D plan.

 

What if I’m unhappy with the plan that I chose?

You can switch plans every year between October 15 – December 7 for coverage starting the following January.  This is called the annual election period or open enrollment period.

 

What’s the coverage gap or the donut hole?

This is a concept that confuses a lot of individuals (and agents). 

The “donut hole” basically says:

Once the full cost of your medications goes over a certain amount ($2,850 for 2014), you go from paying set co-pays to paying 47.5% the full price of your brand name medications and 72% the full price of generics.  (Source: medicare.gov)

Once your out of pocket costs goes over $4,550 (your deductibles, co-pays, and co-insurances in the coverage gap from January 1st), you go into catastrophic coverage which pays for 95% of prescriptions while you pay 5%. 

 

The coverage gap resets January 1st of each year.

Almost all Part D plans, regardless of whether they are standalone or part of Advantage plans, have the coverage gap. 

 

Recap

When you enroll in a Medicare prescription plan, make sure to check the following:

1.     All your medications are covered in the formulary (formularies can be different even if two plans are from the same company)

2.     Your co-pays and deductibles are acceptable to you financially

3.     You will have access to a pharmacy that’s convenient for you

Remember, once you enroll in a Part D plan, you’re not locked in for life.  You can choose to switch at least every single year.