According to the Kaiser Family Foundation, a healthcare research organization, monthly Part D premiums can vary by more than 500% within the exact same area for practically identical plans. What's more, out-of-pocket costs for certain types of medication can vary by thousands of dollars, which is why it's vital to go for the plan that suits your needs the best.
“Shopping around for the right Medicare Part D plan is one of the best money saving strategies,” says Mary Johnson, Medicare policy analyst at The Senior Citizens League (TSCL). Unfortunately, though, TSCL's analysis shows that a whopping 80% of Part D enrollees simply do not shop around at all.
People who choose to skip Part D due to having a Medicare Advantage plan still should avoid becoming complacent, since coverage costs vary from one year to the next. That's why you should always take advantage of open enrollment, which runs from October 15 to December 7 each year.
It is vital to review how your current prescription medication plan is going to change in the year that follows, since they often stop covering a particular drug, or even revise the copayment and coinsurance rates.
All of these changes are typically listed in the annual notice of changes (ANOC), which should have been delivered to your home in September. If you can't find it, you can simply ask for another copy or access it online.
You can also use Medicare’s free Find a Plan tool, to get a rundown of the most cost-effective plans offered in your area, based on what you actually need. Johnson notes that spouses should certainly shop separately, saying that "it’s rare for a plan that is right for one of you, based on the drugs you take, to be the best plan for someone else taking different drugs.”
Deductibles and premiums are important of course, but the coverage details for the medication you take can have the biggest impact on the total cost. You'll first need to ensure that what you need is still being covered by your current plan or any other plans that you may be considering switching to.
You will then have to check the pricing tiers, which determine how steep your copay will be. That includes finding out whether your current plan has moved any of your medications to a pricing tier that's less favorable for you.
Medicare Part D plans often have two tiers for generic meds, two tiers for brand name meds, and a final tier for specialty medications. Tier 1 meds are typically the cheapest and increase in cost incrementally until you get to the most expensive ones found in Tier 5. According to the healthcare research firm Avalere, more than 70% of generic drugs were Tier 1, in 2011, while this has moved down to 20% by 2015, which is a shockingly expensive shift.
According to Johnson, in Charlottesville's 2019 plans, the monthly out-of-pocket cost for Novolog Flexpen, a commonly-prescribes diabetes drug, was as little as $37 when it was properly covered, but over than $2,000 when coverage was poor. Similarly, the asthma medication, Advair Diskus ranged between $37 and $1,880, while Lyrica, a painkiller, ranged from $37 to $278.
The changing cost of Medicare Part D's infamous 'donut hole' might also need to be taken into consideration. This is a period of reduced coverage after your overall medication costs exceed a base level for the year. For 2019, this donut hole begins at $3,820, and only when your total out-of-pocket costs amount to $5,100 will you qualify for catastrophic coverage.
On the bright side, 2019's donut hole comes with a copay that's lower than it used to be. While this year you need to pay 35% of the total retail cost for brand name meds, you'll only need to pay 25% next year. For generic drugs, it will be going down from 26% in 2018 to 37% in 2019.
According to Johnson, "for many people, the co-pay they have in the donut hole will be less than what they pay out of the donut hole.” If you haven't shopped around in years, then your donut-hole costs may have significantly changed.
If further help is required when sorting through Plan D options, we'd recommend contacting your local State Health Insurance Assistance Program (SHIP) for some straightforward answers. You can get assistance free of charge either over the phone or at a local regional office. What's more, during open enrollment there are usually workshops and presentations that you can attend which will help you make the best choice for your needs.