This is the time of year to review your Medicare Part D (prescription drug) choices for 2015. Any changes in your prescription drugs during 2014 or in plan formularies means your 2014 plan may not make sense in 2015. The right decision can save you money and aggravation.
The Medicare Part D open enrollment period that begins on October 15th impacts Medicare participants who have “original Medicare” which includes Part A (hospital insurance) and Part B (medical insurance covering doctor and other health care costs). In order to secure prescription drug coverage you must elect Part D.
Some participants may have enrolled in a MedicareAdvantage Plan (MA Plan). These plans are offered by private insurance companies and combine Parts A, B and usually Part D. If prescription drug coverage is included in the MA plan (called a MA-PD plan), the Medicare Advantage participant need not elect separate coverage.
Critical: Persons who have enrolled in a Medicare Advantage Plan with no prescription drug coverage are able to enroll in a standalone Part D plan only if they participate in a PFFS (Private Fee For Service) type MA plan or in a MSA (Medical Savings Account) type MA plan. Be very careful if you are a participant in an HMO, PPO, or Special Needs Plan (SNP) type MA plan. In these plans, the participant must receive his or her prescription drug coverage from the plan. Enrolling in a standalone Part D plan will result in your being dropped from their MA plan and returned to original Medicare. Not only will they inadvertently lose their preferred type of coverage but if they are unable to purchase a Medigap plan, the change can result in their paying out-of-pocket health care costs.
Medications Make the Difference
During the open enrollment period, you may select a new prescription drug plan. If you enroll in a new plan for 2015, you will be automatically disenrolled from your 2014 plan as of January 1, 2015. Part D plans are offered by private insurance companies. To make the change, there is no medical underwriting (you are not asked health questions). If you wish to remain in your current plan, you need do nothing.
Unfortunately, many Medicare participants focus too much on the monthly premium in making their decision. Often the plan with the lowest monthly premium is selected even though the overall cost of the plan is much higher than other available plans. It is the total cost of the plan that you should focus on - including the premium, the deductible, co-payments and any payments made in the infamous “doughnut hole” (or gap in which the participant must pay 100% of his or her drug costs). The total cost of the plan is driven primarily by the prescription drug regimen. Which Part D plan is least expensive in terms of the total annual cost differs from person to person.
Fortunately, the Medicare website will do the total cost analysis for you.
Go to: www.medicare.gov
Once on the landing page, click on Drug Coverage (Part D)
located near the top of the page; from the drop down menu select Find health & drug plans
. A general search of available plans can be done by the entering your Zip Code and clicking on Find Plans
. For a more personalized search you may enter your Medicare information (such as your claim number) in the box below the box requesting your Zip Code. If you have opened a mymedicare
account you can manage your prescription drugs through your account (you can create an account at www.medicare.gov; click on mymedicare in the upper right hand corner of the screen).
Note that on October 1 of each year there are two sets of numbers on the website. The default numbers are for 2015; you can also select the numbers for 2014. Those with their 65th birthday late in the year will be signing up for 2014 and shortly after that signing up for 2015. If that is your situation, click on View 2014 plan data located in the middle of the screen.
Clicking on Find Plans
takes you to Step 1 of 4: Enter Information.
Here you are asked which type of Medicare coverage you have and whether you receive a subsidy (or “Extra Help”) for the cost of Part D. Most participants will answer that they have Original Medicare and do not receive any Extra Help.
After answering the questions, click on Continue to Plan Results
arriving at a page labeled Step 2 of 4: Enter Your Drugs.
You are asked to enter your prescription medications. Have your medication bottles in front of you to make sure you enter the right information. After a drug name has been entered, click on Find My Drug
. A list of drugs will open up - click on Add Drug
across from the correct drug name. Dosage information will be requested, along with the pharmacy type (retail or mail order) used to purchase the drug. Click on Add drug and dosage.
After completing the list of drugs, you can save the data for later retrieval (refer to the box on the screen labeled Retrieve My Saved Drug List for the drug list identification number and password date – save both for later use). Saving the data is recommended.
After entering the drugs, click on My Drug List is Complete
(just below the box containing the list of drugs) to move on to Step 3 of 4: Select Your Pharmacies
. The user is asked to enter the local pharmacy or pharmacies where the medications are purchased. This is an important step since the final cost of the plan can depend upon the pharmacy selected. You will want to check if your pharmacy is in your selected plan’s network.
In addition, many Part D plans now use network pharmacies
as well as preferred network pharmacies
. In some cases, the cost of medications purchased at a preferred network pharmacy is substantially lower than the price paid at a network pharmacy. So, make sure you enter the retail pharmacy you typically use. You can check the Part D plan's participating pharmacies at that plan's website.
After entering the pharmacy click on Continue to Plan Results.
You will land on Step 4 of 4: Refine Your Plan Results.
Notice on the left of the screen you are asked to Refine Your Search. Most likely you will want to limit the plan results list by clicking on Select Drug Options.
Here there are four options to choose from including only plans that provide coverage in the doughnut hole (or “gap”); offer mail order (which is frequently less expensive than using a local pharmacy); has no restrictions on drugs (such as pre approval or quantity limit) and has all the participant’s drugs on the formulary. On the right side of the screen go to the box labeled Summary of Your Search Results where you can limit the results to just Prescription Drug Plans with Original Medicare (you may also limit the search to Medicare Advantage plans with or without prescription drug coverage).
After refining the results, click on Continue to Plan Results
. The resulting list will include all the Part D plans in your geographic area ranked by annual cost if the drugs are purchased at a retail pharmacy. You can also select to rank the plans by a number of other factors such as by annual cost if mail order is used.
Once a plan is selected, you can click on a plan for additional detail or compare up to three plans side by side. Once a plan is selected you can click on Enroll and complete the enrollment process online.
Provided by Jim Sullivan, CPA/PFS and the American Institute of CPAs