Medicare Part D Prescription Drug Plans
For those of us living in Northern California, were you aware there are 14 different insurance companies selling Medicare prescription drug plans? Did you know there are 25 different plans to choose from? The monthly premiums range from, as low as $19.70, to as high as $169.80!
Key questions are:
- Which is the best plan?
Are the more expensive plans better plans?
How and where can I learn more about these plans?
When and how do I sign up?
I don’t take any prescriptions, should I buy a plan?
With 25 plans, thousands of drugs and hundreds of pharmacies, their are many options. This article will provide you some tools on how to take-on this daunting task.
Which is the best plan?
It depends on what prescriptions you take. Don’t become too worried you’ll make the wrong choice. Each year Medicare provides the results from the most recent “Consumer Assessment of Healthcare Provider and Systems (CAHPS)” survey and all the plans received a rating between 77% and 83%. You also can change plans every year during the annual “Medicare Open Enrollment” (October 15th through December 7th), so it is not a life-long decision. Plus, Medicare makes each of these plans follow very strict guidelines, so even if your decision was not the best one for you, the plan you pick will still work OK.
Medicare provides you excellent tools to help you with this important choice. If you have not yet received it, you soon will. If you are about to turn 65, Medicare will mail you their 139 page “Medicare & You” guide. The last several pages are dedicated to the plans in your area. This publication provides a basic overview. Below are instructions for a great tool that Medicare provides for helping you select a Rx plan.
Are the more expensive plans better plans?
Maybe; however, for most of us, the answer is “no.” There are two main factors that determine which plan is the lowest cost for you. 1) Your monthly premium cost you pay to buy the plan and how much you pay each month to buy your prescription(s). It makes no sense to pay more than you need to. Think of it this way, if you live in Florida (which is very flat and does not snow), don’t travel outside the state and don’t drive off-road, would you pay an extra $5,000 to have four-wheel drive with a snowplow option for your pick-up truck? The next section will show you how to buy the ideal plan for you.
When and how do I sign-up?
You have a 7-month window to sign-up – the 3 months before your birthday month of your 65th birthday, your birthday month and the 3 months following your birthday month.
If you have creditable prescription drug coverage on an employer plan, you do not need to sign-up (check with your employer to see if your plan is creditable) until that coverage ends. If you do not sign-up when you are first eligible, you will pay a lifetime late sign-up penalty when you eventually do sign-up.
You can sign-up using the Medicare.gov site mentioned above. Or you can use an agent who sells Medicare prescription drug plans. There is no cost to use an agent. The premiums are the same whether you sign-up via the Medicare.gov site or use an agent. To be eligible to sell a Medicare prescription Part D plan, an agent must pass an annual Medicare approved training program, plus satisfactorily pass each insurance company’s exam for their respective plans. We suggest you use an agent who understands the nuances of Medicare Rx plans and can guide you through the process.
I don’t take any prescriptions, should I buy a plan?
YES! Two real keys reason why:
If you don’t buy when you are first eligible, you will pay a life-long late penalty fee when you eventually do sign-up;
You may not a need a prescription today, but no one knows what tomorrow brings. Many prescriptions cost thousands of dollars. Some miracle life saving drugs cost over $100,000! If you need the drug in February, can you afford to wait until the next January to buy a plan? Be prudent, pay the $19.70/month. Would you not have insurance on your car because you have never had an accident or not buy insurance on your home because your house has never caught fire? BUY A PLAN!
Medicare has a fantastic site to help you view and research all 25 plans. Below are instructions on how to navigate the site (note: these instructions are if you plan on enrolling in “Original Medicare*” and are looking to by a “Standalone Prescription Drug Plan (PDP)*”):
Go to: www.medicare.gov
Click on: “Find health & drug plans”
In the “General Search,” enter your zip code
Select, “Original Medicare*” and “I don’t get any extra help*”
Then click on “Continue to Plan Results”
Enter the drugs you are taking (HINT: when you are done entering your drugs, be sure to write down your “Drug List ID” and the “Password Date.” This will save you time in the future. The site will maintain your drug list and you’ll not have re-enter them the next time you visit the site. It does allow you to make changes to your drug list)
Once you are done entering your drugs, click on “My Drug List is Complete”
Select your pharmacy. Then click on “Continue to Plan Results”
Select “Prescription Drug Plan (with Original Medicare)”
Click on: “Continue to Plan Results”
You can then review all 25 plans. They will be sorted by price. The key thing to look for is, “Cost as of Today.” That number will show what you will pay for the year (it pro-rates the year if you are not starting in January). It is the sum of your monthly premium for the year, plus what you pay at the pharmacy for your prescriptions.