We’re approximately at the halfway point for Medicare’s open enrollment period for this year. In case you haven’t been paying attention, most of us have until December 7th to make changes in our Medicare, Medicare Advantage or Medigap policies. Today on the AgingOptions blog, we want to take a look at an often-overlooked component of Medicare, referred to as Part D – “D” as in “drug coverage.” Prescription drugs can pose a huge expense for seniors, and our prescription needs often change from year to year, so now is the time to make sure the coverage you have is the coverage you need.
Evaluate Your Drug Coverage Carefully or You May Face a Rude Surprise
We came across this article on the CNBC website, published just a few weeks ago and written by columnist Sarah O’Brien. “If you’re on Medicare, now’s the time to closely evaluate your 2020 prescription drug coverage,” she advises. “With plans varying from year to year — including the drugs they cover and the amount you pay for them — you could be setting yourself up for financial woes if you don’t review your options.” One Texas insurance broker told CNBC that seniors need to guard against complacency when it comes to their drug coverage. “Even if you think the plan you have right now is great, you might have a rude surprise when you get to the pharmacy in January and find out your drug is no longer covered,” she warns.
With so much at stake, you would think the great majority of Medicare beneficiaries would take the time during each fall’s open enrollment season to examine their coverage – but you would be wrong. The insurance firm WellCare Health Plans published this study in 2017 which revealed that only about one-third of Medicare recipients comparison shop to find their best health plan. “Healthcare is a significant living expense for seniors, yet many do not spend time searching for the best deals,” the study reported. “In fact, more seniors admit they comparison shop for other living expenses over their Medicare plan.” The study showed that fewer than 40 percent of seniors even take the time to review their medical and drug plans. “Many seniors confess they ignore reviewing their Medicare plan each year. Some do not re-evaluate because they claim their current plan meets their needs; others feel frustrated with the process.” However, “not reassessing their coverage annually may cause many to lose out on the best deals available to them.”
Drug Coverage Terms and Costs Can Vary Widely Between Part D Plans
As CNBC points out, Medicare has been prohibited by law from negotiating drug prices going back at least to 2003, even though the idea of lifting this outmoded ban has widespread bipartisan support. But until the law changes and Medicare officials gain some cost leverage, “retirees – whose budgets often already are stretched thin – can face big differences in drug prices among plans,” the article advises. Each drug plan has what’s referred to as a formulary, which describes what drugs are covered and to what degree. One advocacy group, the Senior Citizens League, warned in a position paper last summer that, when plans drop certain drugs from their formulary, unwary policy-holders could face thousands of dollars in uncovered drug costs.
“When Medicare beneficiaries compare Medicare Part D drug plans based on the drugs they take, they tend to find a huge variation in estimated drug costs between plans,” says the Senior Citizens League. “Unlike other services, Medicare does not negotiate drug prices on behalf of beneficiaries. The plan with the lowest-priced drug can be hundreds or even thousands of dollars less than the highest cost plan for the very same drug. Yet the majority of Medicare beneficiaries rarely shop for their best drug plan during Medicare’s annual Open Enrollment Period. Consequently, Medicare beneficiaries in Part D and Medicare Advantage plans overpay for their prescription medications even though less expensive, high quality plan choices are available. This occurs even though free, trained help is available to compare and choose plans.”
Remember, Cheaper Drug Coverage is Not Always Better Drug Coverage
This issue of drug coverage affects practically every senior in America. According to a Kaiser Family Foundation survey, almost 90 percent of seniors take at least one prescription drug, and more than half take four or more. No one is required to purchase prescription drug coverage, but about 70 percent of beneficiaries do, some buying Part D plans and others through Medicare Advantage plans which often (but not always) include a drug plan. CNBC calculates that the average Part D premium in 2020 will be $30, down a bit from 2019 – but remember that lower premiums do not necessarily translate into lower out-of-pocket costs. Cheaper is not always better.
“You can compare plans through Medicare’s Plan Finder, although be aware that some of the information it spits out might be incomplete,” CNBC warns. Look carefully at the particular plan’s formulary for important details, such as a limit on how much of a drug the plan will cover, or a requirement for company pre-authorization. Some plans require patients to try out cheaper drugs first, before they’ll approve drug you want (often called step therapy).
The bottom line is clear, says the Senior Citizens League. “To avoid overpaying for prescriptions, and to find the most affordable coverage, the importance of comparing drug plans during Medicare’s Fall Open Enrollment period can’t be overstated.” If you need unbiased advice, the Washington State Insurance Commissioner offers the Statewide Health Insurance Benefits Advisors program, or SHIBA, to provide “free, unbiased, and confidential assistance with Medicare and health care choices.” You can also call us at AgingOptions and we can help you find the information you need to make an informed decision.
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(originally reported at www.cnbc.com)