As the Medicare open enrollment season winds down – it ends officially on December 7th – we wanted to revisit a topic we wrote about here on the AgingOptions blog just a few weeks ago. A big part of open enrollment involves shopping for Part D prescription drug plans, a process which can be confusing under the best of circumstances. This year, with much fanfare, Medicare rolled out a modified and updated Plan Finder designed to make comparison shopping easier. But now comes a warning from the website of the authoritative PBS NewsHour alerting shoppers that, if they aren’t careful in how they use the pricing tool, they may end up picking a Part D drug plan that will cost them much more than they ought to pay.
Medicare Part D Costs: The New Plan Finder May Be Misleading
You’ll find the recent NewsHour story here. It warns, “A glitch in Medicare’s revamped prescription plan finder can steer unwitting seniors to coverage that costs much more than they need to pay, according to people who help with sign-ups as well as program experts.” Plan Finder, designed to help Medicare’s 60 million recipients, “is the most commonly used tool on Medicare.gov and just got its first major update in a decade,” says PBS. “But as open enrollment goes into the home stretch Thanksgiving week, critics say the new tool can create confusion by obscuring out-of-pocket costs that seniors should factor into their decisions.”
As NewsHour reports, U.S. government efforts to blend health care and technology have not always performed as advertised. “Despite billions spent to subsidize electronic medical records, getting different systems to communicate remains a challenge. The Obama administration’s launch of HealthCare.gov resulted in an embarrassing debacle when the website froze up the first day.” Now, says PBS, Medicare is facing criticism. “The Medicare plan finder’s issue stems from a significant change the agency made for 2020. The plan with the lowest premium now gets automatically placed on top, with the monthly premium displayed in large font.”
Medicare Part D Costs: Premiums Are Only Part of the Story
In its previous iteration, the plan finder automatically sorted plans by total cost, not just by premiums. Many Medicare experts prefer the “total cost” method because premiums only tell part of the story. “When out-of-pocket expenses such as copays are factored in,” says PBS, “the plan with the lowest total annual cost is often not the first one shown by the plan finder.” However, with the premium-focused redesign, finding out the real bottom line cost takes extra effort that many Medicare enrollees may not know about.
Ohio state official Ann Kayrish told NewsHour, “If they pick the plan based solely on the premium, they are likely getting a plan that could cost them thousands more in a calendar year.” Medicare officials defend their choice to sort plans by monthly premium since that is the cost consumers understand the best, but, as the story reports, “the agency also said total cost paid out-of-pocket is at least equally, if not more important, particularly for people who take prescription drugs — as do most seniors.” The new Plan Finder displays the premium cost prominently “because user testing showed that’s what consumers are familiar with,” while the total annual cost including co-pays and deductibles is included, but in smaller font. When sorting plans, the system gives priority to lowest premium, not lowest annual cost.
Medicare Part D Costs: Make Certain You Sort Using the Proper Criteria
According to NewsHour, consumers using the plan finder start by entering medications and dosages. But then, says Ohio’s Kayrish, after the screen displays initial search results, comparison shoppers should look for the drop-down menu on the right of the screen and select the feature that allows them to re-sort plans by “lowest drug + premium cost.” When PBS reporters tried this for themselves, using a sample search for six common medications, the initial search favored a lowest-premium plan at just over $13 per month. But when the plans we re-sorted, the best deal was a plan with a monthly premium twice as high. An apples-to-apples comparison showed that the “more expensive” plan would actually end up saving the beneficiary roughly $5,800 annually.
“Costs can vary so much because plans have different coverage designs and they don’t pay the same prices to drugmakers,” says PBS. What’s more, in spite of the redesign, “the new Plan Finder can return options that don’t cover all of a patient’s medications.” The report suggests that, if a low-premium plan seems to have unusually high out-of-pocket costs, “it’s a clue that some of your drugs may not be covered. Check plan details.” The bottom line, experts say, is that Medicare’s new Plan Finder does represent a technological leap forward, but “it did take a meaningful step backward by not doing more to highlight its most useful output— the total cost estimate.” The old adage applies once again: Caveat emptor. Buyer beware!
Do Your Homework – with Medicare Part D and All of Retirement Planning
It’s clear from the NewsHour report that not all Medicare Part D plans are created equal, so it’s important to explore your options carefully during open enrollment – and there’s little time remaining between now and December 7th. We also urge you to use this opportunity to take a hard look at all aspects of your retirement plan, not just your medical care – aspects such as your financial plans, your housing strategy, your family situation and your legal protection. It’s essential that these “puzzle pieces” all fit together if your retirement plan is going to work the way you want it to, and there’s one comprehensive approach that ensures that they will: a LifePlan from AgingOptions.
We invite you to learn more at a free LifePlanning Seminar with Rajiv Nagaich – an information-packed, highly enjoyable session in which you’ll find answers to many of your retirement questions. For a calendar of upcoming seminars, visit our Live Events page and register for the seminar of your choice. We’ll look forward to meeting you at an AgingOptions LifePlanning Seminar – and meanwhile, age on!
(originally reported at www.pbs.org/newshour)