If you are covered by Medicare Part D and are not on an employer or group plan, this is critical information. Open enrollment for the Medicare Part D Drug plans started on October 15th. You have until December 7th to determine which is the best plan for you in 2014 and make the needed change. It could save you hundreds or thousands of dollars.
Why it’s Important to Compare
In a recent analyzes for one of our clients, he would save $5,200 for the year and his spouse would save $1,450 by switching to a different plan and using a different pharmacy. That is a total savings of $6,650 for the year!
When reviewing plans for clients for 2014, so far we have found the average savings is $220 per year. In some cases it turns out that the plan you have will still be the best for you in 2014. You just won’t know if you don’t take the time to get a review of your options.
You May Need to Change Plans
There are many reasons you cannot assume that the plan you are on now will be the best one for you in 2014. These reasons include.
- Increased monthly premium.
- Increased deductible amount.
- Changes in what drugs the plans cover and how well they cover them.
- Changes in the medications you take.
- Your plan may no longer be offered. (In this case if you do nothing you will be enrolled in another plan that most likely will not be the best suited for you.)
- Brand new plans will be offered which might save you money.
- With some plans you get the best price on drugs by using a specific pharmacy. (You need to know this and make sure you are using that pharmacy.)
How to Compare Plans
- If you have Internet access, you can compare Medicare’s drug plans online. Go to Medicare’s “Plan Finder Tool” at www.medicare.gov/find-a-plan, and type in your personal information (from your Medicare Card), the drugs you take and dosages, select the pharmacies you use and you’ll get a cost comparison breakdown (“estimated annual drug cost”) for each plan available in your area.
- If you are not able to do a comparison yourself online, consider asking someone in your family or a friend to help you.
- Or you can call Medicare at 800-633-4227 and they will help you over the phone.
What to Compare
- When comparing drug plans, look at the “estimated annual drug costs” which is how much you can expect to pay for the entire year in total out-of-pocket costs, including; premiums, deductibles and co-pays. Don’t choose a plan based only on the monthly premium. Low-premium plans often have higher prescription co-payments and could end up being more expensive when all aspects are considered.
- Be certain to verify that the plan you’re considering covers all of the drugs you take with no restrictions. Some plans require you to get prior approval for a particular drug or have “step therapy” where you must try a number of cheaper drugs before they will cover certain prescriptions.
- If you want to use a specific pharmacy be certain to include that information in the search but be aware that substantial savings can be achieved by using mail order service or a big chain such as Wal-Mart.
Penalty if You Do Not Have Coverage
Once you become eligible for Medicare Part D and are not participating in an employer or group plan, you should enroll in a Part D plan. If you don’t, you will pay a penalty when you finally do enroll. The late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($31.08 in 2012) times the number of full, uncovered months you were eligible but didn’t join a Medicare Prescription Drug Plan. The final amount is rounded to the nearest $.10 and added to your monthly premium. If you do not have coverage for 4 years the penalty could be $14.90 a month at a minimum.
The national base beneficiary premium may increase each year, so the penalty amount may also increase each year.
After you join a Medicare D Drug plan, the plan will tell you the amount of the penalty you owe, and what your premium will be.
If you currently have a Medicare Part D plan it is critical that you shop for the best plan now.