The most important shopping you will do this holiday season is for your Medicare drug plan for next year. November 15 through December 31 is your only opportunity to sign up for the best plan for next year.
The Medicare part D program provides beneficiaries with assistance paying for prescription drugs. Unlike hospital and doctor coverage, which is provided within traditional Medicare or through Medicare advantage plans, the drug coverage requires beneficiaries to enroll in one of the dozens of different programs offered by private companies.
The difficulty for beneficiaries is that no two private company drug plans are the same and every year the plans change their deductibles, coverage limits, annual out-of-pocket thresholds, as well as which drugs are covered and to what extent. Another change is the prescriptions needed are often different one year to the next. FOR THESE REASONS, IT IS ESSENTIAL TO SHOP YOUR DRUG PLAN EVERY YEAR. You could save hundreds of dollars by making sure you have the best plan for you.
As an example, “Ruth” had a plan from “company X”. The coming year, company X raised the premium on her plan 27%, it changed which drugs were treated more favorably as well as changed the deductibles. Ruth had a change in her health and her doctor changed some of her medications. The result is if Ruth keeps her current plan she will spend a total of $2,584 next year according to the Medicare website but if she changes plans she would save $852 the coming year with a different plan.
While not everyone will save by changing plans, it is my observation that the majority will save. As a result everyone must take the time to find out which plan is best every year.
The only way to know if you have the best drug plan is to check the Medicare database after November 15th of every year. The first step is to have a list of all the medications you take including the dosage and the number of pills each month as well as your Medicare number and date of birth. The next step is to access the Medicare database. Here are your options:
1) Go on line and enter your information into the Medicare database. http://www.medicare.gov/MPDPF/Public/Include/DataSection/Questions/SearchOptions.asp The result is a ranking of all plans in your area. The top one will be the least costly and the last one the most expensive over all. There can be differences of over 100%!
2) If you do not have computer access, call HICAP at 916-376-8915. The volunteers can enter your data and determine your best choices. You will need to set an appointment and there are limited number helpers so call earlier than later.
3) Call Medicare at 800-633-4277 and the Medicare representative will enter the information for you. Unfortunately, there are limited representatives and the wait time can be very long. The representative will tell you the three least costly plans and it is up to you to decide on one. The representative can help you sign up for a plan. You can ask that they send it to you in writing before you decide.
Unfortunately, there are people who would like to give you information but it may well not be the best for you. Here are some tips
1) Do not ask what your pharmacist recommends. Some plans pay the pharmacy more than others.
2) Do not automatically get the same drug plan as your Medicare Supplemental. Seldom is the best drug plan for you the same as the best Part A and B plan.
3) Do not take the same plan simply because your spouse or friends have it.
4) Do not sign up for a plan that a salesman is recommending unless the representative has a complete list of all your drugs and can show you the Medicare printout displaying the best plans for you.
It is recommended that you start the process of finding the best drug plan November 15th and complete the process by December first. When calling Medicare or the private companies, sometimes early in the day is better than mid or late day.
So in this holiday season if you are over 65 and not on an employer group health plan that pays for drugs, be sure to check the best Medicare part D plan for you and do so every year. While this may not be your favorite holiday shopping it could be the most important.
Michael Chamberlain CFP®
CA Registered Investment Advisor
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This article is for informational purposes and should not be taken as legal, tax or investment advice