How to Choose the Best Medicare Part D Plan
If there is one thing in this world that is frustrating, it is trying to navigate Medicare Part D choices.
I have been working with these plans for nine years, so have learned a bit about them. For this reason, I thought it would help people if I shared my insights.
There are many reasons for confusion and frustration, but mainly it’s because there are so many different plans, each with its own coverage, costs, and rules.
Worse yet, people can go to the trouble of finding a plan that works for them, and then a year later learn that it has changed!
It is hard enough to be a senior citizen without having to jump through all the hoops, but the bottom line is that if you cannot or won’t do so, you could be in a heap of health and financial problems down the road!
Here are some tips that will help you to sort your way through the Part D maze.
Check Your Plan Each Year
Every October, if you’re already enrolled in a plan, you’ll receive information that tells you what you can expect for the next year.
If you’re not already enrolled in a plan, you’ll get notices in the mail telling you that it is time to sign up for one. You’ll probably also get a slew of confusing advertisements from providers encouraging you to sign up for their plans.
Don’t bother calling any of them or signing up for anything until you have taken the following steps.
If you ignore this advice, be aware that once you sign up, you’re in for the entire year, even though you may find that a plan does not cover one or more of your medications or they are charging more than you thought you’d have to pay.
Make a List of the Drugs You Take
Your first step is to drag out the bottles of all of the prescription medications you normally take. You may also want the information of those you have taken during the past year temporarily.
Open a spreadsheet in your computer, and for each medication, list the
- amount taken monthly
Place your current medications first and those you’ve taken during the year last.
Next, create a column titled “Tier”.
Then wait until you have the information you need to complete your chart by using the information provided by Medicare.gov.
Understand the Impact of Location
After October 1, all drug companies that serve the area you live in will appear on the Medicare.gov website. This is where you will go to start your search.
Note that not all companies offer services in every geographic area. For example, in my area of Florida, as many as 58 insurance companies are available, but in Nevada, there are only one or two services.
This is because the companies go where they can make the most money. For example, according to US census figures:
- Florida’s population tops 20 million people and approximately 19.9% of those are over 65 (which means that approximately 4 million plus use Medicare)
- On the other hand, Nevada’s total population is less than 3 million and only 15% of the people living there are over the age of 65. (which means that only 45,000 residents use Medicare).
If you look at these figures it is easy to see that there are more Medicare clients in Florida than there are people in the entire state of Nevada!
Therefore, it makes sense that where you live can make a huge difference in the number of choices you have. However, having more choices also means that finding a plan that meets your needs can be mind-boggling!
The Good News!
Fortunately, Medicare makes finding a plan much easier for you.
If you open Medicare.gov and follow the prompts there, you’ll be led to a section that tells you which plans are available in your geographic area and outlines each one.
All you have to do is copy the information from each drug you listed and choose the pharmacy you prefer to use.
Once you have done this, information for each company will appear along with guidelines and cost summaries.
Bear in mind that the information is generic. In other words, the annual estimated amount they show is not necessarily the amount you will pay. It is just, again, an estimate.
However, this section is where you will get the information you need to complete your spreadsheet.
A Few Things You Need to Know
There are a few things to bear in mind when reading the information noted above.
Each plan divides its drugs into levels by cost estimates. So, for example, a tier 1 drug will cost less than a tier 3. The price differences can be substantial.
You will find that the same drugs will appear differently on different plans. For example, something that is a tier 1 on one plan may be a tier 3 on another.
Therefore, it pays to check these levels carefully.
Another important point is that the price they give per medication is the most you will have to pay, but is not necessarily the amount you will pay.
For example, my husband uses a tier 4 medication that is priced at $47, but he only pays $17 for it.
Another important point is that drug prices can change during the year, so you cannot count on paying the same amount throughout the year for a specific drug.
Drug Formulary Changes
Although you sign up for a plan because it offers the medications you take, it sometimes happens that drugs can be removed from the formulary. This means that you can no longer get the same medication.
However, the provider is required by law to provide a similar medication. If you cannot take what they provide, you can request an authorization from your doctor that states you can only take a specific drug, and then, the provider will have to sell it to you.
You can do this by asking your doctor for a written authorization and then giving it to your pharmacist who will arrange to have the drug available for you.
If you sign up for a plan that requires you to pay a deductible, it means that you must pay out of pocket until you have met that amount.
Most companies now require this, but a few do not. Personally, I try to choose the ones that offer zero deductibles because this makes figuring out what I actually will pay easier.
Price Negotiation Info
Every insurance company negotiates prices with pharmacies. Thus, what you would pay out of pocket without insurance can be, and usually is, far different than the amount that you pay once the prices are negotiated.
This is important to understand because it is the negotiated price that forms the basis for what you ultimately pay as a consumer.
I have heard people complain that their plans cost more than their drugs, but what they don’t understand is that without the plan, the costs of their drugs would skyrocket!
For example, the retail price of Crestor is around $313 for 30 tablets, but depending on the plan (and after the price has been negotiated and the tier level set), the consumer will pay approximately $40 to $47 for a one-month supply.
Why Prices Vary So Much
When you sign up for a plan, you are agreeing to pay a monthly fee.
- Those that charge more for this fee usually charge less for the meds they sell.
- Those that charge less usually charge more for the drugs they sell.
So, while some plans, like the one from Wal-Mart sound great, the truth is they can cost much more than others that may seem more expensive.
Much depends on the medications you need and use regularly.
This is why it pays to chart the plans you are interested in.
Creating Your Chart
You already have listed your medications and the doses you take of each. Now it’s time to set up your personal chart.
The next column you need to create is called “Tier”. Here is where you will put the tier number for each medication.
Next to that you will create a column called “Price”. Here is where you will list the cost per month for each drug as per the insurer’s prices.
Next to that you will list the times per year you take the drug. This is where you will see a big difference in what you pay because if you only need to keep 30 pills of a drug on hand it obviously will cost much less than if you need to take it every month.
For example, I must take a few pills of a certain antibiotic when I see my dentist, but I only use this medication for that purpose. Therefore, I note on my chart that I only need 30 pills per year.
Finally, you create a column called “cost”. Here you multiply the price and usage figures to get the true amount you pay. Add these figures together at the bottom, and you’ll have a basic view of what you’ll pay for the drugs.
If you add the cost of the plan to that, you’ll see your annual total.
Below is a sample chart for you to use as a template.
Why Do a Chart?
The best reason for creating your own chart is to maintain control of your expenses.
Just today a neighbor stopped by and asked me to help her with this issue.
Taking the time to check the prices for her medications will save her almost $600 next year over what she paid this year for the exact same prescription drugs!
We only prepared one chart, but by researching Medigare.gov, we found two more companies that might save her even more.
Since she is not good with computers, I suggested she take her information to a local pharmacist and ask him to figure out which of the three plans would save her the most money.
She was unaware that she could do this, but in the future will now be able to use appropriate resources to help her find the plan that is best for her.
While it’s a lot of work to figure out the Part D Plan financials, the results can save you a good deal of money.
However, just because a plan works for you one year, it does not mean it will be good the next time.
Unfortunately, each year you have to do the research or ask someone to do it for you if you want to save money while at the same time being able to access the medications you need to have.
As stated earlier, Part D information becomes available on October 1. You can enroll between October 15 and December 7 of any year for a plan that will become effective on the first day of the following year.
I strongly recommend that you enroll early. If you don’t, you’ll create some financial difficulties for yourself and may even have some problems getting your meds.
If you want to keep the plan you already have, you don’t have to do anything, but if you want to change plans, you must formally enroll in a different one.
You can do this online or by phone. I prefer doing it by phone because it’s faster and simpler.
The bottom line is that you should start planning just before October 1, do your research and set up your charts based on the information you find on Medicare.gov or on a plan’s website (which you can access through the Medicare.gov website).
Bear in mind that if you are married, you must set up separate plans for you and your spouse, which means double the work!
Once you receive your membership card it's a good idea to register it at your pharmacy. You should always keep it with you when you travel as well because without it, you'll have to pay full price for your medications.
Find the Right Part D Plan
As you can see, finding a Medicare Part D plan that will work well for you takes some effort.
It even may require assistance from a friend or your local pharmacist.
However, taking care of this task each year is the best way to save money while making sure that you get the medications you need.
Has this article given you a better understanding about signing up for Part D plans?
Questions & Answers
Are there Medicare Part D plans that cover the donut hole?
There are plans that cover some medications in the donut hole, but these cost more. The plan is to at some point eliminate it altogether, but we're not there yet.