Thursday, 18 October 2012
Medicare Enrollment Information: Part 3 – Prescription Drugs
EDITORIAL NOTE: As with all these Medicare posts, it is crucial to be correct. If you find errors, please email me (as opposed to posting corrections in the comments) so I can incorporate them into the body of post where more people will see them.
WHAT IS MEDICARE PART D
Part D, the Medicare prescription drug program, was created in 2006 to help elders, who use more drugs than younger people, pay for those drugs. It is private insurance for which you pay a monthly premium separate from your Medicare Part B and supplemental (Medigap) premiums.
WHO CAN PURCHASE PRESCRIPTION DRUG COVERAGE
People enrolled in traditional Medicare – that is, Parts A and B – can purchase a Part D plan. Advantage Plan enrollees cannot.
Prescription drug coverage cannot be denied to you for any reason including health, the number of drugs you take or your income. No physical examination is required. All you need to do is find a plan and sign up.
WHEN SHOULD PART D BE PURCHASED
If you are joining Medicare now, this is the best time to choose a drug plan. There is a seven-month window for doing this beginning three months before your 65th birthday, the birthday month and three months following.
With a few exceptions, if you join a Part D plan after that period, you will be required to pay a premium penalty that will last for as long as you are in the program.
You can hold off joining a Part D plan without incurring a penalty if you have drug coverage better than Medicare's from a current or former employer.
WHEN CAN I CHANGE MY PART D PLAN
Everyone already enrolled in Part D can change their plan each year during the annual open enrollment period which we are now in until 7 December.
If you currently have a Part D plan you are happy with, you don't need to do anything during the enrollment period and your coverage will continue through 2013 as it is now. It's tempting, but that could be a costly choice:
IMPORTANT: Drug plans change year to year, sometimes dramatically. Premiums may increase along with copays and/or deductibles. Some drugs that are covered may be dropped, others may be added and prices can change.
In some cases, the price of a the same drug can vary from plan to plan by as much as $100 or more for a 30-day supply. So with all that, it behooves you to check how your plan may have changed for 2013 and if you are dissatisfied, to look for a new plan.
WHAT DO PART D DRUG PLANS COST
Each insurance provider negotiates its own prices with pharmaceutical manufacturers for each drug. Depending on discounts negotiated, co-pays can vary widely. Additionally, providers divide drugs into “tiers” which affects price.
Given the thousands of drugs, 50 individual states, dozens of individual plans from nearly as many insurance companies each with differing deductibles, copays, tiers, etc., the possible price permutations may not be astronomical but I think it comes damned close.
So I cannot stress enough the importance of comparing plans to save money. Premiums for 2013 range from $15 to $165 per month. Most cost about $30 to $40.
The Donut Hole
Anyone who uses several drugs or expensive drugs knows about the infamous donut hole in Part D during which the insured must pay the entire cost of drugs.
Obamacare, the Affordable Care Act, changed that. The donut hole is gradually shrinking each year until the full discount of 75 percent is reached in 2020.
For next year, 2013, the donut hole begins when the total cost of drugs (including your payments and the insurance company's share) exceeds $2,970.
You then pay the full cost until your spending reaches $4,700 when Part D kicks in again with “catastrophic coverage” and usually pays 95 percent of your drug costs for the rest of the year.
During your stay in the donut hole in 2013, you will pay 47.5 percent of brand-name drugs and 79 percent of generic drugs. However, the full retail cost applies to your time in the donut hole.
Extra Financial Help
There is extra help to pay Part D premiums for low-income beneficiaries. You can find out about that at this Social Security webpage.
Given where we are in the presidential election cycle, it's useful to know that if Mitt Romney is elected and he follows through on his declaration to repeal Obamacare, the donut hole will expand to its original size when the legislation is signed.
WHAT DRUGS DOES PART D COVER
Oh, I'm so sorry you asked. You would think it should cover all drugs, but of course it is not that simple.
Certain types of drugs are excluded altogether, among them: over-the-counter drugs, drugs used for cosmetic reasons or weight loss, fertility drugs and drugs for erectile dysfunction.
Each Part D provider publishes an annual “formulary” which lists its “preferred” drugs and the companies must provide at least two drugs in each class of drugs that treat the same condition.
There is much more complexity to this than I am even hinting at so I'm going to stop now. If you really care about more than which individual drugs a given insurance company provides, you're on your own.
What If I Don't Take any Prescription Drugs
Ah, with apologies to Matt Taibbi, this is the giant vampire squid of Medicare Part D: since no one can predict what drugs they might need in the future, there is no possibility of choosing a plan that will definitely cover the ones that might become necessary.
(This is, obviously, also true of people who know their current drug needs, but could require unknown others in the future.)
I'm sitting here, apparently in good health until I'm not and have no way to know what will go wrong or when. So what kind of vampire squid inflicts such a no-choice plan on elders? Well, let's just say it's the pharmaceutical companies who wrote the Part D legislation.
But right now, with the 2013 enrollment period at hand, we are stuck with this potentially dangerous and expensive hardship.
What some who don't currently use any prescription drugs do is purchase the cheapest policy available and hope for the best. That's what I do and should I need drugs between now and the next enrollment period, I've resigned myself to the fact if my plan does not cover those drugs, I'll just need to figure out how to pay until I can enroll in a new program that meets my needs.
Last year's least expensive plan cost $15.10 per month with a $300-plus deductible. For 2013, the company raised the price to $18.50 - not all that much but the increase still ticked me off so I have switched to this year's cheapest plan, a new one at $15 per month from AARP, also with a $300-plus deductible.
HOW TO CHOOSE A PART D PLAN
There are so many Part D plans with so many variables that the only reasonable way I know to compare them is Medicare's Plan Finder Tool. Be sure to have the name and details of your current plan handy along with a list of your drugs and dosages. A pad and pen are helpful too.
There are a couple of pages of simple questions, another page to list your drugs and dosages and when you have finished you will land on a results page with a list of the plans available in your state that cover your drugs. Each plan on the chart will show premiums, estimated costs for the year for your drugs including deductible and copays for the year.
If it is easier for you, you can telephone Medicare 800-633-4227, ask a customer service representative to do the search and give you results via email or postal mail. It has been my experience that Medicare customer service people are well-trained, helpful and patient in answering questions.
HOW TO ENROLL IN YOUR CHOSEN DRUG PLAN
When you have made your choice of drug plan, you can click on the “enroll” button in the chart area of your plan on the Medicare Plan Finder Tool and enroll entirely online.
Or, in the same tool, click the name of the plan you have chosen and you'll be taken to a page with telephone numbers for the insurance company.
Each drug plan on Medicare's Plan Finder Tool has a rating of one to five stars. These are granted each fall (and can change year to year) based on member satisfaction surveys and other criteria. Five stars is the highest rating of excellence.
You are allowed to switch to a five-star prescription drug plan one time between 8 December 2012 and 30 November 2013.
Good god. You wouldn't think there is so much to say about a simple little drug add-on program. Believe me, I have omitted many times more information than what I've told you here. It shouldn't be this hard. (I could write volumes about why this is such a convoluted, miserable, difficult program and how angry that makes me, but I'll spare you today.)
I don't know about you, but I'm exhausted from all our Medicare talk this week and I need a break. But we still have Advantage Plans to cover and a list of helpful contacts. I'll do that early next week and have something easier for all of us tomorrow, Friday.
Medicare Enrollment Information: Part 1 - The Basics
Medicare Enrollment Information: Part 2 - Medigap
Medicare Enrollment Information: Part 4 - Advantage Plans
Medicare Enrollment Information: Part 5 - Where to Get Help
At The Elder Storytelling Place today, Johna Ferguson: Chocolate