Comparing Medicare Drug Plans

As the time comes to choose a Medicare Part D drug plan, you begin to realize that there are probably a few dozen plans to choose from. This is initially apparent when, a few months before you are officially eligible for a Medicare drug plan, you start to get what seems to be literally truck loads of advertisements from insurance companies in the mail. If you're like most people, you start to review the circulars that arrive on a daily basis, only to realize that the more information you receive, the more confusing it becomes.

Medicare drug plans seem to have too many moving parts. An insurance company may offer as many as three Medicare drug plans. Among these three plans, there may be many variables that can be hard to decipher. Your goal is to get the best coverage for the least amount of money based on the drugs you are prescribed. When you consider that there are literally dozens of plans to choose from, it becomes apparent that choosing the best plan is not always easy.

What you need to consider

• Plans may have different formularies. A formulary is the list of covered drugs for a particular plan. For example, if your physician has determined that a particular drug works well for you and it's not included in the formulary, you may want to choose another plan. There are procedures available for your physician to petition the plan for an exception. But with dozens of plan choices available, starting this process is probably not yet necessary.
• Premiums may vary widely from one plan to another, and if a plan is not affordable it should be removed from consideration.
• Some plans may include a calendar year deductible and some may not. 2011 plans may have a deductible up to $310.
• All Medicare drug plans categorize specific drugs into tiers. Normally there are four tiers. Tier 1 typically is preferred generics, tier 2 is preferred name brands, tier 3 is non-preferred name brand and tier 4 is normally specialty drugs. Here's where it gets tricky; plans do not put all drugs into the same tier. For example, a name brand drug treating high cholesterol, may be considered tier 2 by one plan and tier 3 by another. The difference in drug co-pays may actually make a plan with a higher premium a better deal.
• Medicare drug plans include a coverage gap. Part D was never meant to be comprehensive. Just like original Medicare, Part D plan were to provide a safety net for Medicare beneficiaries. After the total prescription cost paid by you and the plan reaches $2840, you enter the coverage gap. After you have paid $4550 out-of-pocket, you enter what is considered catastrophic coverage where you have greatly reduced co-pays for the remainder of the year. Beginning in 2011 you will be responsible for only 50% of the cost for brand name drugs and 93% of the cost for generic drugs. This change was brought about bu Health Care Reform legislation.
  

All of these aspects must be considered when choosing a Medicare drug plan. There may be scenarios when a plan with a higher premium may be the best plan and times when plan with a lower premium and a deductible will be best.

If all of this seems just a little confusing, the good news is there is help. The first resource to consider, if your able to crunch the data, is Medicare's website. They will list all of the Medicare drug plans available in your area.This will give you a good place to start, but it still involves a great deal of leg work.

Often your pharmacist is a good resource. They often have a good working knowledge of the various plans available and know what prescriptions you are taking. Normally, they will go out of their way to help you, as they would like to retain your business.

Your local area council on ageing or other service organization can often be a good resource to help you find a Medicare drug plan. Also, if you have a working relationship with an insurance agent or broker that you trust, you may be able to rely on their recommendation. Although, you should ask if they represent more than on company, as a captive agent who only represents one company may be of limited assistance.

Another way to get your Medicare drug plan

If you are first becoming eligible for Medicare, you may consider enrolling in a Medicare Advantage Plan. A Medicare Advantage plan, is another way to receive your Medicare. A private insurance company contracts with CMS (Centers for Medicare and Medicaid) to administer your plan and often your Medicare drug plan is included. Many Advantage plans have low premiums or in some cases, no premium.

Whether you choose a stand alone Part D Medicare drug plan or an Advantage plan that includes Part D coverage, it's important to know that during your Annual Enrollment Period (AEP), you are able to compare plans to ensure that you get what's best for you. The AEP runs from November 15 to December 31 each year. This is available to you because insurance companies can change their plans on an annual basis. The AEP is the good news, the bad news is, in the months prior, you will still receive truck loads of advertising in the mail.