Attention seniors -- and those who love them. Medicare Part D, the prescription drug program, is back again. Starting Nov. 15th and continuing through Dec. 31st, there is a new "open enrollment" period for 2008 Part D coverage.
Since some participating insurance companies have changed their prices for medicines, adjusted the amount of the copayment, or "tier," of some drugs, or changed the basic monthly premium, it is essential to go through the whole process again to make sure you're getting the best deal and that all your drugs are still covered at the same prices. Many plan participants have already received an "Annual Notice of Change" -- a signal that there's something different this year.
So, here's a reminder of how Medicare Part D works, along with a quick lesson in how to use the Medicare.gov "PlanFinder" tool to choose the plan that's best for you -- or your mother, or grandmother! (Remember, if they don't get your help now to pick a Part D insurance plan, they may be asking you for help later to pay for their prescriptions.)
What is Medicare Part D?
Medicare Part D was started in 2006 to make sure that all seniors can get access to prescription drugs through a national insurance program provided by private insurers. Since it is an insurance program, every senior must sign up, even if they are not currently taking prescription drugs. The
exception is for seniors covered by a "creditable" plan such as a workplace health insurance program or corporate retiree plan.
Many seniors take no prescription drugs. Still, they need to sign up for the least expensive monthly plan -- or face steep penalties when they do sign up in the future.
While the government created the standards for what must be covered in Part D, it allowed private insurance companies to compete on the structure of their plans as well as the prices and co-payments they would charge. It's a challenge comparing the many variables, including the inexplicable "donut hole" that eliminates coverage after a certain level -- until the "catastrophic" level of costs is reached.
And to make choices even more confusing, the government also subsidizes Medicare "HMOs" to include prescription drugs in their coverage. So, seniors could choose a "stand-alone" Part D plan along with traditional Medicare Part A and B. Or they could choose an HMO -- simpler and typically less expensive, but perhaps limited in the choice of physicians and services they might need in the future.
But Medicare did one good thing that kept these choices from being incomprehensible. They created the online "Plan Finder" tool at the Medicare
Web site. It is the only reasonably sane way to figure out which plan will cost you the least for your specific drugs and dosages.
The Medicare.gov Plan Finder Tool
Since all competing private plans offered by insurers must register their monthly premiums, individual drug costs, co-payments, and approaches to dealing with that coverage gap, the Plan Finder tool allows you to instantly compare and choose the best coverage. To make best use of this tool you'll need to get your Medicare card. Then line up all your prescription bottles and dosages.
(Note: If you're not computer savvy, and don't have anyone in your family to help, you can call 1-800-MEDICARE and they'll walk you through the process.)
Go to www.Medicare.gov and at the home page click on the top line that says "Medicare Drug Plans 2008 Plan Data." On the next page, click on "Begin Personalized Search." (If you don't have a Medicare card, you can do a generalized search, which is the other option on the page.)
On the next page you'll have the task of entering your prescriptions, one by one. Since there are many versions of some drugs, be sure you enter the name exactly. Or search the drug list alphabetically. The plan finder will suggest the lower-cost generic drug if available.
Then be sure you have entered the correct dosage amount, and the number of pills per day. Continue until you have entered all your drugs. (You can save your list of prescriptions at the site, to make it easier next time.)
On the next page, you can choose pharmacies in your zipcode to make sure that the plan you ultimately choose based on price is also convenient. Click once more and you'll be amazed to see all of the plans available in your area, starting with the one that has the
lowest total estimated annual cost
based on your prescriptions.
If you're not taking any prescriptions now, just choose the plan with the lowest monthly premium. But if you are planning to take those drugs all year long, you may care less about the monthly premium or annual deductible than about your total cost for the year.
The tool allows you to compare up to three plans, so you can see the differences. Then click on the name of the plan you choose to learn more details, including how to enroll.
Terry's Tips on Part D
Don't wait until the last minute to compare Part D plans, particularly if you don't have access to a computer. The phone lines at 1-800-MEDICARE now get crowded. If the least expensive plan is too expensive for you, contact the nearest Social Security office about the federal "Extra Help" program, or the State Department of Aging.
Many local senior citizens centers offer help with the process of choosing the best plan. Even your nearby chain drugstore may offer useful advice, since they participate in most major Part D plans, and have access to your list of drugs.
Finally, when you do enroll, you should always double check and get confirmation in writing that the plan does cover your drugs at the dosage levels you take, and any restrictions, according to Deane Beebe of
MedicareRights.org, a website that also offers significant help in answering questions about Medicare Part D.
It always amazes me that we ask seniors to do the most sophisticated calculations about their financial decisions. But with a little help, seniors have proved they can do it. And that's The Savage Truth.
Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated, and she released her fourth book,
The Savage Number: How Much Money Do You Need?
in June 2005. Savage was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. A Phi Beta Kappa graduate of the University of Michigan, Savage currently serves as a director of the Chicago Mercantile Exchange Corp. She also has served on the boards of McDonald's and Pennzoil.