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Parsing Through Prescription Plans

Medicare Part D enrollments begin this week. Here are the steps seniors should take.

It's that time of year again.

Millions of seniors are once again confronting the issue of Medicare Part D, with the new enrollment period for the prescription drug plan starting Wednesday and running through Dec. 31.

Even seniors who already signed up for a plan should take a few minutes to compare plans and figure out whether they should switch to get a better deal. The only way to find the best plan is to access the Web site -- a task that is foreign to many seniors. If you're not a senior, that's where you can help.

The concept is intimidating, but this year the process is much easier because the government has completely revamped the Medicare site.

I'll walk you through the simple steps below. Then you can sign up yourself, or look to a senior who's mystified -- maybe your grandmother, or the nice lady down the hall in your condo building -- and offer to help. It should take less than 15 minutes.

Just remember: All seniors aged 65 and up should sign up for Medicare Part D, even if they don't take any prescription drugs right now.

An exception would be if a senior is still working and has prescription benefits, or if a retiree has prescription benefits that have similar "credible" coverage. If that coverage ends, they can sign up later without penalty. Veterans who get prescriptions from the VA don't need to sign up for Part D -- but vets should check out the program, since the VA doesn't cover all prescription drugs.

While Part D is a government-designed program, it is provided by private insurance companies, which compete to offer the most comprehensive coverage at the lowest cost.

Many insurance companies offer different structures for dealing with monthly premiums, co-payments and the "doughnut hole" gap during which no benefits are paid. In fact, you could go crazy trying to figure out which is the best plan for you -- the one that will cost you the least, cover all your drugs and is accepted by your local pharmacy.

But the new "PlanFinder" tool at the

Medicare Web site makes quick work of all these comparisons. Following are my instructions for seniors.

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Finding the Best Plan

Make sure you have a list of all your prescriptions and dosages, and your Medicare number if you have one. On the Medicare Web site, click on the first option: "Compare Medicare Prescription Drug Plans." On the next screen, find the little gray box that says "Find and Compare Plans." You can then choose between a general search using your prescriptions or a personalized search based on your Medicare claim number. You'll get to the same place either way.

You must give your zip code to sort for plans with pharmacies in your area. Then you'll be asked to enter your prescriptions one by one, including accurate dosages. The tool actually lists the most common drugs and dosages and helps you find your drug alphabetically. As you build your list of prescriptions, you'll also see generic equivalents. You can save this list with a password in case you want to finish later.

Then you're ready for the big click: compare plans. Within seconds, you'll see a listing of plans, with the lowest-cost plans listed first.

But you must take two more steps. Instead of just picking the lowest-cost plan, use the tool on this page to compare two or three plans. As you compare, look at the list of pharmacies on their list. Then you must click twice more because the best feature of the plan finder is buried under a little tab at the top of each plan description on the comparison page.

Be sure to click on "More Information" and then on "View Plan Details." Then scroll down to the bottom of the page, and you'll see a bar chart showing you how much you'll pay every month. That's very important because some plans may start out with an inexpensive monthly cost, and then you'll find your expenditures jumping dramatically when you hit that uncovered portion called the "doughnut hole."

You'll probably prefer a plan that promises level payments, making it easier to budget. So be sure to use this bar chart to compare monthly out-of-pocket costs. It is the most useful part of the plan finder.

Now you're ready to sign up. Instructions on how to contact each plan are right on your screen. Don't worry if you aren't familiar with the name of the plan provider. They've all been approved by Medicare. And your pharmacy has agreed to work with them.

You're getting your own meds from your own pharmacy -- and now you know that you're getting them at the lowest possible cost. 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.