Medicare's prescription drug coverage, or Part D, divides the annual cost of your drugs between you and
Medicare: In 2010, you pay the first $310. Then Medicare pays 75 percent of the cost between
$310 to $2,830. Then you hit the "doughnut hole" - a gap in which
Medicare pays nothing until your total out-of-pocket cost reaches $4,450. Then,
Medicare pays 95 percent of your drug costs for the rest of the year.
If you think that sounds complicated, brace yourself. Picking a Part D plan is anything but simple. If you opt for original fee-for-service Medicare for your hospital and physician coverage, you must select a stand-alone Part D plan. There are scores to choose from, and their cost can vary enormously depending on the drugs you take, the pharmacies you pick, and the plan's co-pay structure.
You can compare plans here.
The most important points to consider:
1. Does the plan cover the drugs you take? Many plans provide full coverage only for "preferred" drugs; some cover only generic drugs. Some plans require you to try other (less expensive) drugs before they'll cover a "non-preferred" drug.
2. How is your share of the cost determined? Some plans charge a flat co-payment for each prescription, but the amount may depend on whether you're buying a generic drug, a brand-name, or a "specialty" drug. Other plans have co-insurance requirements: You pay a percentage of the drug's cost; if the drug's price rises, so does your payment.
3. Where does the plan require you to buy your drugs? Some plans require you to use a mail-order pharmacy; some have arrangements with chain pharmacies; some let you use small, local pharmacies. The cost of drugs can vary dramatically, depending on your choice.
Here's how the Medicare Rights Center, a national consumer advocacy group, advises you to figure out which prescription drug plan will best meet your needs, whether you're comparing stand-alone Part D plans or the prescription drug coverage that is included in Medicare Advantage plans.
- Make a list of the medicines you take, the dosages, and how much you currently pay.
- Make a list of pharmacies you use regularly.
Then decide what type of drug plan you need. If you have:
- Original Medicare: Choose a stand-alone prescription drug plan (PDP) if you want to continue to receive your other health benefits through Original Medicare.
- A Medicare Advantage plan (such as an HMO or PPO): Generally, you must get Part D drug coverage as part of your private health plan’s benefits package.
Third, use the Medicare Drug Plan Finder tool at www.medicare.gov or call 1-800-MEDICARE to review your options and get details.
Fourth, ask questions, such as:
- Does the plan cover all the medications I am taking?
- If the plan does not cover a medication I take, does it cover one that will work for me? (Ask your doctor.)
- Does the plan require that I get special permission before it will cover the medication I need (such as prior authorization or step therapy)?
- How much will I pay at the pharmacy (co-payments or coinsurance) for each drug I need? (Be aware that certain drugs may cost a lot even if they are covered.)
- How much will I pay in monthly premiums and annual deductible?
- Will I have to pay the full cost of my drugs at some point after the deductible (i.e., the 'doughnut hole' coverage gap)?
For a list that includes these and more questions to ask, go to Medicare Interactive.
Please send your questions to Lynn@LynnBrennersFamilyFinance.com. I'm sorry I can't respond personally to every email. Questions are only addressed online.