What Medicare Part D Plan Is Best For Me

Yes You Can Switch Plans As Your Needs Change

If your Part D plan isn’t working for you, there’s hope. Each September, plans send out an Annual Notice of Change letter. This letter lets you know about plan changes for the upcoming year, such as cost increases or drugs being added or removed from the plan . Read the Annual Notice of Change letter carefully to see if it makes sense to keep or switch your plan. You can change plans during open enrollment.

Medicare Part D Drug Tiers

Medicare Part D plans may also divide their formulary up into prescription drug tiers. They will cover medications in various tiers at different amounts. This list describes typical prescription drug tiers for Part D:

• Generic: Manufacturers may produce medication that is identical to brand-name prescription drugs. Since generics are almost always cheaper than their brand-name versions, Part D plans will encourage you to use these with lower out-of-pocket costs.
• Preferred brand-name drugs: Some brand-name medications may not have a generic version. In this case, the plan will charge a somewhat higher copayment but still cover them.
• Non-preferred brand-name drugs: The prescription plan may also cover some more expensive brand-name drugs but charge a higher copay than they would for generics or non-preferred prescriptions.
• Specialty medications: A Part D plan might cover some rarer and more expensive prescriptions because there isnt a good replacement. Because these prescription drugs are expensive, plan members have to share more of the cost.

Extra Help For Medicare Part D

Extra Help is an assistance program that helps lower income individuals more easily afford Medicare Part D. Extra Help helps pay for Part D premiums, deductibles and copayments/coinsurance.

Learn more about Medicare Part D Extra Help, including how to qualify, where Extra Help is offered and how to find other assistance programs designed to help cover Part D prescription drug costs.

You May Like: What Is Medicare Part A B C And D

How To Choose The Best Medicare Part D Plan

Dreamworker has spent years studying and dealing successfully with a number of health issues.

If there is one thing in this world that is frustrating, it is trying to navigate Medicare Part D choices.

I have been working with these plans for nine years, so have learned a bit about them. For this reason, I thought it would help people if I shared my insights.

There are many reasons for confusion and frustration, but mainly its because there are so many different plans, each with its own coverage, costs, and rules.

Worse yet, people can go to the trouble of finding a plan that works for them, and then a year later learn that it has changed!

It is hard enough to be a senior citizen without having to jump through all the hoops, but the bottom line is that if you cannot or wont do so, you could be in a heap of health and financial problems down the road!

Here are some tips that will help you to sort your way through the Part D maze.

A detailed guide to help people navigate the Medicare Part D Prescription Plans more easily.

Pixabay

Preferred Vs Nonpreferred Brand

In general, generic prescription drugs are less expensive than brand-name drugs. Most Part D plans cover generic medications.

Generic versions of a prescription drug are not always available on the market, however. These may be considered preferred brand name because an alternative option isnt available.

Nonpreferred brand-name prescription drugs, on the other hand, are medications that do have a comparable generic version available.

Since you wont always know which drugs are generic, preferred brand name, or nonpreferred brand name, its important to ask the doctor whos prescribing your medication whether its generic.

If its not generic, you can ask whether a generic version is available. This is especially important if you want to keep your drug costs low.

The costs of your prescription drug plan will depend on various factors including:

• the kinds of medications you need
• the plan you have
• if you go to a pharmacy in your plans network
• if the medications you need are on your plans formulary
• if you get Extra Help from Medicare

Some of the costs youll be responsible for may include:

• late enrollment penalties

Deductibles and premiums may vary, depending on your Medicare prescription drug plan. Medicare dictates that yearly deductibles in 2022 cant exceed $480.

Read Also: Does Medicare Pay For Tdap Shot

What Is The Late Enrollment Penalty

Unless you are exempt, Medicare will impose a penalty if you do not join a Part D plan when first eligible to do so. Those exempt from the penalty include people who:

• Had creditable coverage, or
• Qualify for the Low-Income SubsidySocial Security’s Low-Income Subsidy program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as “Extra Help”, beneficiaries who qualify for LIS receive premium… , or
• Were eligible for a Special Enrollment PeriodSpecial Enrollment Periods allow beneficiaries to change their Medicare Advantage and Part D plans due to a special circumstance. Common reasons for a SEP include moving, losing employer coverage, and Medicaid eligibility, to name….

The penalty is 1% of the national base monthly premium for every full month the individual could have been but was not enrolled. The base calculation changes annually and is based on the average national base premium.

The lifetime penalty is added to the persons monthly premium is collected by the Part D plan, not directly by CMS. If a penalty is imposed before the beneficiaryA person who has health care insurance through the Medicare or Medicaid programs. is 65, it is removed when he or she turns 65.

If the late enrollment penalty was imposed in error, there is a process to request reconsideration. Medicare uses Maximus, an independent review organization, to process reconsiderations. The process can take months, and the decision is final.

Which Medicare Plan Is Right For You

You need to look at your whole picture to choose the best Medicare plan: Your health, your financial situation and even your travel plans in retirement. While you can use Original Medicare anywhere in the country, most Medicare Advantage plans require you to use a provider network for all but emergency care.

There is no limit to your out-of-pocket medical expenses with Original Medicare. With Medicare Advantage, your out-of-pocket costs are capped by the federal government, although some plans set their limits below the federal maximum.

You may pay multiple deductibles with Original Medicare:

• There is an annual Part B deductible and a separate Part A inpatient deductible for each benefit period.
• You can have several benefit periods in a year.

Recommended Reading: How To Apply For Medicare In Kentucky

What Is The Coverage Gap Or Donut Hole

Until your total drug costs hit $4,430, you pay the cost sharing designated in your policy in 2022.

• When you reach the initial coverage limit of $4,430 , you enter the coverage gap, also known as the donut hole.
• You then pay 25% of costs for the costs of brand and generic drugs until your total out-of-pocket Part D spending reaches $7,050
• At that point, the catastrophic limit kicks in and beneficiaries pay the greater of 5% or $3.95 for generic medications and $9.85 for brand-name drugs for the rest of the year.13

Learn More About Your Medicare Advantage Prescription Drug Coverage Options

The cost of a Medicare Part D plan may vary from one insurance company to the next and from one location to another.

One way to learn about your Medicare prescription drug coverage options is to speak with a licensed insurance agent. You can compare Medicare Advantage plan costs in your area and find a plan that covers the prescription drugs you need.

Don’t Miss: Will Medicare Pay For Drug Rehab

What Are The Top 5 Rated Medicare Prescription Drug Plans For 2022

The highest rating a plan can have is 5-star. Just because a policy is 5-star in your area doesnt mean its the top-rated plan in the country.

There is no nationwide plan that has a 5-star rating. The best option for you could be the most expensive for your spouse.

A suitable policy is the most affordable one for YOU. Spending time making sure your plan is the best value is a serious recommendation.

With the rising cost of prescriptions, its more important now than ever before to make sure that you find the best policy.

Some plans give you extra benefits when you reach the donut hole, while others dont.

Plans often have a network of pharmacies. But, mail-order drugs could be the savings youre looking for when it comes to getting your pills.

Also, you may find extra savings with a Medicare Part D discount card. Your monthly costs depend on your state and the plan you select.

Medicare Advantage: Medicare Health Plans From Private Insurers

Medicare Advantage, often called Medicare Part C, is the alternative to Original Medicare. It is a broad category of Medicare plans sold by private insurance companies. Medicare Advantage plans resemble employer-sponsored plans as they typically have networks and out-of-pocket limits.

These Medicare plans bundle your coverage into one plan, which will always include the same benefits as Part A and Part B, often offering more. Most Medicare Advantage plans include prescription drug coverage. Many also include vision, dental, and hearing benefits, as well as a fitness membership .

Learn more about Medicare Advantage.

Don’t Miss: How To Compare Medicare Supplement Plans

There Are A Lot Of Medicare Part D Plan Options In My Area How Do I Decide Which Plan Is Best For Me

There are two ways you can get drug coverage. If you have traditional Medicare, you can sign up for a stand-alone prescription drug plan. Or you can join a Medicare Advantage plan that covers all your Medicare benefits including the prescription drug benefit. Whichever you choose, your costs and coverage can vary from one plan to another. In picking the drug coverage that best meets your needs, you can compare plan costs for the premium, deductible, and cost-sharing amounts, whether plans cover the drugs you take and how much they charge for each one, and whether your pharmacy is in the plans network. You can get help comparing your plan options and enrolling in a drug plan by going to the Medicare Plan Finder, a searchable tool on the Medicare.gov website, or by calling 1-800-MEDICARE . You can also contact the State Health Insurance Assistance Program in your state. SHIPs offer local, personalized counseling and assistance to people with Medicare and their families. You can call 877-839-2675 to get the phone number for the SHIP in your state.

Can Changing My Medicare Part D Plan Lower My Drug Costs

Medicare.gov suggests six ways to reduce the cost of your prescription drugs. They include:

We suggest a 7th method: compare plans annually and switch to the best plan for your health and financial needs. It’s not just about gap coverage, because most seniors never reach the coverage gap. What you need is the best overall plan for you, and it may change every year.

Medicare Part D Plans help you pay for your prescription drugs. All PDPs are different, and the costs can vary significantly. It’s not uncommon for a prescription under one plan to cost you $5 at the pharmacy, while the very same prescription through another plan costs $25. This is why carefully comparing and choosing your Part D Plan annually is so crucial. You need to choose the best plan for you, which includes covered medications, the monthly premium, and the costs for your prescriptions .

Recommended Reading: Is Dental Care Included In Medicare

How Much Does Medicare Part D Cost

Every Medicare Part D Plan is different. Provided by independent insurance carriers, PDPs have different drug formularies, premiumsA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. , deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., co-payments, and coinsuranceCoinsurance is a percentage of the total you are required to pay for a medical service. . Let’s start with the formularyA formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Medications not on a plan’s formulary are generally not covered..

Most people are surprised to learn that Medicare drug plans are not required to cover all Medicare-approved medications. This is one of the reasons that shopping for a plan can be challenging.

The 5 Best Medicare Part D Providers For 2022

• Best in Ease of Use: Humana

• Information is easy to follow

• Ability to review all different Parts of Medicare available in your area

• Lots of educational materials on the website, including general Medicare information, AARPs Medicare Plans, as well as enrollment questions

• Must enter at least some of your medications to get an accurate personalized estimate of your costs

• Higher deductibles

• Cannot split payments over multiple methods

AARP was founded in 1958, and was a trailblazer for the insurance of older people, especially since Medicare itself didnt even exist until 1965. As such, AARPs focus is 100% on patient understanding and comfort, and all of the information is written with you in mind. There are free Medicare guides available for download on its website, and its easy to compare plans or connect with an associate for more detailed information and assistance. AARP provides all the tools you need for a well-rounded understanding of Medicare.

Some medication may not be covered by all plans, which can make a huge difference. Make sure you check and see which, if any, of AARPs plans cover your medication, and how much you may have to pay for it.

Also Check: Does Medicare Cover In Home Care For Seniors

Whats The Best Medicare Plan

If anybody definitively tells you, “The best Medicare plan is _____, youll know they dont quite understand Medicare.

Medicare is not a one-size-fits-all program. A plan thats best for one person might be a terrible plan for someone else. The most important thing to understand is that once you learn how Medicare works, youll be able to find the best Medicare plan for you.

The Part D Standard Benefit

At a minimum, plan sponsors must offer a standard benefit package mandated by law. The standard benefit includes an annual deductible and a gap in coverage, previously referred to as the Donut Hole. Sponsors may also offer plans that differ from but are actuarially equivalent to the standard benefit. Finally, they may also offer enhanced plans that provide benefits in addition to the standard benefit. Typically, the enhanced plans offer some coverage during the Donut Hole.

The Standard Benefit is defined in terms of the financial structure of the cost-sharing, not the drugs that must be covered under the plan.

Medicare does not establish premium amounts for plans. Instead, premiums are established through an annual competitive bidding process and evaluated by CMS. Premiums vary from plan to plan and from region to region. Medicare does establish the maximum deductible amount, the Initial Coverage Limit, the TrOOP threshold, and Catastrophic Coverage levels every year. The table below shows the standard benefit for this year .

Standard Part D Benefit 2020-2021

Alternatives to the Standard Benefit

Income-Related Monthly Adjustment Amount Part D

Income-Related Adjustments 2021

Drug Tiers

The Donut Hole

TrOOP

Once beneficiaries reach their out-of-pocket threshold costs), they move out of the Donut Hole and into Catastrophic Coverage.

EOBs

The Donut Hole Discount

Recommended Reading: What Age I Can Get Medicare

Should You Use Licensed Insurance Agents To Find The Best Medicare Part D Plans

Brokers have a lot of training and expertise under their belt, and a good one will be able to spend quality time looking at your individual needs at no cost to you. Be aware, though, aware that most agents work on commission and are in business to sell plans for the companies that will be paying them.

One way to make sure youre dealing with someone who has your best interests in mind is to go to an agent who represents a number of insurance companies.

Ask them: Do you sell all the plans that are available, or do you only represent certain companies? Walker advises.

How Do I Get Enrolled

You must affirmatively enroll in a Part D plan to participate Its not automatic. If you are eligible and don’t enroll during the open enrollment periodDuring the Medicare Open Enrollment Period, Medicare Advantage and Part D plan members can change, switch, or drop a plan they chose during the Annual Election Period. OEP starts on January 1 and ends on March 31. you will have to pay a late enrollment penalty to use the benefit. The penalty is about 1% of the average premium times the number of months that you were eligible but not enrolled.

Read Also: Does Medicare Medicaid Cover Dentures

Learn More About Medicare

Join our email series to receive your free Medicare guide and the latest information about Medicare and Medicare Advantage.

Some of the types of Medicare coverage you can consider include:

The first step in choosing a Medicare plan is to determine which of these types of plans is best for your situation.