4 Reasons You Should Consider Changing Your Medicare Part D Plan This Year

4 Reasons You Should Consider Changing Your Medicare Part D Plan This Year

Medicare open enrollment is well underway. With a few weeks left you still have time to make decisions regarding 2015 coverage. Though you may feel compelled to stick with your Medicare Part D plan or simply haven’t considered the possibility, it may be wise to reassess. Switching Part D coverage may be a smart move. Yet, most people don’t. The New York Times reported that “fewer than 10 percent of seniors change their Medicare Part D plans each year” and that studies show they “would be better off if they changed plans more frequently.”[1]

Here are four reasons you should reevaluate your current Part D coverage and explore what is available in 2015:

Prescriptions changeand so do formularies, benefits and network pharmacies.

Have you changed or added medications in the past year, or do you expect to in 2015? Check your plan’s drug formulary for the upcoming year to ensure the medications you take, recently started or may take in the year ahead are still included in 2015 and at what amount. Also check the plan’s pharmacy network to ensure your preferred and conveniently located pharmacy, or pharmacies, are included.

Use the Medicare Plan Finder at medicare.gov/find-a-plan to search for plans in your area. You can customize your search by entering or selecting:

  • How you get your Medicare (i.e., Original Medicare, Medicare Health Plan, you don’t yet have it)
  • If and how you get help paying for Medicare prescription drug costs
  • What drugs you have, including dosage, quantity and whether or not you take the generic form
  • Which pharmacy or pharmacies you use

You will then get a list of plan results, which you can compare. Information provided will include whether or not your medications are included in the drug formulary and if restrictions apply.

Available plans change.

Fewer Part D plans seem to be available each year. According to the Kaiser Family Foundation, 1,001 Part D plans are available in 2015—168 fewer than 2014 and 874 fewer than 2007 when the number available peaked at 1,875.[2]

Even if your plan doesn’t exit the market in 2015 (you would be notified), you may want to see what else is available. New Part D plans enter the Medicare program. While 238 Part D plans exited or were consolidated with others, 70 new plans became available.[3] One of them may be a better fit for your prescription drug and budgetary needs.

You may cut costs.

Part D premiums keep rising. Sixty-four percent all Part D enrollees are projected to pay $1 or more in monthly premium if they stay with their current plan in 2015, and the projected average monthly Part D premium will increase 4 percent to $38.83—a 50 percent increase from 2006.[4]

These amounts may seem insubstantial; however, it is still worth seeing if you might save money or gain access to drug formularies and benefits that better suit your needs by switching. A 2013 Kaiser Family Foundation analysis found that those who switched plans were more likely than those who didn’t to lower their premiums.[5]

Nearly half (46 percent of enrollees) who switched reduced their premiums at least 5 percent the following year. Only 8 percent of those who kept their plans saw lower premiums. Those who switched were slightly more likely to lower out-of-pocket costs.

It is important to remember that the $38.83 mentioned above is just an average. Actual premiums can vary greatly, and plan benefits are the same at their core. In 2014, Part D premiums ranged from $12.80 to $114.40 per month for plans offering equivalent benefits.[6]

Also remember that how much you actually pay will vary depending on your prescriptions, the plan you choose, whether or not you go to an in-network pharmacy and use drugs on the plan formulary, and if you get Extra Help to pay for Medicare Part D costs.[7]

In September you should have received an Annual Notice of Change from your Medicare plan. If you haven’t yet, read it over and note any changes to your coverage, costs and service area starting Jan. 1, 2015. Then, compare your current plan’s 2015 costs and benefits with others available. Use the Medicare Plan Finder to locate your options.

When comparing plans, consider the following:

  • Premium — Premiums vary by plan, but they are also based on your annual income and filing status. Higher-income enrollees may pay more based on yearly income and filing status.
  • Annual deductible — In 2015, Medicare Part D plan deductibles may not exceed $320.[8]
  • Copayments — The flat dollar amount you pay for medications in a certain tier; copayments may vary by tier.
  • Coinsurance — The percentage you pay for a medication’s cost.

You will also want to consider your costs in the coverage gap—also known as the donut hole. If you reach this coverage gap in 2015—once you and your plan have spent $2,960 on covered drugs—you will be eligible for a 55 percent discount on covered brand name drugs and increased savings on generic drugs.[9][10] That means you will pay 45 percent for brand-name drugs in the coverage gape and 65 percent for generic drugs in the coverage gap.[11] Those who get Extra Help will not enter the coverage gap.

Extra Help is available to those with limited income and resources who participate in Medicare Part D. You must apply for separate from your Medicare Part D plan enrollment. The application and additional details may be found at ssa.gov/medicare/prescriptionhelp/.

Your current plan may be dated.

Part D plan designs change over time due to trends in the market. Kaiser reports that in 2015[12]:

  • 87 percent of Part D plans “use pharmacy networks with preferred (lower) cost sharing in select network pharmacies, up from 72 percent in 2014.”
  • For the first time, almost all Part D plans will use tiered cost sharing, although tiers have been common since the program started in 2006. Most will use five tiers—two for generic drugs, two for brand-name drugs and one for higher-cost specialty drugs.
  • Part D plans are increasingly shifting from flat copayments to coinsurance for at least one of the tiers for brand-name drugs

Medicare’s 2015 open-enrollment period lasts through Dec. 7. You still have time to shop around and make sure you have the right Part D prescription drug plan for the year ahead.

If you have questions about specific Part D plans, contact the company offering them. For additional help, visit medicare.gov/forms-help-and-resources and select your state from the drop-down button under “Find someone to talk to” on the right side of your screen.

 

 

[1] Sanger-Katz, Margot and Amanda Cox. “With New Health Law, Shopping Around Can Be Crucial.” The New York Times. Sept. 17, 2014. http://www.nytimes.com/2014/09/18/upshot/with-new-health-law-shopping-around-can-be-crucial.html?_r=0&abt=0002&abg=1 .

[2] Hoadley, Jack, et al. “Medicare Part D: A First Look at Plan Offerings in 2015.” The Henry J. Kaiser Family Foundation. Oct. 10, 2014. http://kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-plan-offerings-in-2015/.

[3] Ibid.

[4] Ibid.

[5] Hoadley, Jack, et al. “To Switch or Not to Switch: Are Medicare Beneficiaries Switching Drug Plans to Save Money?” The Henry J. Kaiser Family Foundation. Oct. 10, 2013. http://kff.org/medicare/issue-brief/to-switch-or-not-to-switch-are-medicare-beneficiaries-switching-drug-plans-to-save-money/.

[6] Hoadley, Jack, et al. “Medicare Part D in Its Ninth Year: The 2014 Marketplace and Key Trends, 2006—2014.” Aug. 18, 2014. http://kff.org/medicare/report/medicare-part-d-in-its-ninth-year-the-2014-marketplace-and-key-trends-2006-2014/.

[7] Centers for Medicare & Medicaid Services. “Costs for Medicare Drug Coverage.” http://www.medicare.gov/part-d/costs/part-d-costs.html.

[8] Centers for Medicare & Medicaid Services. “Yearly Deductible for Drug Plans.”

[9] Centers for Medicare & Medicaid Services. “Costs in the Coverage Gap.” http://www.medicare.gov/part-d/costs/coverage-gap/part-d-coverage-gap.html.

[10] Department of Health and Human Services. “What Will You Find During Medicare Open Enrollment? Oct. 15—Dec. 7.” http://www.cms.gov/Center/Special-Topic/Open-Enrollment/Downloads/FINAL-Article-Medicare-Open-Enrollment-Beneficiary-2015-508.pdf.

[11] Centers for Medicare & Medicaid Services. “More Savings in the Drug Coverage Gap Coming Through 2020.” http://www.medicare.gov/part-d/costs/coverage-gap/more-drug-savings-in-2020.html.

[12] Hoadley, Jack, et al. “Medicare Part D: A First Look at Plan Offerings in 2015.” The Henry J. Kaiser Family Foundation. Oct. 10, 2014. http://kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-plan-offerings-in-2015/.

About Jenifer Dorsey

Jenifer Dorsey is a regular contributor to HealthCare.com. She has covered health insurance and health and fitness for more than five years. In her free time she is a competitive track cyclist and loves to travel, especially to places with velodromes.

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