Comparing Medicare Prescription Drug Plans
Once you've decided to enroll in a Medicare Part D prescription drug plan, the next step is figuring out which plan is the best one for you. It's not easy. Private companies offer Part D plans, and there are nearly 1,000 plans nationwide and probably dozens in your state. You can use an online comparison tool, but making sure you arrive at the best choice also requires knowing your prescription needs and budgeting skills as well as understanding the cost structure of Part D plans. Before you start working with an online plan finder tool, there are several factors to consider.
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Monthly Premiums
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You will be responsible for paying a monthly premium. The premium charged depends on the coverage offered within the plan. Paying a higher premium will not necessarily guarantee you more cost-efficient coverage. You may be paying for coverage you won't need or for a plan that doesn't include one of your important prescriptions.
Coverage Points
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Take a crash course in Part D coverage packages. Medicare specifies a standard Part D drug benefit structure, though not the particular drugs to be covered. All plans must offer a package that is at least as valuable as the standard benefit structure. The package employs four annual coverage points: the deductible (you pay 100 percent of no more than the first $310 for 2010), the initial benefit period (plan pays 75 percent of the next $2,520), the "doughnut hole" (you pay 100 percent of the next $3,610) and the catastrophic level (you pay only $2.40 a month for each generic drug prescription and $6 for brand name drugs once your total out-of-pocket costs hit $4,550).
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Supplemental Coverage
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Plans can offer coverage within each coverage point that lowers your out-of-pocket drug costs---for example, $0 deductible---if you're willing to pay a higher monthly premium. Besides lowering or eliminating the deductible, a common supplemental offering is coverage within the doughnut hole. If you know your drug costs will reach the catastrophic level, buying coverage to lower your costs within the doughnut hole may help you budget each month's drug costs more effectively.
Drug Coverage
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Make a list of all the drugs you take regularly. Check to see if the plan you are considering covers your drugs at the strength designated by the prescription, and make sure you know the number of days covered for each prescription. It is possible to request an exception if one of your drugs is not listed in the plan's formulary (list of prescription medications that a drug plan pays for), but usually it's better to stick with plans that include all of your prescriptions.
Utilization Tools
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Some plans may require prior authorization before they will pay for one of your medications, and some plans require "step therapy," which means some other medications must be tried before coverage will be allowed for the brand name your doctor prescribed. Although the premium could be lower, the control exerted by the insurance company or the inconvenience of prescription authorization may offset the savings.
Pharmacies Included
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Make sure you know which pharmacies the plan allows and whether there is a price differential among the pharmacies included in the plan. Some plans don't allow mail-order prescriptions; others require it.
Time to Compare
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Grab your list of drugs and head for an online plan comparison tool. The one on Medicare's website (see Resources) not only allows you to compare plans, but you will be able to sign up for the one you choose without leaving the site. In addition to showing you the benefits for each coverage point, the Medicare plan finder computes your total annual cost, including premiums. But if you want another opinion before you complete your decision, there are other online comparison tools (see Resources).
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