(Family Features) Whether you’re approaching age 65 or already enrolled in Medicare, the annual enrollment period for 2011’s Medicare plans is an important time. When it comes to prescription coverage, seniors are seeing some of the biggest changes since the Medicare prescription benefit became available in 2006.
The changes — from having fewer options to premium increases to new discounts on brand-name drugs — are enough to make anyone’s head spin. But, seniors who don’t take the time to research their options and choose the plan that best suits their needs could leave hundreds of dollars in annual premium savings on the table.
In fact, according to a recent study by the Robert Wood Johnson Foundation, only about 10 percent of participants change plans annually. Staying put and not investigating your options, however, could impact your overall costs. But how do you know if you have the best plan already or if you should consider a different plan? Luckily, there are a few tools that can help with the decision-making process. But first, let’s start with the basics and what is changing this year.
Access to private plans
Beneficiaries have access to the Medicare drug benefit, known as Part D, through private plans approved by the federal government, either through stand-alone prescription drug plans (PDPs) or Medicare Advantage prescription drug plans (MA-PDs). According to a Kaiser Family Foundation study in October 2010, of those who purchase Part D coverage, 38 percent, or 17.7 million beneficiaries, opt for stand-alone plans. Twenty-four percent, or 11.1 million, are enrolled in Medicare Advantage plans.
Plan options in 2011
While shopping around could save many seniors money, some beneficiaries have no option other than to find a new plan for next year. For 2011, the federal government directed insurers to eliminate duplicative Part D prescription drug plans and plans with low enrollment. That means a third fewer prescription drug plans will be offered nationwide next year compared to 2010, according to the Kaiser Family Foundation, and many of the remaining options may come with higher premiums.
And with the federal government changing the way it reimburses health plans through Medicare Advantage, some insurers have quit offering their Medicare Advantage plans for next year. If your plan is no longer being offered, you may need to find alternative coverage.
Enrollment periods
Beneficiaries have a six-week annual enrollment period — from Nov. 15 to Dec. 31 — to pick a Part D plan for 2011. For Medicare Advantage enrollees, it is especially important to pick the right plan during that period. Unlike previous years, people enrolled in Medicare Advantage plans can no longer switch to other Medicare Advantage plans during January, February and March. However, while this “open enrollment period” will not be available in 2011, after Jan. 1, enrollees can still leave their Advantage plan and go back to original Medicare.
“Doughnut hole” relief
Here’s some good news: there is a new 50 percent discount on the formulary’s brand-name drugs for those who land in the program’s coverage gap, also called the “doughnut hole.” In addition, plans will pay 7 percent of the cost for generic drugs in the gap. This applies to drugs that are on the plan’s formulary. If they aren’t on the formulary there may be no discount, so make sure you check.
How to compare plans
Each plan has different features and each person has unique prescription needs so it’s important to find the plan that is best for you. Here are some things to keep in mind:
Cost and coverage: Plans vary in the coverage offered and how much they cost. Consider the cost of premiums and whether it includes prescription coverage while in the gap.
Pharmacy: Some plans restrict where you can use your drug plan. Determine whether your desired pharmacy is included in the plan you choose. For example, new this year are some plans whose monthly premiums fall well below the average price for Part D policies. However, these lower-cost plans come with some restrictions. The copays and coinsurance for prescription drugs are lowest when using preferred pharmacies; they increase for outside pharmacies.
Formulary changes: Insurers may change drug formularies each year. Make sure you enroll in a Part D plan that covers your medications.
Other limitations: In some cases, a plan may limit the circumstances under which a drug is covered. Certain medications may only be covered after prior authorization, after you’ve tried other drugs through a process called step therapy, or in certain doses and quantities.
Comparing plans can be overwhelming, but there are easy-to-use online tools such as www.PlanPrescriber.com that can take you through a four step process to narrow down your options and identify the most cost-effective plan. If you have a low income and struggle to pay for your prescription drugs, you may qualify for the Extra Help/Low-Income Subsidy (LIS) program. For more information, go to http://www.PlanPrescriber.com/medicare-part-d/extra-help/ or https://secure.ssa.gov/apps6z/i1020/main.html. For additional resources on Medicare, go to Medicare.gov.
Though it may seem overwhelming at first, taking the time to research your best option for Medicare prescription drug coverage could really pay off.
How to maximize your cost savings
In 2011, there are lots of changes on tap when it comes to Medicare Advantage and prescription drug plans. But open enrollment is a great time to review your coverage. These DOs and
DON’Ts can help ensure you are maximizing your cost savings.
DO check to ensure your medications are still covered. Check your prescription drug plan each year because insurers may change which medications are covered. You can enter your medications on websites like www.PlanPrescriber.com to see which drugs are covered and compare the projected costs with other plans.
DO pay attention to the drug limitations in your plan. Even if your medication is on the formulary, a plan may limit the circumstances under which a drug is covered. They may only be covered after prior authorization, after you’ve tried other drugs through a process called step therapy, or in certain doses and quantities.
DO consider all your options. Medicare supplemental plans, or Medigap, have their own six-month open enrollment period, beginning the day you turn 65 and are enrolled in Medicare Part B. The enrollment period for Medicare Advantage and stand-alone prescription drug plans is Nov. 15 to Dec. 31 2010.
DON’T go on auto-pilot. Many plans change cost and drug coverage annually. What worked last year for you could cost you more money this year in terms of higher prescription drug costs and other out-of-pocket expenses.
DON’T be afraid to ask for help from qualified professionals. You can get help through your State Health Insurance Assistance Program (SHIP), PlanPrescriber, licensed health insurance agents who are certified to sell Medicare, family members or by calling 1-800-Medicare.
DON’T think that stable premiums = stable coverage. Just because your premiums haven’t gone up doesn’t mean that you are getting the same plan for the same price next year.
