For those of you with Medicare D prescription drug coverage, it’s time again to select a plan for 2016. October 15 through December 7 is known as open enrollment. This is the one time of year where you can make changes to your prescription drug coverage. Typically, all the policies begin January 1 and end December 31. Therefore, now is the time you have to begin the process of deciding what plan you will take.
It is important to understand you can’t just automatically assume the coverage that you had last year will be the plan you should choose this year; unfortunately, it doesn’t work that way. Even if you have been happy with your current plan not only do plans change but also the prescriptions you’re on may also change. Therefore, it is important that you just don’t automatically renew your old coverage, you start fresh. After all there can be a plan that offers you better coverage at a more affordable cost.
In doing your research, it is important to recognize that husband and wife should not necessarily have the same prescription drug plan. After all, your prescriptions can be totally different and there could be a considerable savings by using different plans. Therefore, don’t assume the plan that is good for one of you is good for both of you. You need to do your research individually.
What many people tend to do when they shop for a plan is take the one that has the lowest premium. Although I’m always in favor of lower costs, there’s more to your total cost than just the premium. What you also need to consider is your out-of-pocket costs. In other words, what share of the cost of the drug you will have to pay. Some insurers are charging customers as much as 30 to 50 percent of the cost for a specialty drug. Therefore, in shopping around for a plan, pay particular attention to the out-of-pocket costs that you can incur. This year, many insurers have switched their plans from a fixed dollar co-payment to co-insurance. What this means for you is that your co-insurance could be as much as 20 to 40 percent of the cost of the drug as opposed to in the past, when your co-pay was a fixed dollar amount. In addition, some insurers are imposing greater restrictions on brand name drugs. Thus, if you’re taking brand name drugs, you have to take that into consideration when making your decision.
One of the best places I find to start your search is Medicare’s Plan Finder. If you go to www.medicare.gov/find-a-plan, you can type in your zip code and the drugs and dosages you’re on and you will be able to see the various plans, their premiums and the total out-of-pocket cost for your specific drug.
I wish I could tell you an easy way to search for the best Medicare D Drug Plan, but I can’t. Unfortunately, the system is not made to be easy. However, you have plenty of time to do your research for your new Medicare Prescription Drug Plan; however, we all know how fast time goes. Therefore, my advice is to begin your research as soon as possible. One last note and that is, don’t get caught up in the advertising that will come your way. Do your own research and make sure you pay attention to your individual situation.
Good luck!
Rick is a fee-only financial advisor. His website is www.bloomassetmanagement.com. If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com.