Premiums do not accurately indicate annual out-of-pocket for 2017
For 2017 plans, the benefit of paying less for a monthly premium may not outweigh the annual cost of medications you depend upon. I urge you to take the time to visit Medicare online and learn more before you choose. If you stick with me, I’ll go into how you can access the Medicare Plan Finder on the Medicare.gov website. But, before I can do that, I want to explain the reason behind my concern. If you had planned to default to your 2016 plan under the assumption a small change in your premium would be the only adjustment you’d make, you may be very disappointed.
Year-to-year costs of popular drugs are seeing major increases for the upcoming year, and Part D plans have changed the structure of their drug pricing in response. If you aren’t careful about picking a plan, or if you have added any medications this year, you could see jaw-dropping increases. For example, a co-pay for one single drug went from $7 to $350.
Several trends among insurers have made surprising shifts in cost sharing for beneficiaries possible. Some of the reasons you may be seeing this is because of:
- Tier shifting: more and more sophisticated drugs, for which there is no generic, and shifting of generic drugs from lower, less expensive tiers to higher, more costly tiers.
- Plans are charging coinsurance: a percentage of the full cost of a drug instead of set co-pays which are flat rates like $20, $45, or $60 dollars for any drug on a specific tier.
- Pressure on Medicare to keep premiums down.
Instructions for using the Medicare Plan Finder
Before starting, make a list of drugs you take. Then, access the Medicare Plan Finder by clicking here.
You’ll see prompts like the ones listed below:
- Step 1: Enter Your Information
You can perform either a general or personalized search with your own information. A personalized search will allow you to enter your zip code, Medicare number, last name, and date of birth, while a general search will only require a zip code for plans offered in your area. You will also be able to enter whether you have a Medigap policy (aka Medicare Supplemental Insurance) or if you receive any help from Medicaid or SSI (which might make you eligible for extra discounts in Part D).
- Step 2: Enter Your Drugs
Enter the list of drugs you have written down. You will be prompted to select the dosage, quantity, frequency, and whether you get your medicine from a retail or mail order pharmacy. Before entering, you will have the ability to select a lower cost generic for the drug if it is available.
- Step 3: Select Your Pharmacies
You can select up to two.
- Step 4: Refine Your Plan Results
You will be made aware of how many plans are available to you in your area, based upon the information entered. These plans can be narrowed down, dependent upon the type of coverage you need and the types of factors you’re looking for.
Additionally, on each of the plans, you will see “Lower Your Drug Costs.” Once selected, you will have an opportunity to select cheaper versions of the drugs you originally input based upon their projected annual cost. (Only do this for drugs where you know you could take either.)
When comparing plans, you want to focus on the heading “Estimate of What YOU Will Pay for Drug Plan Premium and Drug Costs.” This amount is what should be used to compare to what you spent last year, and what you’re budgeting for this coming year.
When I performed this exercise, I entered medications for a variety of needs such as: lowering cholesterol and high blood pressure, treating Type II Diabetes, as well as an anti-depressant—all fairly common prescription medications. In each case, when comparing plans in my area, the cheapest premium did not correlate to the least amount paid for annual out-of-pocket. In fact, in nearly every comparison, the most expensive premium often was paired with an annual out-of-pocket expense several hundred dollars less than other plans with cheaper premiums.
More than ever, this year, it does not make sense to stay with the same plan as you selected last year without comparing. And the best news is: it’s not too late! Enrollment is still open through Wednesday, Dec. 7, 2016.
AARP Medicare Resource Guide: Understanding Your Prescription Drug Coverage
Save on drug costs: See if your income makes you eligible for extra help