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Andrew Smith

Andrew Smith

How to Choose a Medicare Prescription Drug Plan in 5 Steps

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How to Choose a Medicare Prescription Drug Plan in 5 StepsKeep in mind that the prescriptions covered and the fees you pay under Plan D can change from one year to another.

When it comes to your prescription medication coverage, it doesn’t matter if you’re new to Medicare or a current member preparing for the yearly open enrollment period, which runs from October 15 to December 7.

Medicare prescription drug coverage provided by private insurers under Medicare Part D. A stand-alone Part D insurance or a Medicare Advantage plan with Part D coverage are the two options available for getting Part D coverage.

Stand-alone Part D plans can be purchased to aid with prescription drug expenses by people with Original Medicare (government-administered parts A and B). Many commercial insurance organizations administer Medicare Advantage plans, which include Medicare Part D coverage for prescription drugs.

Medicare Advantage plans that do not include Part D coverage, such as medical savings account plans or some private fee-for-service plans, normally do not allow enrollees to acquire separate Part D coverage. A permanent late-enrollment penalty may be imposed if you later decide to switch to a plan that includes Part D coverage.

The medicines that are covered and the costs that you pay for those prescriptions can vary from plan to plan, so it’s vital to be aware of this information.


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What Medicare Part D covers

Generic and brand-name medications are covered under Medicare drug programs. Medicare stipulates a minimum level of coverage for all plans. This implies that all plans must cover the same classes of pharmaceuticals, such as those for high blood pressure, cholesterol, or asthma, but plans can select which individual drugs are covered in each class of drugs.

The drugs that are covered by a Medicare Part D plan are determined by what is known as a formulary. Your medication may not be included in a specific formulary, but a similar option may be.

In the same way that formularies differ from plan to plan, so does the cost of your medications. Because of this, it’s imperative that you properly examine all of your possibilities before making a final decision. Sue Greeno, an advocate with the Center for Medicare Advocacy, adds that “too frequently people just continue with the coverage they have even when there may be better, less expensive alternatives out there.” You can use these five stages to help you in your quest.

prescription drug costs1. Stay up to date with your current plan

Your plan will send you an Annual Notice of Change in early October of each year. In addition, you can find this on the website of your insurance provider. Read this text carefully and look for the following key information:

Changes in the drug formulary

The fact that your medication is covered by your Part D plan does not guarantee that it will be covered in the future. Formulas are always changing. Find out whether any of your prescription medications are being restricted or substituted in your insurer’s Annual Notice of Change.

Changes in cost

Your insurance company may be making changes to the cost of drugs that it covers. Cost sharing, coinsurance, and deductibles are all variables that might shift at any time. For example, brand-name medications typically have higher copays than generics under most plans. To see if any of the drugs you are taking have changed tiers and how it will influence your out-of-pocket payments, check with your insurance company.

Please get in touch with your insurance provider if you have any concerns or questions about the Annual Notice of Change (ANN).

2. Use Medicare.gov to find plans

You should take advantage of the yearly Medicare open enrollment period to search around for the best best medicare drug plan coverage for you because plans can change and new plans are available (Oct. 15 to Dec. 7).

The Medicare.gov comparison tool may be of use. If your medications are covered, what pharmacies are in network near you, and what your total out-of-pocket expenditures, including copays and deductibles, will be, the tool contains features that make this information clearer and easier to find and understand.

If you’re having trouble using the comparison tool, here are some helpful hints:

Enter your drugs

For both stand-alone and Medicare Advantage searches, you can enter the names and dosages of your medications using this tool. A My Medicare account means that drugs you have previously entered will be re-entered.

As soon as you see a list of plan options, they’ll be ranked by total medication expenses, which includes both the deductible and coinsurance. You can check the plans to discover if and at what cost your medications are covered.

Note: There is no guarantee that a plan will cover all of your medications just because you include them in the search. Make sure your prescriptions are covered by each of the plans in your search by digging further into the search results.

Choose your pharmacies

Entering your medications will prompt a search for pharmacies in the immediate area. You may want to consider mail-order as an option. You can use the tool to look up nearby in-network pharmacies by name, but it will also present a list of nearby pharmacies that are part of the network. You can use an interactive map to find pharmacies that may have lower prices if you’re willing to drive a little further. Because drug copays might vary widely from pharmacy to pharmacy, Greeno advises using this tool.

Compare Part D vs. Medicare Advantage

Toggle between Medicare Part D stand-alone plans and Medicare Advantage Part D plans in your area using the link at the top of the results page. Part D plans can now be compared more easily to Medicare Advantage plans that include prescription medication coverage.

Note: Note whether or not all costs have been included in the summary and whether or not others will be added in the future.

Check for pricing tiers

In many insurance plans, copays for brand-name pharmaceuticals are higher than those for generics, and copays for some categories of pricey drugs are even higher. Also, there are tiers for special needs and high-priced medications; the current, lower-priced pricing for insulin. Varying plans have different tiers and prices for different medications.

Consider the tier system when making a pricing selection. While a low-premium, high-deductible plan may be the most cost-effective for those who solely use generic medications, it isn’t for everyone. However, if you have a lot of out-of-pocket prescription medication costs, you may want to consider a plan with a smaller deductible and higher premium.

prescription drug plans3. Look for other restrictions

Prescription drug coverage may include additional limits in addition to tier pricing.

Coverage caps

Some insurance companies impose monthly and other volume restrictions on the number of pills they will cover for a given medication under their coverage caps. Most of the time, this is a good solution. Even though the bulk mail-order option may no longer be available, some people may still need to consult with their doctor for lower-cost alternatives.

Step therapy

“Step treatment” was made available to Medicare Advantage plans in 2019. Patients must first attempt cheaper medications before they can move on to more expensive ones.

There are many people who benefit from modifying their lifestyle or taking less-expensive, but no less effective, medications. Step treatment, on the other hand, can postpone a patient’s access to acute care. When step therapy is part of your treatment plan, you need to know about it and express any concerns to your doctor.


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4. Understand the exemption process

It is not uncommon for patients to experience a change in their health later in the year that necessitates the use of prescription medications not covered by their insurance plan’s formulary. If a patient’s insurance plan’s formulary doesn’t offer the drug they need, they may need to switch to a more expensive or less effective alternative.

In these instances, registrants can apply for an exemption with the help of their doctors. Most insurance companies will give the exemption, according to Greeno. However, sufferers must jump through yet further hoops. Examine the Part D plans you’re considering to see how they handle this process.

out of pocket costs5. Ask for help

Even those with a limited need for medication may find it difficult to compare the many possibilities. The State Health Insurance Assistance Program (SHIP) in your area may be able to assist you with the application process. Check with your local senior center, as Greeno says. Frequently, employees may assist with open enrollment questions or point you in the right direction.

The parts of Medicare

Find out more about the various elements of Medicare and what they cover by reading this guide.

  • Medicare Part A (hospital insurance).

  • Medicare Part B (medical insurance).

  • Medicare Part C (Medicare Advantage).

  • Medicare Part D (prescription drug plan).

  • Medicare Supplement Insurance (Medigap).

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