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AARP: Beware of Hidden Charges During Part D Open Enrollment


December 16, 2008

Contact: Jim Dau or Jordan McNerney 202-434-2560 OR  

WASHINGTON—With just over two weeks remaining to choose a Medicare prescription drug plan for 2009, AARP is urging older Americans to beware of extra charges they may face with some plans. Under a rule implemented this year called “reference-based pricing,” plans in Medicare’s prescription drug program—known as Part D—may add additional penalties when beneficiaries choose brand name drugs over generics. However, the Medicare Prescription Drug Plan Finder web site at does not include these charges when estimating a person’s total drug costs for the year.

AARP has called on the Centers for Medicare and Medicaid Services (CMS) to immediately update the Prescription Drug Plan Finder to reflect all of the costs consumers may face for their prescription drugs. AARP is asking for a special enrollment period to allow those in plans with reference-based pricing to make a more informed decision about their prescription drug coverage. The Association is also asking CMS to eliminate the use of reference-based pricing in Part D plans.

“The Medicare Plan Finder is an important tool for beneficiaries as they shop for and compare prescription drug plans,” said Cheryl Matheis, AARP Senior Vice President for Health Strategy. “Medicare has failed to inform consumers about all the increased costs they may face next year. We all have a right to know what we are paying for our health care.”

AARP is also urging older Americans and their families to review their plan options before December 31 to get the most value from their Part D plan. Matheis noted: “Now is the only chance for people in Medicare to choose a new prescription drug plan for next year, and it’s important for everyone to do their homework. In this economic crunch, Americans are looking for value in everything they buy—health care should be at the top of that list.”

When choosing a plan, AARP recommends considering the four C’s:
• Coverage: Enter all of your medications in the Medicare Prescription Drug Plan Finder. Look for plans that cover as many of your medications as possible to hold down your out-of-pocket costs. If you have high drug costs, consider a plan with coverage in the coverage gap or “donut hole.”
• Cost: Compare the costs of the plans that offer coverage of your drugs. Be aware that costs associated with reference-based pricing are currently only noted by a footnote in the Plan Finder.
• Convenience: Look for plans that are accepted at nearby pharmacies or have mail order options to save time and money. If you plan to use a mail order pharmacy, be sure to compare the prices in the mail order column.
• Customer Service: Compare the ratings found on the Plan Finder, and talk to your doctor, pharmacist or friends about their experiences with specific plans.

AARP has resources available at to provide more information on choosing Medicare prescription drug coverage, including information on which plans use reference-based pricing. The web site can also help you find out if you are eligible for extra help with your prescription drug costs through the Part D Low-Income Subsidy.

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