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Part 5: Choosing a Part D Drug Plan

How to find the one that's right for you

En español l To get Medicare drug coverage, you must sign up for one of the private drug plans approved by Medicare. You have many to choose from — all with different costs and benefits — wherever you live.

In most cases, the plan you choose will be the one you have to stay in for the entire calendar year (or the rest of the year if you’re new to Medicare and joining a plan partway through the year). So it’s wise to compare plans carefully to find the one that best meets your needs. Even if you’re already in Part D, making a careful comparison between the plan you have now and alternatives available to you for next year is the only way to ensure that you continue to receive the best deal for you.

How can I find out what different plans offer?

You will receive many promotions from Medicare drug plans in your area. The plans available to you are also listed at the back of the official “Medicare & You 2010” handbook that you receive in September. But neither the marketing promotions nor the handbook provides enough details to make an informed decision. To make a real choice and find the plan that suits you best, you need to compare plans point by point, as explained below.

How can I pick just one plan from so many choices?

You need to compare them according to the drugs that you take. It’s the specific drugs you take (and not the amount of the premiums or deductibles) that most determines what you will spend out of pocket under any plan. (In fact, the plans vary enormously in the copays they charge, even for the same drug. In some cases, the same drug can cost more than $100 for a 30-day supply in one plan than in another.) The most effective way to make a comparison is to use the online tool on Medicare’s website.  Click on “Find health and drug plans” on the home page. Then enter your ZIP code and the exact names of all the drugs you take, their dosages and how frequently you take them. The results will show which plans cover your drugs and your likely out-of-pocket expenses, month by month through the whole year.

You can also call the Medicare hotline at 800-633-4227 and ask a customer service representative to do a similar search and send you the results by email or regular mail.

I’m already in a Part D plan that suits me. Why should I bother comparing plans again at the end of the year?

Because the plan that’s best for you this year might not be the best next year. Part D plans can change their costs and benefits every year, and most do. These changes may include premiums, deductibles, copays, the drugs they cover and whether they offer any coverage in the doughnut hole.

In September, look for an important letter from your plan headed “Annual Notice of Change.” Read it carefully for details of how your plan will change next year. (The plan must get this notice to you by Sept. 30. If you haven't received it by then, call the plan and ask for it. If it still doesn't arrive, call Medicare at 800-633-4227 to file a complaint.)

To ensure that you get your best deal next year — a plan that covers all your drugs at the least cost and with fewest restrictions — you should carefully compare the plans available to you for next year during the open enrollment period from Oct. 15 through Dec. 7. Ideally, make a search through the Medicare Prescription Drug Plan Finder, as explained above. Or call the Medicare help line at 1-800-633-4227 and ask a customer service representative to make the same search.  Or contact your state health insurance assistance program (SHIP) for personal help.

How do I compare “stand-alone” drug plans with Medicare Advantage (MA) plans?

The critical question is what kind of medical services you want. These are points to consider:

  • Traditional Medicare doesn’t include drugs, so you’d also need to join a separate stand-alone plan (which covers only drugs) to get drug coverage.

  • Most MA plans offer medical and drug coverage as a comprehensive package, but not all plans cover drugs.

  • Joining an MA plan means receiving your Medicare health benefits through the plan and accepting its terms and conditions.

  • Most MA plans are HMOs or PPOs, which require you to go to the doctors and hospitals in its regional network or pay more to go out of network. (Two other types of MA plans, known as Private Fee for Service and Medicare Medical Savings Accounts, which are not available everywhere, have different arrangements.) Traditional Medicare allows you to see any health providers that accept Medicare patients, anywhere in the country.

  • You cannot be in a stand-alone drug plan at the same time as being enrolled in an HMO or PPO type of Medicare Advantage plan, even if the MA plan does not include drug coverage. However, if you join a Private Fee-for-Service health plan or a Medicare Medical Savings Account plan that doesn’t offer prescription drugs, you can enroll in a stand-alone plan to add drug coverage.

  • If you’re already in a stand-alone drug plan and join an MA plan that provides drug coverage, be aware that your enrollment in the stand-alone plan will be automatically canceled.

  • If you’re already in an MA plan, be aware that joining a stand-alone drug plan will automatically cancel your MA plan coverage and re-enroll you in the traditional Medicare program.

  • If you have health coverage from a former or current employer or union, joining an MA plan could automatically cancel your present coverage. Make sure you know the consequences to your (and your dependents’) health coverage before joining an MA plan.

So deciding first how you prefer to have your medical care delivered will considerably narrow your choices. You can compare MA plans at the Medicare website. Enter your ZIP code and follow the instructions.

What if I can’t find a plan that covers all my drugs?

Find a plan that covers most of your drugs, especially expensive ones. Then talk to your doctor to see if any of the others can be switched to similar drugs that are covered by the plan. Also, your specific medical condition may qualify you for an exception that pays for a drug not on the plan’s formulary. Once you’ve joined a plan, you can appeal for an exception with your doctor’s support. For details, see Part 1 of this guide.

What else is important to look at when comparing plans, besides coverage, premiums, and copays?

A plan may cover your drugs, but it’s also important to find out whether any of them come with restrictions. This means that the plan won’t cover specified drugs until you’ve met certain conditions. These restrictions — Prior Authorization, Step Therapy, or Quantity Limits — and how you may be able to get them waived are explained in Part 1 of this guide.

Remember: Although all Part D plans impose restrictions on some drugs, they don’t all restrict the same drugs. Before enrolling use the Medicare plan finder or call Medicare or call your chosen plan itself to find out what, if any, restrictions it places on your drugs.

Should I consider a plan that gives coverage in the doughnut hole?

You need to compare plans carefully according to the specific drugs you take to see whether the plans that offer coverage in the doughnut hole are worth the extra premium costs — especially now that you get big discounts in the gap and can buy cheaper generic versions of many of the expensive blockbuster drugs, such as Lipitor and Plavix, that used to be so expensive.

What if I use few or no drugs right now?

A plan with the lowest premium in your area would keep your costs to a minimum while providing coverage you might need later on.  A plan with a zero deductible would cover even very low drug costs immediately.

How can I tell if my local pharmacies are in a plan’s network?

It’s important to choose a Part D plan that has network pharmacies that are convenient to you, because once enrolled you’ll pay more (perhaps even full price) if you buy your drugs from one outside its network. You can find this information before enrolling when comparing plans on Medicare’s Prescription Drug Plan Finder. It also shows which pharmacies are “preferred” by your plan, meaning prices may be lower there. Once enrolled in a plan, you’ll receive a list of the plan’s network and preferred pharmacies.

How can I tell whether a plan will give me good service?

Medicare rates plans on various measures — for example, the quality of their customer service, the accuracy of their drug pricing information and their responsiveness to complaints and appeals — as a result of surveys and consumers’ feedback. Ratings are on a scale of one to five stars, with one star being poor and five stars excellent. You can find these ratings only on the online plan finder on Medicare’s website as explained above.

What if I live in different states during a year?

A Part D plan that has in-network pharmacies nationwide will cover you throughout the United States. If a regional plan offers mail order services, your drugs could be sent to a temporary address in another state — but make sure the plan allows that option.

Should a married couple choose the same plan?

Not necessarily. Each spouse should consider plans separately, according to the drugs she or he takes. There are no price breaks for a couple joining the same plan.

Who can help me make these decisions?

For free, personal help in making decisions about Part D, call your state health insurance assistance program (SHIP).

Patricia Barry writes the AARP Ask Ms. Medicare column and is the author of  Medicare for Dummies, 2nd edition (Wiley/AARP, September 2015).