How to Compare Medicare Part D Plans: A Beginner’s Guide
Prescription drug coverage can sometimes feel overwhelming. I know — I recently navigated an authorization process for my teenage son’s acne medication that took several phone calls and 10 days to complete. And I’m not alone in feeling stressed about prescription coverage — according to a recent survey conducted by Walgreens, 37% of the more than 31.5 million people enrolled in prescription drug plan Medicare Part D worry about their prescription drug costs. And 20% say they’ve made sacrifices to help manage costs, such as delaying the filling of a prescription or skipping doses.
Moreover, while most beneficiaries surveyed say they have a clear understanding of their current plan benefits, many don’t understand that there can be several differences between plans. Only half realize that copay amounts may vary by pharmacy. And 24% are not sure whether their plan offers a preferred pharmacy option, which can offer cost savings above and beyond network pharmacies. Although Part D Plans must meet certain standards, these plans are not all the same. Nationally, there are hundreds of different plans. But thankfully, you do not need to compare this many — there are generally 20-30 plans available in a given service area.
In short, if you have Medicare Part D, you might be paying more than you need to. This article can help you understand plan features relating to coverage and cost so you can make an informed plan decision.
Here are cost factors to consider when you compare Medicare Part D plans.
You pay a fixed monthly premium for your Medicare Part D Plan.
You must reach the annual deductible before the plan covers any of your prescription drug costs. Some plans have a deductible of $0, so initial coverage starts immediately.
You share in the costs of your prescription drugs with the Part D Plan by making a copayment (set amount for each prescription) or paying a coinsurance amount (a percentage of the cost of the drug).
Each plan has a formulary, or list of drugs covered by the plan.
Within the formulary, drugs are assigned to tiers. Cost-sharing arrangements (either copayment or coinsurance) are based on the drug tier. Typically, there are tiers for preferred and non-preferred generic drugs, preferred and non-preferred brand-name drugs, and specialty drugs.
Part D Plans may have a list of pharmacies inside their networks. Prescriptions may be covered only if you use a network pharmacy.
Some plans have preferred pharmacies that offer lower prices, beyond the plan savings available at network pharmacies. Using a preferred network pharmacy may potentially save beneficiaries hundreds of dollars per year in copay costs.
The gap — also known as the “donut hole” — in coverage happens when you reach a certain amount in prescription drug costs ($2,970 in 2013). After that point, you must pay out of pocket until you reach the minimum for catastrophic coverage. Some plans offer special discounts when you are in the coverage gap. (Note that the Affordable Care Act has provisions to close this gap — see details at healthcare.gov.)
There are many quality factors to consider when choosing a plan. Medicare rates plans based on a five-star system, taking into account:
- Responsiveness to pharmacist calls
- Timeliness in handling appeals
- Complaints about the drug plan
- Ease of getting prescriptions filled
- Accuracy in providing drug pricing information to the Medicare website
To use the Medicare tool, having the following information is useful (but not required) to finding and sorting through your options:
- Your zip code, which helps find plans offered in your area plus gives you cost information by pharmacy
- Your Medicare number for a personalized search of plans
- The type of Medicare coverage you have and the type of assistance, if any, that you receive
- Names of prescription drugs you currently use along with dosage amounts, quantity per prescription, refill frequency, and whether the drug is filled at a retail or mail-order pharmacy
- Your preference among a list of nearby pharmacies (you can choose two pharmacies at a time to compare Medicare Part D costs)
By following the prompts, you will get a list of plans available in your area. You can screen the plans in various categories; for example, ask to see only those plans with your prescription drugs on their formulary by selecting “have all my drugs on formulary” under “Select Drug Option.”
Choose plans from the results to compare details including monthly premiums, deductibles, estimated annual costs of drugs at a retail pharmacy, and ratings. Note that drug costs are listed by pharmacy name and vary depending on the pharmacy’s status within the plan.
Comparing plans is not simple, though the interactive tool provided by Medicare is extremely useful. To further help Medicare Part D participants understand their plans and control costs, Walgreens has launched the You’re Worth Savings initiative to educate Medicare beneficiaries on ways to get the most from their plan and save as much as 75% on prescription drug costs using three easy steps:
- Review your Medicare Part D plan.
- Talk to a Walgreens pharmacist about cost concerns and ways you might be able to save. You can schedule a free appointment directly online.
- Compare copay and other costs against your current plan and pharmacy.
Armed with an understanding of Part D Plan costs and terminology plus knowledge about your specific plan, you can have a meaningful and enlightening conversation with a pharmacist about possible ways to save money on prescription drugs.
Below are more detailed results from the Medicare survey. Are you surprised by these findings?
This post was made possible by support from Walgreens. Walgreens is in the network of hundreds of Medicare prescription drug plans and participates in the preferred networks of four national Part D sponsors. The company offers savings of up to 75% on prescription copays over select pharmacies for a number of plans in which it is a preferred pharmacy.