Medicare beneficiaries will get an opportunity to make changes to their Medicare Part D coverage between Oct. 15 and Dec. 7, 2014. Many retirees will experience premium increases, changes in covered drugs and new cost-sharing requirements if they don’t switch plans. Here’s what you should review during the annual open enrollment period so you can select a new prescription drug plan if necessary.
Covered medications. Prescription drug plans are permitted to tweak the roster of medications they cover each year, and it’s important to double-check that your current medications and any new prescription drugs you expect to use in the coming year will be covered. “The first thing people should look at is whether all of their prescriptions are on the formulary,” says Casey Schwarz, policy and client services counsel at the Medicare Rights Center, an advocacy organization. “A plan can have very low premiums, but if the drug you would like to take is not on the formulary and not covered, then it is not such a good deal.”
Premium prices. The average Medicare Part D monthly premium will increase by 4 percent to $38.83 in 2014, assuming beneficiaries remain in their current plan, according to an analysis of 2015 Part D plans by researchers at Georgetown University, the University of Chicago and the Kaiser Family Foundation. However, beneficiaries in six of the most popular Part D plans will see their premiums increase by at least 10 percent, and one Part D plan increased premiums by 52 percent. About 1.5 million beneficiaries (8 percent) will experience a premium increase of $10 per month or more, while 985,000 beneficiaries (5 percent) will experience a premium decline of at least $10. “You have to weigh the amount of the change in premiums versus the inconvenience of making a shift,” says Jack Hoadley, a health policy analyst at Georgetown University and co-author of the report. “We know that some people are looking at premium increases that can be as much as $20 a month or more. In those kinds of situations, the payoff for making a switch can be substantial. If the change in your premiums is only a dollar or two, it may not be worth making a change.”
Cost-sharing changes. Prescription drug plans change the copayments and coinsuranceassociated with covered drugs each year. For the first time in 2015, all Part D plans will use tiered cost-sharing. Most plans have five tiers, including two for generic drugs, two for brand-name drugs and one for high-cost specialty drugs. Medications in each tier have different out-of-pocket costs, ranging from copayments to passing along a percentage of the bill to beneficiaries. “There are likely to be changes in the cost-sharing amounts that plans charge for drugs, drugs taken off the formulary and new utilization management tools like prior authorization,” says Juliette Cubanski, a policy analyst at the Kaiser Family Foundation. “Even if people are happy with the coverage that they have now, it does make sense to take a little bit of time to look at your coverage and see how it might be changing and see how your needs have changed.”
Deductibles. Most part D plans (58 percent) charge a deductible, which is typically a standard amount of $320 (44 percent). However, 14 percent of plans will charge a smaller deductible next year, up from 4 percent in 2014. “Plans that do lower or eliminate the deductible typically make other changes that might actually translate into higher costs for people,” Cubanski says. “While it might look appealing not to have that deductible, if the premium is so much more expensive that you end up paying more on an annual basis, that might not be a very good value payoff for people to be making.”
Preferred pharmacies. The majority of prescription drug plans (87 percent) now offer beneficiaries lower cost-sharing requirements if they fill their prescriptions at selected network pharmacies, up from 72 percent in 2014 and just 7 percent in 2011. For example, the AARP MedicareRx Saver Plus prescription drug plan charges a $20 copayment for a preferred brand drug at a preferred pharmacy, but the cost jumps to $45 at another in-network pharmacy that is not preferred. And beneficiaries enrolled in the Humana Walmart Rx prescription drug plan pay $1 for preferred generic drugs and $4 for non-preferred generics at a preferred pharmacy, versus $10 and $33, respectively, at other in-network pharmacies. “It’s important to understand if the pharmacy where you go to fill your prescriptions is part of the network of plans with the preferred cost-sharing,” Cubanski says.
Medication restrictions. Some Part D plans require beneficiaries to get prior authorization before they will cover certain drugs, require patients to try a lower-cost drug before paying for an expensive medication or limit the amount of medication you can buy at one time. “It may be worth paying a little bit more to get the one that doesn’t include the restrictions,” Hoadley says.
Consider other options. There will be just over 1,000 prescription drug plans offered nationwide in 2015, and Medicare beneficiaries will have a choice between an average of 30 plans. You can view the coverage options in your area using the Medicare Plan Finder at medicare.gov/find-a-plan. “Each year, plans make adjustments to their premiums, their formularies and whether they have prior authorization or other restrictions on use, and what worked for a person who was taking a particular array of drugs last year may not work for them this year,” Hoadley says. “It’s worth seeing if there is money to be saved or better coverage to be acquired.”
Connie Dello Buono, Medicare Specialist AHIP Certified 408-854-1883 firstname.lastname@example.org helping Medicare families with Medicare planning.