Open Enrollment for Medicare Prescription Drug Plans (Part D) starts October 15 and runs through December 7, 2016. During this time, you can enroll in a new plan for the 2017 calendar year. This will be welcome news to many who are considering changing to a more affordable plan for the coming year.
Current Medicare Part D enrollees will likely have received, or will soon receive, a renewal packet from their existing plan carrier. This packet will describe any changes to their current plan for next year. These changes may include premium increases, adjustments in covered drugs, revised copays, coinsurance or deductibles, drug restrictions, network pharmacy changes, and more. I encourage you to read this information carefully to understand how these changes will impact your out-of-pocket costs for 2017.
To review all plans, the Medicare Plan Finder is an excellent tool that ranks plans based on your personal drug needs. The webpage includes a step-by-step video to guide you through the process of evaluating and choosing a plan.
For those who would like our assistance in sorting out options, making recommendations, and assisting with enrollment, we will again be offering our fee-based consulting service. Please read our Part D Annual Letter, complete the 2017 Prescription Drug Form and follow the instructions. For a better understanding of Medicare Part D, please visit our webpage, Medicare Part D.
The Question Column: Part D Plan Highlights
Q: This year’s Medicare Part D Prescription Drug program open enrollment runs from October 15 through December 7, 2016. Can you give us some background and highlights about the program?
A: Here are a few important highlights about the program.
Medicare Part D is voluntary. You are not required to enroll in a plan. If you do enroll, there are no restrictions on pre-existing conditions. This means you can’t be refused coverage based on your health, no matter how many medications you take or how expensive they are. You can change plans every year to meet your changing prescription drug needs.
All plans have four standard benefit levels. For 2017, Medicare has set the benefit level parameters as follows:
- The Deductible ranges from $0 – $400. The deductible can’t be higher than what Medicare allows. Plans are free to offer a lower deductible and many plans do. Some have no deductible at all.
- The Initial Coverage level is the period after the deductible is met. During this period, the plan provides benefits in the form of coinsurance or copays until you and the plan have spent $3,700 in total prescription drug costs.
- Once you and the plan have spent $3,700, you leave the initial coverage level and enter the Coverage Gap or “Donut Hole” until you reach the yearly out-of-pocket threshold of $4,950. Though very few plans provide benefits during the coverage gap, there are substantial discounts* provided for brand name and generic medications by the plan and drug manufacturers.
- The last level is Catastrophic Coverage, which starts after your out-of-pocket drug expenses reach the $4,950 threshold and runs through the remainder of the calendar year. In this stage, your drug costs are reduced to very low coinsurance or copays until the end of the calendar year.
* In 2017, Part D enrollees will receive a 60% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole; however, the additional 10% paid by your Medicare Part D plan will not count toward your out-of-pocket. Enrollees will pay a maximum of 51% co-pay on generic drugs (49% discount) purchased while in the coverage gap. Only the 51% copay paid will count toward your out-of-pocket.
A Few Warnings:
- There is no guarantee that the plan you choose will cover the medication prescribed to you during the plan year and, with few exceptions, can you change plans during a plan year for that year.
- If you choose not to enroll in Part D plan but decide to enroll later, you may be penalized by not enrolling when you could have. Though the penalty isn’t much to start, it increases the longer you are without coverage and remains for as long as you have a drug plan.
- In addition to the penalty, deciding to enroll later means waiting for the next annual open enrollment period (October 15 – December 7, 2017) to enroll for a January 1, 2018 start date. This means you could be without prescription coverage for many months and find you may suddenly need it.
A Closer Look: Avoiding the Medicare Part D Donut Hole
If your share of costs spike during a plan year, it may mean you have reached the Coverage Gap, or “Donut Hole”. This would be the result of reaching the Initial Coverage level threshold for total drug costs ($3,700 in 2017). Here are a few suggestions to delay, or avoid, reaching this gap during the next plan year:
- Research the medications you are taking and discuss generic or lower cost brand name alternatives with your doctor(s).
- Obtain your plans formulary drug list and bring it to doctor visits. If drugs are prescribed, you can review those covered by your plan with your doctor and consider generic alternatives. Formulary lists have drugs in alpha order and by classification for easy look-up.
- Consider a different pharmacy. The competitive model on which the Part D program was designed allows for price discounting by plan sponsors. Prices may vary significantly from one pharmacy to another.
- Choose an appropriate plan. With over twenty plans available, each with different drug formularies and pricing, it’s a good idea to evaluate plans every year to stay current. Medicare’s Plan Finder tool allows you to enter your medications, dosages, and quantities, as well as your preferred pharmacies. You can save your work using a plan ID and password date for future access.
You can evaluate your plan options by visiting Medicare’s webpage, Medicare Plan Finder. On the same webpage you’ll find a Video Overview on how to complete a plan search, compare plans, and enroll in one that best meets your needs.
You can also contact us and we’ll do the research and prepare recommendations for you. To learn more about our Part D consulting services, please contact us by phone 415-898-0212 or by e-mail at email@example.com.