There is a lot of confusion when it comes to Medicare Part D drug plans.
When you first look at them, they all look very much the same, but once you dig into the details of the plans, you realize there can be thousands of dollars in cost difference.
In this blog post, I am going to break down Medicare Part D plans, so you know what to look for to avoid costly mistakes.
Every year Medicare determines the type of medications every plan must cover. Some plans include extra medications, but they aren’t required to do that.
Once this approved list is released, insurance companies go to the drug manufacturers to negotiate prices. Then, insurance companies will put certain drugs in different tiers. Usually, there are five different tiers.
The first tier of medications will be the least expensive, whereas the fifth tier will be the most costly.
Choosing the right Part D plan for you depends on many factors, including the medications you are on, the tier your medications fall into, the premiums and deductibles and copays, your pharmacy, and whether or not you hit the donut hole.
There are also two other essential things to be aware of when it comes to Part D plans.
1. Prescription penalties.
The Medicare rule states:
By the time you turn 65, you must be on a creditable prescription plan, and if you aren’t, you will face penalties.
Now, most of you take medications, so it makes sense to get a prescription plan to lower your costs.
However, some people are on either no medications or just a couple of inexpensive generic drugs.
If you’re in this situation, you’re probably thinking to yourself, “well, what’s the point in getting a prescription plan when the plan will cost me more than my medications?”
As I shared before, whether you’re on medications or not, Medicare still requires you to be on “credible” prescription coverage, and if you aren’t, you will face penalties.
At that point, it comes down to a numbers game. There are certain people with higher incomes and on certain medications, who are better off facing the penalty than getting a Part D drug plan, but please be aware that this rule exists.
2. You MUST review your Medicare Part D drug plan EVERY SINGLE YEAR.
Insurance companies can change their prescription plan rules, the tiers, the prices, the covered medications, and the pharmacies every single year.
These changes usually result in significant cost differences for the upcoming year. Insurance companies must release the upcoming calendar year plan details by October 1st.
You then have from October 15th through December 7th to review all plan details to decide which plan is best for you for the upcoming year.
Please note that you don’t have to be insurable or healthy to switch Part D drug plans. Everyone can change plans every year.
You must take advantage of this!
There are massive changes that happened during this time. Just last year, we changed over 90 percent of our client’s plans and saved them hundreds to thousands of dollars. These changes can be significant.
Getting the right Part D plan is so essential to protect your savings and your health care.
To easily make the right Medicare decision you can CLICK HERE to sign up for our Medicare Enrollment Concierge.
