Retirees have an opportunity to switch Medicare Part D plans from Oct. 15 to Dec. 7. Moving into a new plan for 2018 might save you money. The average premium is projected to increase by 9 percent to $43.48 for retirees who remain in their existing plan next year, according to a Kaiser Family Foundation analysis of 2018 plan offerings. Other types of out-of-pocket costs may also rise in 2018. Here’s how to find a lower-cost Medicare prescription drug plan:
[See: 10 Things You Need to Know About Medicare.]
Assess covered medications. Check to make sure your current medications and any drugs you expect to need in the coming year will be covered by each plan you are considering. “Open enrollment time is a good time of year to review your list of medications with your doctor to be sure they are all still necessary for you,” says Rita Redberg, a cardiologist and professor of medicine at the University of California, San Francisco. “And for the medications you do need, check if lower-cost generic alternatives have come out in the last year before doing the final step of finding the plan that works best for your medication needs.” Plans tweak their lists of covered drugs each year and the out-of-pocket prices passed on to patients for each type of medication.
Compare premiums. The Kaiser Family Foundation estimates that nearly three-quarters of retirees who pay their own premiums out of pocket will face higher monthly costs in 2018 if they stick with their current plan. And a third (34 percent) of these beneficiaries are projected to have a premium increase of $10 per month or more.
But most retirees have many coverage options and might be able to find a plan with lower costs. “There might be another plan that could bring your costs down by several hundred dollars, and that’s worth a few hours of your time,” says Jack Hoadley, a health policy analyst for Georgetown University’s Health Policy Institute. “It’s always worth looking to see if a different plan would be better for you.”
Medicare recipients have an average of 23 prescription drug plan choices in 2018, ranging from 19 in Alaska to 26 in Pennsylvania and West Virginia. Premiums vary widely between plans. Among the 10 prescription drug plans with the highest enrollment, average premiums range from $20.21 per month for Humana Walmart Rx to $83.68 monthly for AARP Medicare Rx Preferred, KFF found. “Do a comparison with the coverage that you have now to the coverage that other plans are offering now to see if you can save on your drug costs by switching plans,” says Juliette Cubanski, associate director of the Program on Medicare Policy at the Kaiser Family Foundation. “The Medicare Plan Finder is kind of one-stop shopping. You can type in the names of the drugs you are taking and how often you take them and you can even specify the pharmacy you use.”
[Read: Medicare Out-of-Pocket Costs You Should Expect to Pay.]
Factor in the deductible. The maximum possible Medicare Part D deductible will increase by $5 in 2018 to $405, which is significantly less than the $40 increase retirees faced in 2017. Just over half of plans with a deductible charge the maximum possible amount, but some plans have smaller or no deductibles.
Consider copayments and coinsurance. Most Part D plans have five tiers of covered medications, each with different out-of-pocket costs. The typical plan design includes tiers for generic medications, preferred generics, preferred brand-name drugs, nonpreferred drugs and specialty drugs. There are generally copays for medications on each of the generic and preferred brand name tiers, while retirees typically need to pay for a percentage of the cost of the medication for drugs on the nonpreferred and specialty drug tiers. “If your drug is on a preferred brand tier, that might come at a $40 or $50 monthly copay,” Hoadley says. “Next year that drug might be on a nonpreferred drug tier, and that might come at a coinsurance rate that might be 30 or 40 percent of the cost of the drug.”
Think carefully about gap coverage. Medicare Part D plans have a coverage gap, which will gradually close by 2020. In 2018, Medicare Part D enrollees are responsible for 35 percent of the cost of brand-name drugs and 44 percent of the cost of generic drugs purchased in the gap. Just over a third (35 percent) of plans offer additional gap coverage in 2018, up from 28 percent in 2017, typically in exchange for higher premiums. “The average premium for plans that are offering coverage beyond what all plans offer is about twice as much,” Cubanski says. “Look on the Plan Finder and get more information about whether that extra coverage in the gap is actually worth it in terms of the money.”
[See: 10 Medical Services Medicare Doesn’t Cover.]
Look for preferred pharmacies. Medicare Part D plans often charge lower out-of-pocket costs when you fill your prescriptions at preferred pharmacies. “Many plans have these arrangements where they offer lower cost sharing if you use certain pharmacies,” Cubanski says. “You can actually save money on your drugs if you are willing to switch pharmacies.”
Emily Brandon is the author of “Pensionless: The 10-Step Solution for a Stress-Free Retirement.”
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How to Pick a Better Medicare Part D Plan for 2018 originally appeared on usnews.com
