Key factors in evaluating Medicare Part D plans

More than 1,100 Medicare prescription drug (Part D) plans are available for 2011. Most consumers have about 33 plans to choose from in their area during annual enrollment, which is Nov. 15 to Dec. 31. However, Part D plans with the lowest premiums may not be the best match for Medicare beneficiaries' individualized needs, according to Allsup, a nationwide provider of Social Security disability representation and Medicare plan selection services.

“You are going to be able to make a more informed, confident decision on your prescription drug coverage if the information you are using is reliable and comes from an objective, third-party resource”

"People tend to look at the Part D plan's premium because it's the easiest thing to compare, but it's not necessarily a realistic reflection of the true cost," said Adrienne Muralidharan, senior Medicare specialist for the Allsup Medicare Advisor^®. The Allsup Medicare Advisor is an impartial Medicare plan selection service that helps people understand and choose the most affordable and appropriate Medicare coverage for their healthcare needs. (Allsup is not a Medicare plan provider.)

"Looking only at the prescription drug premium is like looking at a car's sticker price. The cheapest car could have awful gas mileage, excessive maintenance costs and a design that does not match your needs," Muralidharan said. "The same goes for prescription drug plans. You need to look at all the components that add cost or provide value before you can make an informed decision."

According to Muralidharan, key factors when evaluating Part D plans include:

1. What are all the costs involved? In addition to the premium, these costs can include deductibles and co-payments. For example, a plan with a $33 monthly premium may seem like a bargain. However, if that plan has a $310 deductible and a $20 co-pay for each medication, the costs for multiple prescription drugs quickly rises. Another plan with a $50 premium, a lower deductible and no co-pay could actually save you money.

2. What drugs does the Part D plan cover? First, determine that the plan covers your medications. Make certain you also understand if the plan covers the brand name or generic version of a drug. Many people can use generic medications, but others may experience adverse reactions and require the brand name medication.

According to Muralidharan, people often look to the Allsup Medicare Advisor service to help navigate the complexity of determining which Part D plans cover which medications. For example, a formulary might cover most of someone's drugs, but if one of the most expensive medications is not covered, this can be a significant cost.

3. Does the plan restrict where or how you can purchase medications? Medicare prescription drug plans contract with certain pharmacies to create a network. Within that network some plans may have preferred and non-preferred pharmacies, potentially requiring you to pay higher rates if you don't go to a preferred pharmacy. Medicare beneficiaries should determine if the plan's network is convenient and cost-effective to them.

4. Is having coverage during the gap ("donut hole") necessary? The prescription drug gap in coverage occurs in 2011 after the individual's and plan's combined costs total $2,840. After that amount is reached, the person is responsible for all costs until catastrophic coverage starts, which is when the individual's and plan's combined costs total $6,448. For 2011, beneficiaries do receive some relief from a 50 percent discount on brand drugs and 7 percent discount on generic drugs bought while they are in the donut hole.

However, not everyone who falls into the donut hole would benefit from purchasing a more expensive Part D policy with gap coverage, according to Muralidharan. "Someone with very high-cost medications could move through the donut hole more quickly to reach catastrophic coverage, where the plan will cover 95 percent of their prescription drug costs."

5. Do you have comprehensive and objective information on the plan? When evaluating plans, it's important to ensure you have all the necessary details to make a fair comparison of Part D plans. Keep in mind that many Medicare plan selection services provided in the marketplace are designed to promote specific plans, including those provided by specific insurance providers. This can be true for Part D selection services offered online and by store pharmacies. Government resources also may not be the most current. These factors can limit your ability to make an informed choice and could mean you miss the opportunity to find a plan that better meets your needs.

"You are going to be able to make a more informed, confident decision on your prescription drug coverage if the information you are using is reliable and comes from an objective, third-party resource," Muralidharan said.

For an evaluation of your Medicare options, please call an Allsup Medicare Advisor specialist at (888) 271-1173 or go to http://medicare.allsup.com.

Source ALLSUP