How to Compare Medicare Part D PlansOctober 10th, 2013 | Posted by in Medicare Costs | Medicare Coverage | Medicare Part D | Medicare Plans
Are you considering enrolling in Medicare drug coverage? Learn how to compare Medicare Part D plans in this blog post.
It is not uncommon for Medicare Part D plans to change their costs and even their prescription drug coverage details on an annual basis. If you are enrolled in a Part D plan, you should receive a summary of plan changes in the mail each year. You have the opportunity to review and decide if you would like to remain in your current plan, or enroll in a different one during the Medicare Annual Election Period (AEP), also known as the Annual Enrollment Period or Open Enrollment Period. If you do not have drug coverage or your current drug plan benefits are not sufficient for your needs in the coming year, you should compare Medicare Part D plans to find the right drug coverage for you.
What should I consider when choosing a Medicare Part D plan?
The first thing to consider is whether or not you will join a stand-alone Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug plan (MAPD). Stand-alone PDPs are a means of adding prescription drug coverage to Original Medicare (Part A and Part B), and beneficiaries will pay a deductible, copayment, or coinsurance on every filled prescription. For those looking to enroll in an MAPD plan, hospital and medical benefits are combined with prescription drug coverage into an all-encompassing plan.
Important factors in comparing Medicare Part D plans
There are many factors to keep in mind when comparing Medicare Part D plans, which include the following:
- Premiums: These monthly fees have numerous determining variables: plan type, location, and private insurance company offering the drug plan. Some plans could offer a $0 premium, but could include fewer benefits than other plan types. Therefore, all of the other factors should be considered before enrolling specifically based on the zero amount premium.
- Deductibles: This is an out-of-pocket cost that a beneficiary must pay each year before the drug plan begins providing coverage.
- Copayments (or Coinsurances): Beneficiaries are responsible for paying a designated amount for each prescription. Drugs are placed into “tiers” and your cost sharing amount will vary depending on which tier the required prescription falls into. Tier assignment varies by plan.
- Donut hole: The Medicare Donut Hole is the gap between the initial coverage limit and the catastrophic coverage threshold. In this gap, beneficiaries will pay for everything plan-related until their personal spend on prescriptions reaches a set amount. Keep in mind that there may be certain discounts in the donut hole. Once that amount is reached, the “catastrophic coverage” phase begins, in which the plan then pays for everything for the remainder of the year.
- Formulary: Each drug plan has its own documented list of covered drugs. Beneficiaries should check the plan’s formulary before enrolling to ensure their necessary prescriptions are covered.
To compare these factors between specific Medicare Part D plan options, you can use the PlanPrescriber Medicare plan comparison tool to find all plans available in your area.
When can I make changes to Part D coverage?
Beneficiaries can enroll in a Prescription Drug Plan during their Initial Enrollment Period (IEP), when they are first eligible for Medicare Part A and/or Medicare Part B. But outside of this time, there are only certain times throughout the year that a beneficiary may make changes to their Part D coverage.
The Annual Election Period (AEP) runs from October 15 to December 7 each year, and allows beneficiaries to enroll in any kind of prescription drug coverage, switch from one plan to another, or drop drug coverage altogether. There is no limit on how many times a plan can be changed throughout the AEP, and any changes take effect beginning on January 1 of the following year.
There is also a limited enrollment period that runs annually from January 1 to February 14 known as the Medicare Advantage Disenrollment Period (MADP). Here, beneficiaries enrolled in a Medicare Advantage Prescription Drug plan can drop the plan and switch back to Original Medicare. If they do so, only then can they choose to pick up a stand-alone Medicare Prescription Drug Plan during this period.
Refer to the PlanPrescriber blog for more information on the Medicare Annual Enrollment Period, and let us know if you have a specific question about AEP in the comment section below.
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