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5 tips for choosing a Medicare Part D plan

Picking a prescription drug plan is tough going, but these smart and easy tips will help ease the decision.

Whether you’re signing up for the first time or switching plans, understanding enrollment in Medicare Part D is vital to saving money and ensuring you get the right medications in the fastest, most convenient manner. However, the process can quite frankly be immensely confusing.

For insight into the process, Considerable spoke to Jack Hoadley, Ph.D., a prominent health policy analyst and Director of the Center for Medicare and Medicaid Research at Georgetown University. He gave us these valuable tips.

1. Understand the penalty fees for not enrolling.

You may choose not to enroll in Part D. Maybe you don’t take any prescription drugs, or perhaps you’re covered by your job for now. Whatever the reason, you should be aware of the potential late penalty, imposed if you go more than 63 days without any creditable coverage, a.k.a. coverage that’s equal to or better than what you would receive with Part D.

Your Part D penalty is estimated by multiplying “1% of the ‘national base beneficiary premium’ ($33.19 in 2019 and $32.74 in 2020) times the number of full, uncovered months you didn’t have Part D or creditable coverage,” according to Medicare.gov.

Even worse, the penalty isn’t a one-time fee. “It grows every month you wait.” says Hoadley. “It goes on forever. It’s a percentage based on the average premium. You would pay that fee every month you’re in it for the rest of your life. It’s a pretty strong incentive [to enroll].”

2. Use your resources!

Remember, though Medicare may seem overwhelming at first, you have resources designed to help you navigate the process. “If a person is comfortable going online and using the Plan Finder at Medicare.gov, that often is the best way to shop among available plans,” says Hoadley. The finder allows you to enter your prescriptions, search local pharmacies, and ultimately, compare the cost of plans in your area, which are rated on a five-star basis. Comprehensive and relatively easy to use, there are few better Medicare resources.

For those not comfortable with the internet, there’s the 1-800-MEDICARE number, where you can speak to a representative who can explain terms and help you choose a plan. If you prefer face-to-face meetings, there’s the State Health Insurance Assistance Program (SHIP), whose local offices provide Medicare enrollees with free counseling. SHIP can be especially helpful if you qualify for financial assistance.

“We know people who are eligible for subsidies who never apply, and the counselors can help you with that,” says Hoadley. “For people whose income is low, the subsidy is quite valuable. It can eliminate premiums completely, drastically reduce cost-sharing, and eliminate the donut hole.”

3. Have your list of drugs prepared.

However you decide to research your Part D options, it’s vital to have a list of your medications handy since they will ultimately determine your costs. If you sign up online, “[You] want to have a list ready of all the drugs you take, with the exact names and dosages,” advises Hoadley. “Gather up all the pill bottles. Enter in the drugs, and the pharmacy you use to fill those drugs, and the Plan Finder does all the arithmetic for you, and identifies the best plan.”

4. Re-evaluate annually if possible

In terms of price changes for 2019, initial deductibles rose from $405 to $415, and is projected to increase to $435 in 2020. Out-of-pocket costs rose from $5,000 to $5,100, with an estimated projected rise to $6,350 in 2020.

Those changes illustrate why it’s so important to review your Part D plan, “if not every year, then every couple of years,” says Hoadley. Prices, formularies, and even the very existence of your plan can change drastically. So, annually during the standard enrollment period—October 15 to December 7—”Go back in the Plan Finder, and do the basic check with your current drugs and find the least expensive plan. If you find the difference is only a few dollars a year, it might not be worth it. But if it’s a few hundred, it might be.”

5. Check for special enrollment dates.

Finally, if you miss the enrollment period—again, October 15 to December 7—due to a special situation, don’t fret. There are alternative dates that you’ll be able to work with.

“There’s a special enrollment period available if you move or experience other life-changing situations,” says Hoadley. “It’s always worth asking questions about special enrollment periods. Go to a counselor, call the 1-800 number, and explain your circumstances.”

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