Compare and Change Your Medicare Drug Plan

Looking to compare Medicare Part D plans? You could talk to one of our licensed sales agents today. They may be able to help you find a Prescription Drug Plan (PDP) that meets your needs – and your budget.

Already enrolled in Medicare Advantage? Then there’s a good chance you don’t need to worry about comparing Prescription Drug Plans. Around 90% of Medicare Advantage Plans (also known as Part C) include this coverage (source: Kaiser Family Foundation*). However, if you have Original Medicare, a Medicare Advantage PFFS plan, or another type of MA-only plan and have enrolled in a stand-alone Prescription Drug Plan, we suggest you review what it offers, and whether or not it still meets your needs, at least once each year.

What is a Medicare Prescription Drug Plan?

Sometimes referred to as Medicare Part D, a Medicare drug plan is designed to help cover the costs of prescription medication for anyone who’s eligible for Medicare. Medicare Prescription Drug Plans are offered by private health insurance companies with the approval of Medicare, which sets the maximum out-of-pocket costs insurers can charge.

The idea of Medicare Prescription Drug Plans is that they make medications more affordable. If you don’t have drug coverage included as part of a Medicare Advantage plan, you’ll want to compare Medicare Part D plans carefully and find one with out-of-pocket costs that won’t break the bank.

What’s covered by a Prescription Drug Plan?

All Medicare Part D plans have what’s called a formulary: a list of medications which the plan covers. The private insurance companies that offer Medicare Prescription Drug Plans must ensure their plans cover at least two drugs from each of the most commonly prescribed categories of medication. These need not be brand-name drugs, as generics are just as effective, and their inclusion in a formulary can help to reduce costs.

When should you enroll in a Medicare Part D plan?

The short answer is, as soon as you’re eligible. For most people, this will be in their Initial Enrollment Period (IEP), beginning three months before the month in which they turn 65, continuing for the whole of that month, then extending for a further three months – a total of 7 months in all. Of course, if you’re planning to enroll in a Medicare Advantage plan that includes prescription drug coverage (as most Part C plans do), you don’t need to worry about enrolling in Part D separately.

If you don’t enroll in creditable drug coverage during your IEP, (or 63 days after your IEP) you may have a late enrollment penalty added to your monthly premium. This penalty will then continue to be added to your premiums for as long as you’re enrolled in Part D.

What do Medicare Prescription Drug Plans cost?

Typically, a Part D plan is broken down into four costs:

• Your monthly premiums
• Your annual deductible
• Copayments
• Coinsurance

While these form the basis of what you’ll pay, you will also need to be mindful of other factors that could affect the overall cost. These include whether or not a plan’s formulary includes all the medications you need, the tiers into which these drugs are categorized, and the pharmacy you choose to use.

Tiers for drug costs can vary from one plan provider to another, but here’s a general example of how these might work:

• Tier 1 : Generic drugs. These would have the lowest copayments.
• Tier 2 : Preferred Brand-name drugs. These could cost more than preferred generic drugs.
• Tier 3 : Non-preferred Brand-name drugs. These might have higher copayments than preferred brand-name drugs.
• Speciality Tier : May include very high-cost medications.

Just as drug costs can vary on different plans, so can charges. The average basic premium for 2021 is $31.47 – and no plan is allowed to charge above $445 for the annual deductible. This limit is reviewed and revised each year.

What about those whose ability to afford their Medicare Part D costs is limited? This is where Extra Help comes in. It’s worth around $5,000 annually, and there are certain strict eligibility requirements that have to be met before a person can qualify for Extra Help.

The general rule when you compare Medicare Part D plans is to think in terms of what you need versus what you can comfortably afford. Talk to your doctor about your specific needs.

Let us help you compare Medicare Part D plans

You can compare Medicare Part D plans using our online plan finder and comparison tool. Or if you prefer, you can call a dedicated, fully licensed sales agent at 888-725-1780 or TTY 711.

*KFF article