Four weeks remain to enroll in Medicare for 2010. For 26 million participants in Medicare's Part D prescription drug program, it's especially important to pay attention to the details of the insurance plans you're considering, especially the ways various insurers handle co-pays for specific drugs.
Private insurers offer plans that may either be part of basic Medicare or be included in other Medicare coverage plans. About 50 different Part D plans are offered in most states. According to the Kaiser Family Foundation, the baseline elements of stand-alone Part D coverage in 2010 will include up to a $310 initial deductible (up from $295 in 2009) and then a 25 percent copay up to $2,830 in total drug costs (up from $2,700 in 2009). People then encounter what's called the "doughnut hole" in Part D coverage and must pay all of their drug costs until their out-of-pocket spending reaches $4,550 (up from $4,350 in 2009). This spending total excludes Part D premiums.
Average monthly premiums for Part D coverage will rise 11 percent to $38.94, according to Kaiser. But that average includes rates as low as $8.80 and as high as $120.20, Kaiser says, reflecting wide variations in coverage and geographic cost differences.
But the premium is just the starting point for evaluating the most appropriate Part D plan. Consumers should make sure their Part D insurance plan covers the specific drugs they require. There are 2,363 drugs covered by various Part D plans, according to Avalere Health, a Washington consulting firm. Only one of the top 10 plans covers all of these drugs—AARP's MedicareRx Preferred. Other best-selling plans may cover as few as half that number, Avalere says.
The official Medicare site has a prescription-plan finder tool that locates various insurance plans by ZIP code. It includes a feature enabling you to determine whether your prescription drugs are covered by various Medicare insurance plans, and under what payment terms.
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Since Part D plans were begun in 2006, private insurers have expanded their use of tiers, which they use to assign drugs into categories grouped by expense and co-pay terms. For 2010, 51 percent of plans will have four tiers and 33 percent five tiers, according to Avalere. Most tiers feature co-pays but the highest tier often provides a percentage co-insurance payment, Avalere says. Here is what it says to look for in 2010 plans with four tiers:
- Tier One: Generics, $6.72 co-pay in 2010, up from $5.77 in 2009.
- Tier Two: Preferred brands, $36.25 co-pay, up from $34.83.
- Tier Three: Non-preferred brands; $78.95 co-pay, up from $74.31.
- Tier Four: Specialty and injectable drugs, 30.4 percent co-insurance in 2010, down from 31.2 percent in 2009.
Here are Avalere's averages for those five-tier plans with a single co-insurance tier (about 40 percent of five-tier plans) :
- Tier One: Preferred generics, $2.72 co-pay in 2010, up from $0.54 in 2009.
- Tier Two: Non-preferred generics, $21.52 co-pay, up from $11.86.
- Tier Three: Preferred brands, $32.53 co-pay, up from $30.02.
- Tier Four: Non-preferred brands, $73.81 co-pay, up from $71.01.
- Tier Five: Specialty and injectable drugs, 28 percent co-insurance in 2010, down from 28.2 percent in 2009.
Here are Avalere's averages for the five-tier plans with two co-insurance tiers (about 33 percent of five-tier plans):
- Tier One: Generics, $5.40 co-pay in 2010, down from $6.58 in 2009.
- Tier Two: Preferred brands, $37.75 co-pay, down from $39.07.
- Tier Three: Non-preferred brands, $87.71 co-pay, up from $82.46.
- Tiers Four and Five: Specialty and injectable drugs, 28.7 percent co-insurance in 2010, nearly identical to 2009.