You can switch into a new Medicare Part D plan for 2012 during the open enrollment period from October 15 to December 7. Premium prices, deductibles, and covered medications can change each year, so it's a good idea to reevaluate whether your current plan will still be a good fit for you in the coming year. "If you are enrolled in a plan now and happy with what you have, the best thing to do is call your plan or go online and see how the coverage that you have might be changing," says Juliette Cubanski, a policy analyst at the Kaiser Family Foundation. "What you have this year is not going to be exactly the same next year." Here's how to pick a prescription drug plan that best meets your medication needs in retirement:
Weigh your options. Medicare beneficiaries will have a choice between an average of 31 Medicare Part D plans in 2012, ranging from 25 plans in Alaska and Hawaii to 36 plans in Pennsylvania and West Virginia, according to a recent Kaiser Family Foundation analysis of 2012 plan offerings. Some 1,041 prescription drug plans will be offered nationwide in 2012, down from a peak of 1,875 plans in 2007. "Compare plans for the specific drugs you use and recheck every year," says Jack Hoadley, a health policy analyst at Georgetown University. "The plan that was the best deal a year ago or five years ago may not be the best deal today." You can find and compare plans using the Medicare Plan Finder tool.
Consider monthly premiums. The projected average monthly Part D premium will be $39.40 in 2012, assuming beneficiaries remain in their current plans, KFF found. That's up 4 percent from $37.96 in 2011, and a 52 percent increase from $25.93 in 2006. But there is a wide variation in annual premium changes. For example, the more than 4.6 million enrollees in UnitedHealth's AARP Preferred MedicareRx prescription drug plan will see a 14 percent increase in their premium in 2012, to $39.70, if they remain in this plan. In contrast, Humana's low-premium Walmart-Preferred Rx Plan will increase premiums by 2 percent, to $15.10 in 2012.
KFF estimates that about 510,000 Medicare Part D beneficiaries will experience premium increases of at least $10 per month in 2012 unless they select a less expensive plan. The researchers expect premium prices to decline by at least $10 monthly for 370,000 retirees if they stick with their current Part D plan. Premium changes also vary considerably by region. Average premiums are expected to fall slightly in 2012 in Louisiana, Nevada, and southern New England, but KFF estimates they will rise by at least 10 percent in California, Maine, and New Hampshire. Retirees with annual incomes of at least $85,000 ($170,000 for couples) will also pay higher income-related Part D premiums in 2012.
Determine copayments and coinsurance. Premiums aren't the only cost you should pay attention to when selecting Part D coverage. Many Part D plans require participants to pay a percentage of the cost of their drugs or a set amount for each prescription filled. "It is the combination of copays and premiums and the deductible that impacts the total amount of costs that you have," says Hoadley. "If you simply pick the cheapest plan with the lowest monthly premiums, but the drugs you need are in tiers that have very high copays, then you will have to pay more under that plan." Find out how much you will need to pay out-of-pocket for medications you are likely to take next year.
Deduce the deductible. Over half of Part D plans (53 percent) will charge a deductible in 2012. Most plans with a deductible will charge the maximum possible amount of $320 in 2012. The proportion of plans with deductibles that charge less than the maximum possible deductible has declined from 24 percent in 2010 to 10 percent in 2012. Some 47 percent of Part D plans will charge no deductible next year.
Examine the formulary. Find out if the medications you need are covered by each plan you consider, and make sure that a pharmacy that is convenient for you is compatible with the plan. "Be careful if you sign up for a plan that requires you to fill all your prescriptions at specific pharmacies because if you don't, you could end up paying more," says Elizabeth Hargrave, a senior research scientist at the University of Chicago's National Opinion Research Center. Some plans require prior authorization before a prescription will be covered, set quantity limits on how much medication you can get at one time, and may require you to try similar, lower-cost drugs before covering a more expensive prescribed drug. Most Part D plans have multiple tiers of covered medications for which they charge different prices, says Cubanski. "Plans can make changes to the formulary placements of the drugs they do cover and that can impact how much people pay."