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."
Don't delay signing up. If you don't join a Medicare drug plan when you are first eligible, typically at age 65, or go 63 days or more without prescription drug coverage after that you may have to pay a higher Part D premium. The cost of the late enrollment penalty varies based on how long you went without prescription drug coverage.
Mind the gap. Medicare Part D plans have a coverage gap that will gradually be closed by the health reform law. The coverage gap begins after an enrollee incurs $2,930 in prescription drug costs and ends after an enrollee reaches $6,658 in total drug costs and catastrophic drug coverage kicks in. Brand-name drugs purchased in the gap will be discounted by 50 percent and generic drugs by 14 percent in 2012, due to provisions of the Affordable Care Act of 2010. Most Part D plans (74 percent) offer no gap coverage beyond what is now required by law. Among the quarter of plans that offer some gap coverage, most only provide access to generic and not brand-name drugs, KFF found. Only 7 percent of Part D plans cover some brand-name drugs in the coverage gap and no plans offer full gap coverage for all drugs on their formulary in 2012. "Don't just assume that because a plan is covering some drugs in the gap, it's worth paying extra in premiums," says Hargrave. "It's really important to do that math."