The Open Enrollment Period (OEP) for both Medicare Advantage (private plans) and Part D (prescription drug) Plans began on Oct. 15. Through Dec. 7, more than 39 million PDP enrollees have the opportunity – and responsibility – to purchase prescription drug coverage. And it’s important to carefully research and select the policy that provides the best features and pricing for you and your family.
Generally, 2016 will see many plans’ premiums and other costs rising. Those with employer-provided coverage will be automatically re-enrolled in 2016. However, all Part D beneficiaries should make the effort to shop around, even if happy with their current plan. And with 26 different 2016 plan options, enrollees will have multiple options.
According to the nonpartisan Kaiser Family Foundation (KFF), consumers remaining with their current PDPs can expect their monthly premiums to increase 13 percent in 2016, from $36.68 to $41.46. But a lower premium plan may actually be more expensive, as they require higher out-of-pocket costs. But whether you regularly take medications or just want a safety net, here are some tips to make your healthcare budget go farther in 2016.
1. Review all plan costs, including premiums, deductibles, copayments and coinsurance and out-of-pocket costs. If the plan’s formulary (list of covered drugs) doesn’t carry your medication, you’ll pay the full price. PDPs utilize five drug pricing tiers: preferred and non-preferred generics; preferred and non-preferred brand-name drugs; and expensive specialty drugs. Typically, insurers charge 20 percent for preferred brand name drugs and 40 percent for non-preferred brand name drugs.
The Medicare Plan Finder allows enrollees to compare all available PDPs’ overall costs. It provides drugs’ costs and restrictions, enabling you to estimate each plan’s annual costs. You may want to contact the State Health Insurance Assistance Program (SHIP), at (800) 633-4227. SHIP offers Medicare beneficiaries free, personalized insurance counseling and assistance when comparing plans.
2. Select a preferred pharmacy. These in-network pharmacies may offer bigger discounts, in the form of lower copays, for certain PDPs. For 2016, 85 percent of all PDPs will charge less for these pharmacies, compared to 7 percent in 2011.
3. Special requirements can affect brand name and specialty drugs costs. There may be authorization forms for specific drugs or limited monthly dosages. Or, a drug may only be covered once you’ve tried a list of less-expensive medications (known as step therapy). The Medicare Plan Finder can provide information about drug restrictions.
4. Generic drugs, if available, may cost up to 85 percent less than brand name drugs. Every year, more are introduced, but if one isn’t available, you may be able to purchase a “therapeutic equivalent”; while not a generic, these drugs can provide similar benefits.
5. Pick a plan meeting your budget. PDP’s out-of-pocket costs can rise or fall. Under the 2016 Part D coverage gap (the donut hole), plans provide coverage until drug expenses reach $3,310, including your share and the insurer’s. You then reach the donut hole, and you have to pay 45 percent of brand name drug costs and 58 percent of generic costs. Once your out-of-pocket costs reach $4,850, the plan kicks back in. You then pay only 5 percent of the covered drug costs.
