Tis the season-open enrollment season, that is. Each year Medicare enrollees have a window of opportunity when they can change their coverage plans. So if you or someone you love wants to add, drop or change prescription coverage (Medicare Part D) or switch from Original Medicare to Medicare Advantage (or vice versa), now is the time (open enrollment runs through December 31).
There is an alphabet soup of options for Medicare recipients (see The A,B,Cs and D of Medicare for more details), but prescription coverage comes one of two ways: Medicare Advantage (Part C) or Medicare Part D. If you opt for Medicare Advantage, your plan will include Medicare Parts A and B and often-but not always-prescription coverage. Part D is a stand along prescription plan, and as with Medicare Advantage, it's offered through Medicare-approved private companies. Depending on where you live, you may have as many as 50 prescription plans to choose from. But more isn't always better.
"There is information overload when there are too many drug plans for seniors to choose from," said Thomas Rice, vice chancellor at the University of California at Los Angeles. He co-authored a study published in the journal, Health Services Research, that indicates when faced with a plethora of drug plan options, older Americans are more likely to make poor choices, yet many remain confident they've made the right decision.
The researchers created hypothetical drug plans and asked 180 adults, half of whom were age 65 and older, to consider which one they would recommend that a friend choose. The subjects were randomly divided into groups and given information about three, 10 or 20 plans.Participants in general were more likely to make errors when they had more options from which to choose. Interestingly, researchers found that seniors were almost twice as likely to be very confident about their choices than younger people were, even though they were less likely to have made the right decision regarding overall cost. Previous research has suggested that people put too much emphasis on low premiums and do not take into account how much they will actually pay when they buy a drug, Rice said.To ensure you end up with the right plan, consider choice, coverage and cost.Choice: If you're opting to get your prescription through a Medicare Advantage (MA) plan, you'll have to first choose the type of plan. Two thirds of MA participants enroll in health maintenance organizations (HMOs), but there are also preferred provider organizations (PPOs), private fee-for-service plans, and plans for people with special-needs. Among the questions you should ask are:Can you see the doctor(s) you want?Do you need a referral to see a specialist?Can you go to the hospital you want?Do you pay less to go to certain doctors or hospitals?Coverage: If you are choosing an MA, evaluate the coverage terms, (if it's an existing plan, check to see if your policy will change in 2010). Are you covered for eye exams, dental benefits, hearing aids or other extra services? If you spend part of the year out of state, will you be covered there? Does your plan include emergency health care outside the United States? Whether you go for Medicare Advantage or Part D, check the plans formulary (list of covered drugs) to see if your prescriptions are included. Also, do you anticipate reaching the "donut hole," that is the coverage gap that occurs after you and your plan have paid $2830 for covered drugs until you've reached $4500 in out of pocket costs (excluding plan premium), which is when catastrophic coverage kicks in. At that point, your prescriptions are once again covered. Some plans fill the donut hole with coverage (often limited).
Cost: The Kaiser Family Foundation estimates that the average monthly premiums for Part D prescription coverage will rise by 11 percent in 2010. Don't judge plans by the cost of premiums alone, evaluate all out-of-pocket costs, including deductibles, co-pays or coinsurance. Since most prescription plans classify covered drugs in tiers, and the co-pays for each tier can differ dramatically, be sure to check what each of your medications will cost.To calculate the bottom line for each of the prescription plans available in your area, use the CVS Medicare Part D Savings Calculator.
