Review Your Medicare Prescription Drug Plan
Written By: Brian Ellenbecker, CFP®, EA, CPWA®, CIMA®, CLTC®
Medicare open enrollment is quickly approaching. The window opens October 15 and runs through December 7. During that window, one of the things you can do is make changes to certain components of your existing coverage such as your prescription drug coverage. Recent changes have made this even more important now. Let’s take a deeper look at Medicare prescription drug plans and possible changes to keep an eye on.
Reasons for Annual Review and Upcoming Changes
There are several reasons a person should review their prescription drug plan each year:
1) Personal circumstances have changed (health, prescription drug needs, pharmacy access, etc.).
2) Your current plan has changed and may not be the best option for you any longer. In September each year, current enrollees in a Medicare prescription drug plan will receive a “Plan Annual Notice of Change”. This letter includes any changes in coverage, costs and more. It’s critical you review this document each year.
3) Existing plans have made changes, or new plans are available in your area.
4) Legislative changes have occurred.
To ensure you are enrolled in the most suitable plan, you’ll want to factor in the prescriptions you are currently taking, what level of coverage a particular plan offers on each prescription, and the pharmacy you use.
The good news is next year, the out-of-pocket maximum on prescription drug plans is dropping to $2,000. However, this only applies to covered drugs.
To make things even more challenging, the insurance companies are increasing the number of exclusions and restrictions that apply before a drug is covered. Formularies can also change each year. It’s possible a drug that was fully covered last year may not be covered this year.
Tools to Evaluate Your Coverage
There are two main ways to evaluate your coverage options for the upcoming year: on your own using the Medicare Plan Finder online or by working with a Medicare insurance expert.
Fortunately, the Medicare Plan Finder is relatively easy to use and can be a good starting point for at least examining costs. From medicare.gov, choose “Find Health & Drug Plans” from the Health & Drug Plans dropdown menu and follow the prompts. It will ask you to enter your zip code, whether you receive your coverage from Part D or Medicare Advantage, whether you receive any financial assistance, the prescriptions you’re taking and the pharmacy you use. The plan finder will then show you the annual cost of every plan in your area, with the least expensive plans listed first. Following these instructions will at least help you identify if there could be a less expensive option for you. It will also give you a breakdown of how each plan covers the prescriptions you are taking.
If you’re taking more expensive prescriptions, I’d recommend working with a health insurance agent who can assist in shopping for plans and has a much better feel for how particular drugs are covered. If you are taking a drug that isn’t well covered, you want to be sure you understand all the nuances behind your options.
For instance, are there any restrictions to receiving coverage, which is especially common for brand-name drugs. You may need prior authorization or step therapy. Step therapy requires your doctor to first prescribe the drug the insurance company prefers. The doctor can only prescribe the treatment they prefer if the first treatment fails. It’s also possible coverage could be excluded altogether. Exclusions are becoming increasingly common for complex conditions such as certain types of cancers and autoimmune disorders.
The considerations laid out should help you be better prepared for this upcoming Medicare open enrollment period. Reviewing your prescription drug coverage will be an important part of that process—more so this year than perhaps ever before!
If you’d like help reviewing your Medicare options, please reach out to your Shakespeare advisor to discuss your situation in more detail. We can answer your questions and also refer you to a Medicare agent if need be.
Don’t forget to join us on September 25 at 1:00PM for a webinar to learn more about Medicare, including prescription drug coverage.