Savvy senior-Changes Coming to Medicare Part D

Dear Savvy Senior,

Should I consider changing my Medicare (Part D) prescription drug plan during open enrollment season? My pharmacist told me that with all the changes coming next year, it would be a good time to shop and compare plans because I could probably find a better deal. What do you think?

Dear Rita,

Reviewing your Medicare Part D options during the open enrollment season (Nov. 15 – Dec. 31) is actually a smart thing to do every year, but it’s particularly important this year because of all the costs, coverage and plan changes that are coming in 2011. Here’s what you should know.

Donut-Hole Coverage

One of the biggest changes to Medicare Part D next year is the shrinking of the “donut hole” coverage gap. In 2010, seniors fall into the coverage gap when their prescription drug expenses total $2,830 for the year. At that point, you generally have to pay all of your drug bills yourself until the total cost of your drugs for the year reaches $6,440. After that, your insurer picks up most of the bill.

But starting in 2011, seniors that hit the donut hole will get a 50 percent discount on brand name drugs and a 7 percent discount on generic drugs. So if you’ve been paying extra for coverage in the donut hole, now is a good time to review your options. You may be able to switch to a more basic, less expensive plan and still end up with similar coverage because of these new discounts.

Cost and Coverage Changes

Rising premiums, the elimination of some popular drug plans, and the addition of some new low-cost plans are the other changes you need to be aware of.

While the average Part D premiums will increase by just $1 in 2011, to $30 per month, several of the more popular drug plans that millions of retirees are enrolled in are increasing by an average of 10 percent. Another change that wealthier beneficiaries need to take note of is the addition of a high-income surcharge next year. If your income is more than $85,000 (or $170,000 per couple) your Part D monthly premiums will be higher than those with lower incomes.

Also new in 2011, Medicare is requiring insurers to cut back or consolidate the duplicate drug plans they offer to help make the selection process easier. This reduction, however, means that several popular plans like United Healthcare’s AARP Medicare Saver plan and Universal America’s PrescribaRX Bronze plan will be discontinued. Seniors in these plans will automatically be switched into different plans by the same company.

If you’re in a plan that’s being dropped and you’re being moved over to another plan, or if your premiums are rising sharply, you definitely need to reassess your options. Another Medicare drug plan may provide better coverage at a lower price.

You also need to know that several new low-cost drug plans are entering the market next year. The Humana Walmart-Preferred Rx plan is the cheapest at only $14.80 per month, but be aware that your out-of-pocket costs for this plan will vary greatly depending on where you purchase your medications.

How To Compare Plans

When comparing drug plans be sure to consider the whole pricing package including premiums, deductibles and co-pays. Low-premium plans could cost you more if you have to pay high co-payments for your medications. Also, be sure the plan you choose covers all of the drugs you take with no restrictions.

To compare plans, use Medicare’s online Plan Finder Tool (www.medicare.gov/find-a-plan) where you type in your zip code, drugs and dosages, and select the pharmacies you use and you’ll get a cost comparison breakdown for each plan available in your area.

Or, if you don’t have Internet access or could just use some help, call Medicare at 800-633-4227 and they can do the comparing for you right over the phone. Some other helpful resources are the Medicare Rights Center which staffs a toll-free hotline at 800-333-4114, and your State Health Insurance Assistance Program (SHIP) who provides free personalized help with Medicare decisions. Call 800-677-1116 or visit shiptalk.org for contacts.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.