Drug Plan Formularies

Medicare Supplement Insurance Plans and Medicare Part D

“I have a Medigap Plan to supplement my Medicare. Do I still need to enroll in a Part D plan?” If you have wondered this, you are not alone. Even if prescriptions aren’t important to you now, there are reasons to enroll in a plan.

Of course we know that the chances of us needing some type of medication as we get up in years is great. If you wait until you need medication to enroll and don’t join when you first receive your Medicare, you will most likely have to pay a penalty. The penalty assessed will be 1% of the of the Part D National Base Beneficiary Premium per month that you could have enrolled but didn’t. This penalty is added to the premium of the Plan you choose. The National Base Beneficiary Premium is $32.34 for 2011. If you delay your Part D enrollment for 1 year, you will have a penalty of $3.88 on your monthly premium for whatever plan you choose. The penalty is permanent.

Medicare’s drug program is called Medicare Part D. Part D is offered by private companies. These companies and the various prescription plans that they make available must be approved by Medicare.

All must cover certain drugs and meet certain coverage criteria to be approved. However the plans can vary greatly in terms of premium, co-pays and total out of pocket expenses. If you have original Medicare you can enroll in a stand alone Part D prescription plan along with your Medicare Supplement plan. Many Medicare Advantage plans include Medicare Part A, B and D coverage. There are some that only cover A and B and require a separate Part D.

In light of the fact that all of the plans are have different cost sharing, a key part of your strategy for keeping your health care cost to a minimum is a comparison of the plans available in your area. Your prescriptions are unique to you and the choice of your drug plan should be based on your drugs. You can get a detailed report comparing all of the plans in your area by visiting http://www.medicare.gov and using the Medicare Plan Finder. This nifty program will show you all of the plans and how they relate cost wise to your unique list of prescriptions. You will also see the quality rating for each plan.

There are limited times when you can sign up for Medicare Part D. For instance, you can sign up when you are turning 65. You have a seven month enrollment period. This is called your Initial Enrollment Period (IEP). It begins 3 months before the month of your birthday, includes the month of your birthday and ends the last day of the third month after your birthday. There is also the Annual Enrollment Period (AEP). During the AEP you can enroll in a Part D plan for the first time or change from one plan to another. There are also various Special Enrollment Periods (SEP) when you can enroll under certain circumstances, for instance if you are losing employer coverage you may qualify for an SEP.

The Part D plans change from year to year. Premiums change, formularies change, co-pays change and new plans come available. Why not make the most of the AEP each year by reviewing your drug coverage and making certain that you are in the right plan each year. It takes a few minutes and can save thousands of dollars per year.

by Stephanie Coutavas