Dear Savvy Senior,
I recently received a letter from my Medicare drug plan provider notifying me that they are increasing my co-pays next year. I'd like to look for a better plan but could use some guidance. What's the easiest way to do this?
Need a Change
Cost increases and coverage changes are an annual event for many Medicare Part D prescription drug plans. Fortunately, during the open enrollment period (which is Oct. 15--Dec. 7), you have the ability to shop and compare plans and choose one that better fits your needs and budget. Your new plan will go into effect Jan. 1, 2016. Here are some tips that can help with this process.
If you have internet access and are comfortable using a computer, you can easily shop for and compare all Medicare drug plans in your area, and enroll in a new plan online.
Just go to Medicare's Plan Finder Tool at medicare.gov/find-a-plan, and type in your ZIP code or your personal information, enter in how you currently receive your Medicare coverage, select the drugs you take and their dosages, and choose the pharmacies you use. You'll get a cost comparison breakdown for every plan available in your area so you can compare it to your current plan.
This tool also provides a five-star rating system that evaluates each plan based on past customer service records, and suggests generics or older brand name drugs that can reduce your costs.
It's also important to keep in mind that when you're comparing drug plans don't judge a plan strictly by its monthly premium cost. Low-premium plans are often associated with higher prescription co-payments and may end up being more expensive. Look at the "estimated annual drug costs" that shows how much you can expect to pay over a year in total out-of-pocket costs -- including premiums, deductibles and co-pays.
Also, be sure the plan you're considering covers all of the drugs you take with no restrictions. Most drug plans today place the drugs they cover into price tiers. A drug placed in a higher tier may require you to get prior authorization or try another medication first before you can use it.
If you need some help choosing a new plan, contact your State Health Insurance Assistance Program (SHIP), which provides free one-on-one Medicare counseling in person or over the phone. They also conduct seminars during the open enrollment period at various locations throughout each state. To find the contact information for your local SHIP visit shiptacenter.org, or call the eldercare locator at 800-677-1116.
Shrinking Donut Hole
You also need to know that Medicare's "donut-hole" -- the coverage gap in which you must pay out-of-pocket for your drugs -- continues to shrink. In 2016, you will get a 55 percent discount on brand-name drugs, and the federal subsidy for generic medications will rise to 42 percent.
The 2016 coverage gap begins when your total drug cost exceeds $3,310 (that includes your share and the insurer's share of the costs) and ends when your total out-of-pocket costs reach $4,850. After that, your Part D plan usually covers around 95 percent of your remaining drug costs for the year.
Also, be aware that if you're income is under $17,655 or $23,895 for married couples living together, and your assets are below $13,640 or $27,250 for married couples not counting your home, car or life insurance policy, you may be eligible for the federal Low Income Subsidy known as "Extra Help" that pays Part D premiums, deductibles and co-payments. For more information or to apply, call Social Security at 800-772-1213 or visit socialsecurity.gov/extrahelp.
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.