Health Insurance Navigator

By Lisa Zamosky

Medicare Open Enrollment has just closed, and many of you have probably recently signed up for or switched Part D prescription drug and Medicare Advantage plans. If you’re curious to know more about Part D and its recent changes, a new report out by Avalere Health offers some food for thought. It highlights how important it is for Medicare beneficiaries to understand how plans are changing and the impact of those changes on their wallets.

Fewer Drugs Covered in 2012

Avalere’s analysis, which included all drugs covered by Part D plans currently on the market, showed a wide gap in the number of medications covered by the top 10 stand-alone prescription drug plans for 2012. Generally speaking, says Corey Ford, a manager with Avalere Health, “the universe of covered Part D drugs has declined.”

For example, the Humana Enhanced plan – the third largest plan on the market in terms of membership – will cover 5% fewer drugs in 2012, than in 2011.

In addition, Ford says, plans offering five-tier formularies (the list of drugs covered by your plan) have increased to nearly 60%, up 19% from 2011. Medicare beneficiaries are on the hook for varying co-pays or co-insurances depending upon the tier in which a medication is classified.

In addition, 87% of Part D plans will use specialty tiers, which include high-cost biologics, as well as drugs used to treat cancer, rheumatoid arthritis and multiple sclerosis, among other diseases. These drugs are quite costly and beneficiaries in need of these medications will typically be required to pay co-insurance (a percentage of the drug’s cost), rather than a co-pay (a flat fee).

Be a Savvy Shopper

The government recently announced that across the board, the cost of basic Part D coverage will be slightly lower next year than it was this year – $30 per month for 2012 as opposed to $30.76 in 2011.

Just because prices on average are expected to drop, however, doesn’t mean the cost of your particular plan will. You need to look beyond your monthly premium to determine your true costs for 2012.

“It’s been our experience that premium is the number one factor in plan choice,” Ford says. “Next to that is the Part D deductible. The savvy beneficiary will go to [Medicare’s] Plan Finder and look up what their out-of-pocket expenses are, and what their drug costs are going to be throughout the year for a given plan.”

The bottom line: you need to add up all costs associated with accessing your medications:

Premium + Deductibles + Co-Pay and/or Co-Insurance

Keep in mind that if you enter the “donut hole” or gap in drug coverage, in 2012 you’ll receive a 50% discount on covered brand-name drugs and a 14% discount on covered generics.

Also important is learning how you’ll gain access to your drugs. Will you need prior authorization or be required to try a generic before a brand-name medication will be authorized?

“You need to know what your out-of-pocket expenses will be and find a plan that best fits and meets your needs,” Ford advises.

Your turn: What have your experiences with Part D been? Does your plan pay for all the medications you need?