Just when I thought I might have to write a column myself for a change, along comes the right honorable and estimable Less Antman with the perfect words for the moment, as millions of seniors – or their children or grandchildren – struggle with the Medicare prescription drug choice.
(If even this clear analysis glazes your eyes over, read just the first part, about whether you have to enroll, and then – if you do – skip to my comment at the end and call 866-255-4835.)
Medicare Prescription Drug Plan
By Less Antman
For those of you agonizing over your choices under the Medicare Prescription Drug Program (PDP), I share your pain: I had to do a great deal of research in the service of family, friends, and clients, and still am not 100% sure I understand all the relevant provisions. As far as I know, however, here are some things that might help you:
DO I HAVE TO ENROLL?
(1) If you have “creditable coverage,” which means prescription coverage at least as good as the basic PDP benefit, you can relax and needn’t do anything. But your insurer should have sent you a letter telling you that you have creditable coverage, and you must make sure to save that letter, because if you try to sign up for the PDP benefit later and cannot prove you had creditable coverage from the time you first became eligible for Medicare until the time you finally joined the PDP plan, your premium will be increased by 1% for every month you waited, and that penalty will apply to all premiums for the rest of your life.
(2) If you are a member of a Medicare HMO or Medigap plan which has creditable prescription benefits, you’re also okay. Again, your insurance company is required to send you a letter letting you know if the coverage is creditable, so make sure you’ve received it.
(3) If neither category fits, or if you want to stop paying very high premiums for health insurance with an employer and have the taxpayers massively subsidize your prescriptions from now on, then you need to join a plan.
WHICH PLAN SHOULD I CHOOSE?
The only honest answers are (1) I’m not sure and (2) It depends. But let me offer some thoughts:
(a) At the end of every year (starting November 15), you can arrange to switch to a different plan for the following calendar year, so if you make a bad choice, you’re not stuck forever and won’t find it difficult to make a better choice in the following year.
(b) If you have no need for prescription drugs at the moment, you might just sign up for the cheapest plan available in your state (you can find all the rates at medicare.gov). The cheapest come to $5 per month or less, depending on the state. It will provide only the basic benefit for the drugs that plan covers: you pay the first $250 per year, then 25% of the next $2,000, then you have to pay ALL the drug costs above $2,250 until you’ve spent $3,600 out of your own pocket for the year (this gap in coverage is being called the “doughnut hole”), and then you only have to pay 5% of the remaining costs, no matter how high they get. In essence, this is catastrophic coverage that virtually everyone should have. Keep in mind that the plan must provide a list of the drugs it will cover: the law requires they cover at least one drug in each category that the government has identified as a condition to be treated, and if they discontinue coverage of any drug (which they can do on 60 days notice), they must still continue to cover it through the end of the calendar year for anyone who has already filled a prescription for that drug with them (this rule is to protect beneficiaries as they cannot switch plans during a calendar year).
In California (and many other states), the cheapest plan available is Humana Standard, and some of my own healthy older friends and relatives have signed up for that one just in case (remember, if you get seriously ill, you can switch to a more comprehensive plan effective January 1 of the following year).
(c) If you have moderate drug costs (which won’t add up to more than $2,250 for the year), or if you expect to go over that amount but all of the drugs you use are generics, you should take a look at CIGNAture Complete. It appears to have a very complete schedule of drugs that it covers and reasonable copays (much lower than the basic PDP plan benefits), with no $250 deductible to start. It also continues to have the low copays, even after the drug costs have gone past $2,250, for generic drugs. In other words, for generic drugs, it doesn’t have that doughnut hole problem. Of course, the premium is more than $5 per month. In California (and many other states), it comes to around $40 per month. And keep in mind that, if the drugs you’ve used during the year have added up to $2,250, and you want a prescription filled for a brand-name drug, you will have to pay 100% of the cost, and continue to do so until you have reached the $3,600 out-of-pocket limit (after which the 5% copay kicks in). The doughnut hole is only eliminated for generics. But for many of the people I know with moderate drug costs, this was the plan that turned out to be the best one.
(d) If the drugs you use are likely to end up costing more than $2,250 for the year, and will include brand name drugs, then you should look at Humana Complete. In California, and many other states, it is the ONLY plan with no doughnut hole at all, even for brand names. For the drugs it covers (and its list is one of the most complete I’ve seen), it will continue to only ask for the regular copays even after you reach $2,250, and you might end up not reaching the $3,600 out-of-pocket limit at all unless and until your total drug costs for the year have reached $40,000 or more. For people with very expensive prescription needs, this plan could end up saving as much as $2,000 per year compared to other plans. Naturally, the monthly premium is on the high side (around $50 in California), but for those with the largest prescription costs, this plan is going to work out the best (as long as the drugs being used are on the covered list). This is the plan that I’ve been recommending to the sickest of friends, relatives, and clients.
Let me warn you that the question of which drugs each plan covers is a tricky one, and I’m afraid that the Medicare web site, which has a handy tool allowing you to enter all the drugs you use to compare costs, has provided me with some results that I absolutely know are wrong (such as saying a particular drug wasn’t covered when the plan in question was covering it). If you think you’ve found the right plan, or want to look into one of the ideas I offered, check with the plan itself to be sure your drugs are covered. Don’t trust the government web site, since they won’t take responsibility for any mistakes. And don’t forget that doughnut hole: only a handful of plans pay anything in that hole, and most of them only do so for generics.
Also don’t forget that government laws change and plans change. This is what I believed was correct as of the date this page was last updated.
☞ And if all else fails? Just click here and see if you like the AARP-endorsed plan, and whether it has a participating pharmacy near you. If so, you can just sign up on-line, or with a human 24 hours a day – 866-255-4835. As Less says, you can always switch plans after a year.
Closed at $4.96, now valued at a mere $180 million. I doubt you’ll find many plans above that cover BiDil.
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To the BELOVED REPUBLIC under whose equal laws I am made the peer of any man, although denied political equality by my native land, I dedicate this book with an intensity of gratitude and admiration which the native-born citizen can neither feel nor understand.~Dedication to Andrew Carnegie's Triumphant Democracy (Scribner's, 1886)
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