MEDICARE PART D PRESCRIPTION DRUG COVERAGE 9/15/15

You must have heard about the Medicare D prescription drug program; most people ready for Medicare have already received information. There is an open enrollment period from October 15 through December 7 of each year when you can enroll or change plans without a penalty.

The most common question is: "Should I sign up?" There is no simple answer. Some folks are already covered by a retiree program, some don't spend much on prescription drugs, and others buy drugs through the VA. How do these compare?

If you are currently covered by a retiree plan, you should have already received a letter from your former company telling you how your coverage compares to the Medicare options; if not, call the company. You probably should continue with your current plan and not sign up for a new plan, if your current drug coverage is at least as good or better than Medicare's (called "creditable coverage"). If your company drug plan is more expensive than the coverage you can get from Medicare, you may wish to drop the company benefit and go with Medicare. But check with your company to make sure you can drop the drug coverage without losing the rest of your health care benefits.

If you don't take too many prescription drugs, it may cost more to enroll in the program than you'll receive. You need to compare your out of pocket prescription drug expenditures in a year under your existing plan and under Medicare D. On average, most people will pay about $35 per month premiums, $320 annual deductible, 25% of Costs between $321-$2960 and between 45 and 65 percent of their prescription costs in the donut hole ($2961 up to $4,700) under Medicare D. Low income individuals may qualify for "extra help" with these costs.

Even if your current medication costs are minimal, remember they may skyrocket in the future. Can you sign up for a Medicare Part D plan only when you actually need the benefits? Yes, but there is a penalty. For plan year 2015, the Late Enrollment Premium Penalty is $0.33 for each month that you were not enrolled in a Medicare Part D plan, but were eligible for Medicare Part D. For example, let's say you had Part D coverage starting when you were initially eligible through 2010 and then decided that you did not need coverage starting January 1, 2013 so you dropped your Medicare Part D coverage. Your situation changed at the end of 2014 and you chose to enroll in a Part D plan for 2015, your monthly premium penalty would be $3.96 or 12 x $0.33. Your Part D plan premium would be the regular plan premium plus an additional $3.96 each month for the rest of your life.

If you currently obtain prescription drugs from the VA, you are probably better off not changing to a new Medicare D plan. If you stay with VA benefits, you can switch to Medicare in the future with no premium penalty.

It is very difficult to accurately compare plans. Each plan has it own "formulary" or list of prescription drugs it provides. You need to list the drugs you take and compare the plan formularies to choose the plan that covers most of your drugs; it is unlikely that one plan will cover every drug you take. You doctor may have to switch you to a different drug, or appeal to the plan to cover a drug you specifically need.