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Why Your Medicare Part D Plan May Not Be The Best For You Next Year

By: Michael Chamberlain CFP(R)


Medicare Part D drug plans provide drug benefits to millions of seniors. One problem with the design of Medicare Part D is that the insurance companies that sell the plans often make changes to the plans for the following year. These changes plus changes in your circumstances could mean that the best Part D plan this year may not be best next year. Having the wrong Part D plan can cost you over $1,000 a year.


You cannot assume that the Part D plan you are on this year will be the best one for you in the following reasons:  


Changes you have made in the past year:


1.  Changes in the medications you take- You may have new medications or have dropped others that you no longer need.  This would impact which plan is best for you.


2. Change the Pharmacy you use. With some plans, you get the best price on drugs by using a specific pharmacy. Changing where you get your drugs could impact the best plan for you.


3. You have moved to a new area. Not all plans are offered everywhere, so if you have moved, be sure to determine the best plan for your new location.

 

4. Do you or would you use generics or only name brand drugs- Generic drugs often have lower costs than name brand drugs. If you are willing to use generic versions (with your Doctor’s approval), could save you a lot of costs.  Generic drugs may be covered differently in the different plans and these can change every year as well.


Changes within the plan


1.  Changes in monthly premium- Some plans increased their premiums while others may have lowered the monthly costs. Unless you check you will have no idea.


2. Changes in what drugs are offered in the different plans- Each plan offers coverage for some drugs but may not offer other drugs. These can change from year to year and would impact your total annual cost.


3. Changes in the plan deductible amount. For 2020, your annual plan deductible can range from a low of $0 to as high as $435. Some plans may have lowered the deductible, while others have raised it from the past year, which could impact the best plan for you.


4. Changes in the plans tier levels for your drugs. The plans place drugs in different coverage levels. Your copay may be low for one tier and changes in copay costs as the tier level changes. When a company moves a drug from one tier to another (as they may do each year) this can change your costs and could impact which plan is best for you.


5. The insurance company changes in their providers. These are behind the sense that you have no idea about but can impact costs.


6. Your plan may no longer be offered. Three plans from 2018 are no longer available and. If you had one of these and if you do nothing you will be enrolled in another plan that most likely will not be the best suited for you. There are also 5 brand new plans offered for the first time, of which h one could be the best for you.


7. There can be changes in how different plans treat costs when you are in the “donut hole” and or beyond. If you do not know what is the donut hole learn more here.


Insurance companies sell the Medicare Part D plans. Their purpose is to make money for their shareholders. This is the motivation to make changes within the plans for the next year and the primary reason you need to go through the process of verifying which plan is best for you considering all the changes in all the plans in addition to your change in circumstances. 


The bottom line is that there are many reasons why the plan that you have this year, may not be the best plan for you next year. The result could cost you a lot of money if you do not change plans. The time to make the decision is between Oct 15th and Dec 7th.

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