As a Medicare beneficiary, it’s important to review your plan each year to make sure it still meets your needs and budget. Changes in the rules and regulations of your plan can have an impact on your care and costs if you don’t stay up to date with them.
What are the Reasons to Review Your Medicare Drug Coverage Each Year?
When you enroll in a Medicare prescription drug plan, you are responsible for certain costs, and Medicare is responsible for other costs. The cost of your Medicare drug plan will vary depending on which one you select. The cost of your prescription drug plan and the cost of your medications can both fluctuate from year to year.
This is what you pay each month to a health or drug plan to be a member. Cost will vary
from one plan to another.
This is the amount you must pay each year for your prescriptions before your Medicare
drug plan starts to pay any of the costs. Deductibles vary by drug plan. In 2023, some Medicare drug plans may have a deductible of up to $505, while other plans do not have any deductible.
Most plans that have a deductible waive it for Tier 1, and many waive it for Tier 2 drugs as well.
This is the amount you pay for each of your prescriptions after you have paid the
deductible. In most Medicare drug plans, you pay the same copayment (a set amount) or
coinsurance (a percentage of the cost) for any prescription. The amount of the coinsurance or copayment may change during the year as your costs increase.
Medicare Part D prescription drug plan companies evaluate their selection of drugs covered (in the plan formulary) and prices. The tier level of a plan formulary may be impacted by this.
For example, a medication may be moved from tier 1 of your plan to tier 2 or 3. Typically tier 1 medications are the lowest cost whereas tiers 2, 3, 4, and 5 cost more.
In addition, rules for prior authorization from your doctor may change. Or, your plan may enter into an agreement with a specific pharmacy to reduce costs. If that pharmacy isn’t an option for you, you may end up paying more than you have to.
Also, your current plan can decide not to cover certain medications at all, which would mean you would have to pay the total cost out of pocket.
One more thing to know: Your copay/coinsurance amounts can change during the year. The insurance company can change the Tier levels during the year. We know it doesn’t seem fair, but it can happen.
When can I have my drug plan reviewed?
Unless you have a special election period (aka SEP) the only time you have to change your drug plan is during the Medicare Annual election period. You can read more about special election periods in our last article HERE. The Medicare annual election period runs from October 15th through December 7th of each year. If you decide to change plans, your new plan goes into effect on January 1st of the following year.
How do I review my drug plan?
Understanding Medicare is not always easy. Deciding which plan would fit you best requires a lot of research and often leaves individuals feeling overwhelmed trying to pick the right one.
We recommend reviewing your annual notice of change each year that you receive each year. They are typically sent out by the insurance companies in the fall, around September.
Each year, an annual notice of change (ANOC) is sent to inform members of any important changes to their current plan for the upcoming plan year. The ANOC provides a summary of changes to the plan costs and coverage that will take effect on January 1st of the subsequent year.
What if my current plan is still the best option?
If, after doing a drug plan review, your current plan is still the best option, then AWESOME! You generally don’t need to do anything. If your current plan is still available, it will just roll over for the next year, and you do not need to complete an application or re-enroll.
What can I do if my prescription drug costs are expensive?
Unfortunately, sometimes after a drug plan review, the plan that appears to meet your budget may still cost quite a bit. This is likely because your medications are Tier 3, 4, 5, or 6. You may fall into the donut hole. Basically, your medications are very expensive!
The good news is that there are a lot of options for you. Check out this article on ways to reduce your drug spending. https://medicarequick.com/medicare-part-d-vs-goodrx/
Once enrolled, many people assume that their prescription drug plan will remain the same for many years to come – this however is not usually the case. Insurance companies are continuously making changes to the plans, which may have a direct effect on coverage or cost-sharing for you. We always recommend our clients go over their plan details every year in order to make sure they are getting what they need from their plan at an acceptable cost.