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Healthcare Today Medicare and Insurance

What to Expect After You Enroll in Medicare Part D

Medicare's new drug benefit was supposed to bring peace of mind to many seniors, including people who previously lacked drug coverage and individuals of modest means who qualify for extra help paying for their medications. But enrolling in a Part D drug plan does not necessarily mean that seniors can rest easy, consumer advocates caution.

"The 'buyer beware' sign needs to say up," says Robert M. Hayes, president of the Medicare Rights Center, a national organization that counsels and assists seniors who have questions about Medicare.

Part D is arguably more complicated than Medicare's hospital and physician insurance programs, in part because it is administered by private plans that decide what drugs to cover and how to share the costs with enrollees. Plus, the cost-sharing rules change throughout the year as a senior's drug spending increases.

Under Part D, enrollees must pay 100 percent of their drug costs once their prescription drug expenses for the year reach $2,250. Once those expenses top $5,100, "catastrophic" coverage kicks in and Medicare begins picking up 95 percent of the tab.

Simply tracking one's own cost-sharing obligations can be a challenge, Hayes notes. Seniors should keep a tally of how much they're shelling out so they'll know, say, when they've met the annual deductible or at what point during the year they will encounter a gap in coverage under the plan, known as the "donut hole."

While drug plans are supposed to track enrollees' out-of-pocket costs, the Medicare Rights Center does not advise seniors to rely on their insurer to maintain accurate numbers.

Seniors also need to be aware that certain expenses don't count toward their total out-of-pocket spending under Part D, he added. What an enrollee spends for medications that are not on their drug plan's formulary, for example, is excluded from that total. Also excluded: any costs incurred for medications imported from other countries.

And if you are a retiree who gets prescription drug coverage through an employer-sponsored plan that is supplemented though a Part D "wrap-around," payments that your employer makes on your behalf don't count toward Medicare's out-of-pocket limit, according to a report by the Henry J. Kaiser Family Foundation and Hewitt Associates.

If you find yourself facing a gap in Part D coverage during the year and you want to avoid significant out-of-pocket expenses, consider using generic drugs instead of costly brands, suggests Gail Shearer, director of Consumer Reports' Best Buy Drugs project.

"I think if people want to avoid the donut, even after they have enrolled in a plan, there is tremendous opportunity to save money by wiser decisions about what drugs to take," she says.

Say you need a relatively modest reduction in your cholesterol. You might consider switching to generic lovastatin from one of the brand-name statins. In the Sacramento, CA area, Consumer Reports found that seniors who switch from Lipitor to lovastatin can save from $279 to $737 a year, depending on the drug plan they choose.

"Even when you are enrolled in Medicare Part D, it's really worth having that conversation with your doctor," Shearer insists.

Navigating a drug plan's formulary, or list of covered drugs, once you are enrolled also poses a potential problem, Hayes adds. You may have chosen your plan because it covered a specific medicine. But there's nothing to prevent a plan from changing its formulary, as long as it gives 60 days notice.

People who are relatively sophisticated in cutting through bureaucracy and those who enlist the aide of a consumer advocate shouldn't have a problem getting their medications through the drug plans' exceptions and appeals processes, he says. Others will encounter difficulties.

"The neediest people, the oldest people, the sickest people will be least equipped to engage," he observes.

If you've enrolled in a drug plan for 2006 and decide during the year that you want to switch plans, you may have to wait. Generally speaking, seniors are allowed to change drug plans once a year, beginning November 15. There are exceptions, though, for example, if you move out of your drug plan's service area. So you may want to call 1-800-MEDICARE (1-800-633-4227) or visit www.medicare.gov.

Even if Medicare Part D is smooth sailing for you, there's a chance of disruption beginning in the fall of 2006. That's when analysts expect some drug plans to restructure, others to go out of business and new ones to enter the fray.

"It's still going to be complicated;" Hayes warns. "It's still going to be a whole new ballgame in the fall during re-upping time."