Huge disparity in Medicare Part D premiums
If you have started to compare Part D plans, you may have noticed that the premiums vary greatly. On the low end is the Humana Walmart-Preferred RX Plan with a monthly premium of $17 and $15 in some States. On the high end, you have individual Part D plans with premiums above $100/month. So, why the huge difference?
There are a few aspects to a plan that will determine the premium.
- The comprehensiveness of the plan’s formulary.
- Whether or not the plan has an annual deductible.
- The amount of the co-pays for individual tiers.
- Whether or not there is any benefit afforded in the coverage gap.
The first point, the formulary, will have the greatest influence on the monthly premium. The Part D formulary is the key to choosing the right plan. After all, if a plan includes more expensive drugs, the cost will have to be recouped.
Just as the formulary has the biggest influence on the plan’s premium, it is the most important consideration when comparing Medicare Part D plans. If your drugs are not included in the plan’s list, the other aspects of the plan are not relevant.
Do you need a plan with a higher premium?
That is a question that will require some research on your part. When you compare Part D it’s vitally important to review the plan’s formulary. Many people make the mistake of buying Part D coverage because the price is low or it was recommended by a friend or family member. This is a decision that requires you take the time to request the drug list from the companies you are considering.
The average Part D premium is estimated to be about $34/month. If you find a plan in that range and your medications are included on the list of covered drugs, you should compare that to other plans with the same criteria. There is no good reason to overpay for a Part D drug plan if you do not need the expanded formulary.
Enrolling in a Part D plan
Unless you are turning 65 or have a Special Enrollment Period, you should make your choice during the Annual Enrollment Period (AEP). The AEP begins October 15th and ends December 7th.
The only opportunity outside of a Special Enrollment Period to change Part D plans will be a Dis-enrollment Period for people who enrolled in a Medicare Advantage plan and would like to cancel their enrollment. This Dis-enrollment Period will begin January 1 and end February 14. Those people who dis-enroll from an Advantage plan must return to original Medicare and may purchase a stand-alone Part D plan.
Because of this lack of freedom to change plans, you will need to make a wise choice and make sure that your Medicare Part D premiums are not out-of-line.