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Lowest Part D Premium Not Always The Best

Humana Part D Premium

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.

What Does Part D Cost?




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.

2 comments

  1. I have medicare complete and I noticed that the 2011 Medicare book says.”That Secure Horizons will not pay for Drugs. Why not I am healthy 71 yrs old woman and I am on a very low ss income. It doesn’t look like we seniors are really being looked after. If thats what President Obama calls balancing the budget, then why on the backs of those who have kept this country going during the depression and afterwards with the ressessions.
    thanks
    Leonore Albert

  2. Leonore, I would be frustrated too if Medicare Complete was not going to cover my drugs. But that is not the case. I’m not sure which 2011 Medicare book you are referring to, but 2011 AARP Medicare Complete is a Medicare Advantage plan that does include Part D coverage. There are Advantage plans that do not include Part D, such as AARP Medicare Complete Choice Essential and many others.

    Political opinions aside, if a Medicare Advantage plan offers coverage that does not include Part D, it is your choice as to whether that plan would suit your needs. The current administration has no bearing on whether a particular insurance company offers a Medicare Advantage plan with or without Part D drug coverage.

    If you have Medicare Complete for 2010 and you received notice from them that your plan was not going to be offered for 2011, you will have a Special Enrollment Period to choose another plan or return to original Medicare. I’m not sure that is the case, so I would take a look at the 2011 Medicare book that you referenced to determine it’s validity. Also you may want to speak with a local agent about your 2011 Medicare Advantage options. I hope that helps.
    David

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