Medicare Part D

Medicare Part D is the prescription drug plan for people on Medicare. As you know, health care costs are a big concern for everyone. When doing personal financial planning, it's important to find ways to minimize your expenses so that you can save more for retirement. Keeping your drug costs down will go a long ways towards that goal.

Medicare Part D is designed to make drug costs very affordable for participants. Various insurance companies have contracted with Medicare to offer these Part D plans. You will be buying a Part D policy from the insurance company directly (or through an agent). But there are a few things you'll want to consider as you shop around for the best plan.

1. Make sure your Medicare Part D drug plan does not have a deductible. There are enough good plans out there with $0 deductible, you don't need to be paying one.

2. Check the drug formulary to see how much your drugs are going to cost. Each insurance company has their own list of what "tier" drugs fall into. This will let you know whether you'll be getting into the donut hole or not.

3. Make sure your drug plan offers mail order discounts for getting a 3-month supply of your prescription.

4. If you take mostly generic drugs, you're probably better off going with a lower cost value plan since you'll most likely never hit the "donut hole".

OK, so I threw out a few terms that may be new to you. Let me explain:

Donut Hole: After your total yearly drug costs reach $2,700, you enter the "donut hole" period where you pay 100% of the drug costs out of pocket until your total yearly out-of-pocket drug costs reach $4,350. This period of time where you are paying 100% of the cost of the drugs is commonly called the "donut hole".

Many of the higher priced plans (not the value plans) allow you to continue to get generic drugs for a co-pay during the donut hole period. Not very many people get into the donut hole, but if you're one of those, you may want to go with a plan that offers generic co-pays during the donut hole.

Once you get beyond the donut hole, you go back to paying small co-pays for all drugs, generic and brand name or paying 5% of the cost of the drugs.

Formulary: This is a fancy term that the insurance companies like to use for their list of covered drugs, and how much you're going to have to pay for them. Insurance companies put all covered drugs into a series of 'tiers', which tells you how much the co-pays are. For example: generics are usually a Tier 1 drug, and brand name drugs will be either a Tier 2 or Tier 3. Tier 2 usually means that it's brand name but there is an available generic. Tier 3 usually means that it's brand name and there is no generic available. Tier 3's are going to be the newest drugs, and usually the most expensive.

Some drugs may be so new that they are not included in the formulary, so they are just not covered at all. This is why you will want to check the formulary list to make sure all your drugs are covered, and give you an idea of how much you'll be spending each month. Keeping monthly expenses at a minimum is a key part of personal financial planning.

If you would like to get some free, no obligation quotes for Medicare Part D drug plans available in your state, just complete the form below and one of our Medicare specialists will contact you shortly.

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If you would like to request some free, no obligation quotes on the most competively priced Medicare Part D plans available in your state, just complete the form below, and one of our Medicare specialists will contact you shortly.

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