Medication costs can make up a large part of seniors citizens' budgets, but a few simple steps can easily save hundreds of dollars a year. The biggest single cost-saver? Picking the right Medicare plan. Whether you are preparing to renew your Medicare enrollment, or signing up for Medicare for the first time, you will want to make a careful selection so you don't end up spending more than you need to. Asking your doctors a few key questions—such as, Is there a generic?—can save you a bundle more.
First, focus on choosing the right drug plan, which depends in part on which drugs you take. The majority of seniors are enrolled under original Medicare, which includes hospital insurance (known as Medicare Part A) and medical insurance (Medicare Part B).
Getting drug coverage requires one of two additional extra steps. Seniors can either get drug benefits via a private plan regulated by the government, under what's called Medicare Part D, or they can get drug coverage bundled with a private Medicare Advantage plan. For a Part D plan, members pay between $15 and $165.40 a month in premiums for 2013, depending on plans and regions, according to the nonprofit Kaiser Family Foundation.
The alternative is a Medicare Advantage plan, also called Medicare Part C, which replaces original Medicare and often provides prescription-drug coverage as well. It is essentially a way to get Medicare A, B, and D all lumped into one. Medicare beneficiaries can enroll in Medicare Advantage to receive their benefits in a private health plan, such as a health maintenance organization (HMO). Across all Medicare Advantage plans with drug coverage, the average premium is $51 per month, according to the Kaiser Family Foundation. Consumers should evaluate on an individual basis whether this is the best option. Depending on your prescriptions and other health care needs, Medicare Advantage may or may not be better for you than original Medicare.
Comparing drug plans or Medicare Advantage plans can feel overwhelming.
There are several free, simple tools online that will help you wade through the options. One tool, PlanPrescriber.com, could save its users an average of $654 a year by helping them find the right health plan, according to a study the company conducted during the 2012 Medicare enrollment period. The study analyzed 12,000 users who entered their then-current drug plan and at least one prescription they were taking. The average savings were calculated by subtracting the customer's total estimated out-of-pocket spending on their then-current plan from their estimated spending on the plan recommended by PlanPrescriber. (Disclosure: U.S. News & World Report has a revenue-generating agreement with eHealthInsurance, which owns PlanPrescriber.)
Another tool is available through the federal government at Medicare.gov, which, like PlanPrescriber, allows users to compare up to three plans at a time. The main difference: PlanPrescriber CEO Ross Blair says using his site's tool takes seniors an average of three to four minutes versus about 15 minutes on Medicare.gov. They can also talk to agents over the phone.
ExtendHealth.com is another option, especially for people who may be uncomfortable submitting their information online. Though the tool also allows you to do a Web search and compare up to five plans at a time, the company has 1,200 advisers during enrollment season who can help you over the phone, says Bryce Williams, the company's CEO.
These three websites will also allow you to see drug pricing by pharmacy based on your location; each pharmacy can charge a different amount.
Regardless of which Medicare plan you settle on, keep these other money-saving tips in mind.
Have Drugs Delivered
For medications you take regularly for a chronic condition, opt for the convenience and potential cost-savings of mail-order. In addition to sparing you unnecessary trips to the pharmacy, mail-ordering can sometimes include a 90-day supply at a reduced cost, depending on your insurance company and what kind of meds you need. Once you enroll in an insurance plan you should be able to go that insurer's website to order your prescriptions delivered, or you can do it over the phone. Be sure to ask your doctor whether he or she needs to sign off on a 90-day supply. And take care to order refills before you need them so there isn't a gap of time when you don't have any pills.
Also beware of illegal pharmacies on the Internet, which can pose a serious danger by sending you fake or incorrect prescriptions. Legitimate pharmacies will ask for a faxed prescription from a licensed doctor and a detailed medical history. They will also clearly state their payment, privacy, and shipping fees, according to FBI warnings.
Ask your doctor if this is an option. The brand-name version of the drug you take is significantly more expensive than the generic form, if one is available.
For example, simvastatin is the generic version of the drug Zocor, which is prescribed to control elevated cholesterol.
Thirty 40mg tablets of the brand version of the drug will cost between $88.90 and $113.20 a month, according to a search in the Washington, D.C. area on PlanPrescriber, while the generic equivalent can go as low as $15 a month. The online Medicare tools described above will allow you to compare the generic and brand-name drugs.
Double the Dosage, and Split the Pill
Sometimes pills that are double the dose of your medication cost the same as a single dose, and can easily be cut in half. For instance, if your doctor says you need a 10-mg dose of a particular drug each day, ask him or her whether your medication comes in doses of 20 mg and if they can safely be split in half. Many drugs used to treat high blood pressure and depression can be split, as can all cholesterol-lowering drugs known as statins, according to Consumer Reports.
Enroll on Time
The open enrollment period for Medicare is from October 15 to December 7, with changes taking effect January 1. You can enroll for the first time when you turn 65, and there are also Special Enrollment Periods for when you move or become eligible for Medicaid.
Though Medicare drug coverage is considered voluntary, you must be getting drug coverage from another source that is at least as good as the offerings through the federal government. If you do not, you can face a penalty fee that grows each month you delay enrollment.
Beware: if you are receiving another form of drug coverage, you may actually end up spending more if you sign up with Medicare. This applies to members of the Federal Employee Health Benefits Program, TRICARE (military health benefits), and Veterans Affairs. If you are an active worker on an employer plan, you will want to talk to your human resources department to make sure you understand all of your options.
Some Prescription Drug Finding Tools
The federal government's own site at Medicare.gov helps users sift through different health plans, and compare them three at a time, side by side.
The tool will allow you to do a general search by entering your zip code information, or farther down on the page you have the option to do a more specialized search. A questionnaire will ask you how you pay for Medicare, then prompt you to enter your prescriptions. You have the option of entering the full name of your drugs, or selecting the first letter to scan a list of drug names.
Once you've entered all your prescriptions, you can indicate the pharmacy you want to use and continue to your plan results.
Phone numbers to call about enrolling in the plans will be provided, though some companies will also give you the option to enroll online.
PlanPrescriber mainly differs from Medicare.gov in the amount of time it takes for a user to go through the search process.
This is mainly because the starting questionnaire is shorter, but its drug-finding tool is also simpler. Instead of asking users to enter the full drug name, the system will request only the drug's first three letters. Once the letters are in, the drugs have been narrowed down and a clickable list of options appears directly underneath the letters.
You can select your dosage, and then you will be taken to a comparison screen. A prompt will ask you whether you would like an agent to call you and help you sort through the health plans. If you decide you want to continue browsing options yourself, you will be able to compare plans in a separate tab, three at a time.
Extend Health, owned by HR-consulting firm Towers Watson, entered the consumer market during the last Medicare enrollment period, but the company has been helping seniors find drug plans for about eight years through its relationships with employers. Extend Health has partnered with Fortune 500 companies, including Chrysler and General Motors, to reach employees. If you belong to a company that works with Extend Health, your employer may mandate that you work only with this broker.
The process is simple, though. Retirees receive a mailer, which asks them to select a date and time that they would like an adviser to call them. They can also go through the process online, and can compare up to five plans against one another. The company invests heavily in setting up people with brokers over the phone. The conversations will last an average of 23 minutes, says Williams, adding that seniors generally prefer to complete these enrollments over the phone.
Keep in mind that agents from PlanPrescriber or Extend Health may call you about their product offerings if you enter your personal information in their websites.