It's That Time of Year Again
Seniors can now switch Medicare drug plans
After reviewing dozens of Medicare Part D prescription drug plans last year with your parents and helping them pick the best one for their needs, you probably thought your work was done. Think again. November 15 marked the beginning of open season, the period during which seniors can sign up for or switch plans. About the only thing you can count on is that whatever plan your parents signed up for last year has very likely changed, either in cost or coverage. "It's not fun to go back and review all these insurance products," says Tricia Neuman, director of the Kaiser Family Foundation's Medicare Policy Project in Menlo Park, Calif. "But the devil's in the details, and it really can make a difference." So set aside some time to start from square one, and make it quick. The window closes December 31.
Last week, the Kaiser Family Foundation released an analysis of the 2007 Part D plans that offers insight into what to expect. First, even though many seniors felt overwhelmed by the number of plans to choose from last year, this time they'll be even more spoiled for choice, with nearly 450 more plans nationwide. (The government's Medicare Prescription Drug Plan Finder at www.medicare.gov can provide details on each plan, including premiums and lists of covered drugs, called formularies.) Although more than 70 percent of plans still won't offer coverage in the so-called doughnut hole -the gap between $2,400 and $5,451 in total drug costs that beneficiaries must pay on their own-those that do generally restrict coverage to generic drugs. A mere 1 percent cover brand-name and generic drugs in the doughnut hole. Generics are much cheaper than brand-name drugs, but a study by the advocacy group Families USA recently found that 18 of the top 25 drugs prescribed to seniors have no generic equivalent. That's why it's important to check each drug your parent takes to make sure it's on the plan's formulary at an affordable price.
Switcheroo. Seniors who stick with the same plan will most likely pay a higher premium next year, though probably less than $5 more. However, more than 175 plan premiums have risen at least 25 percent, which doesn't necessarily mean better coverage. Rates for Humana Complete, for example, are increasing on average 39 percent to $80.43. But in 2007, the plan will drop its coverage of brand-name drugs in the doughnut hole and switch to generic-only coverage. In general, a plan without gap coverage will cost $30.17 a month. One with generic gap coverage will run $51.11, and one covering brand names and generics, $93.46.
Premiums and formularies are only part of the equation, says Vicki Gottlich, a senior policy attorney with the Center for Medicare Advocacy in Washington, D.C. Plans are changing their cost-sharing arrangements, increasing copayments or moving certain drugs into higher cost groups, often called tiers, that require coinsurance or have higher copayments. "You may actually be paying more out of pocket even though the premium has been reduced," she says. So sharpen your pencil, fire up your computer, and get ready to spend some quality time with your folks.
This story appears in the November 27, 2006 print edition of U.S. News & World Report.