Seniors spending hundreds unnecessarily on Medicare Part D plans
Posted on 16 October 2012
By Mark Miller
Permanent URL of this article: http://retirementrevised.com/money/seniors-spending-hundreds-unnecessarily-on-medicare-part-d-plans
Seniors are wasting hundreds of dollars annually on Medicare Part D prescription drug insurance coverage they don’t need.
That’s the key finding of a new study by health policy researchers at the University of Pittsburgh, who studied actual Part D enrollee data for 2009. The researchers compared total spending by Part D enrollees – defined as premiums plus out-of-pocket spending – with the least expensive insurance option that would have met their needs.
Just 5 percent had picked the most cost-effective plan; more than 30 percent over-spent by $300 to $500 and nearly 20 percent over-spent by $500 to $1,000. Looked at another way, the researchers found that 22 percent of beneficiaries could save at least $500 a year by switching to the cheapest plan available.
Those amounts are significant, considering that most seniors live on fixed incomes. Half of all Medicare recipients this year have income of $22,500 or less, according to the Kaiser Family Foundation, and incomes are roughly half that amount among African Americans, Latinos and single seniors.
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