Fall is right time to evaluate your Medicare drug plan options

Don’t love everything about your Medicare coverage? Each fall, you have a chance to fix it.

Medicare’s fall open enrollment period runs from Oct. 15 and runs until Dec. 7. This is the time when enrollees can re-shop their prescription drug coverage (Part D) or Advantage plans–the managed care all-in-one alternative to traditional Medicare.Forewarned is forearmed – and for seniors, the warning just arrived in the mail.

Each September, enrollees in Medicare prescription drug and Advantage plans receive letters from their insurance companies detailing any changes in coverage for the year ahead. Called the Annual Notice of Change, the document is well worth reviewing, because it arrives just ahead of the annual fall plan open enrollment period, which runs from Oct. 15 to Dec. 7.

In many cases, the letter should be a wake-up call to re-shop coverage, especially where Part D drug plans are concerned. These plans often change their premiums from year to year, along with their rules for cost-sharing, coverage of specific medications – and even whether a specific drug will be covered.

Few Medicare plan users re-shop their coverage, and those who do tend to focus only on premiums. But it’s also important to consider cost-sharing, and to study the so-called formulary, which describes the rules for coverage of a medication – whether any quantity limits are imposed, or if the red tape of “prior authorization” will be invoked.

Drug plans are becoming more complicated. Most have deductibles, and just over half will charge the full amount permitted under Medicare’s rules ($405), according to the Kaiser Family Foundation (KFF). And most plans have shifted to using multiple copayment (flat fee) or coinsurance amount (percentage of total cost), rather than a single coinsurance rate. This is especially true for high-cost medications.

Keep in mind that premiums can change sharply from year to year. Among the top 10 standalone prescription drug plans (measured by enrollment), premiums will rise an average 9% (weighted by enrollment) next year, according to the Kaiser Family Foundation. But the average premium for the largest plan, SilverScript Choice, will be down an average of 9% next year. Meanwhile, the second- and third-largest plans will see average premiums jump sharply–17% for AARP Medicare RX Preferred, and 20% for Humana Walmart Rx.

Learn more at Reuters Money. Or, watch my discussion on the fall enrollment market with Christine Benz of Morningstar.

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