How to shop for a Medicare Part D plan

prescription-drug-RR-GuideNote: this post has been updated with 2018 Part D marketplace information.

The annual Medicare enrollment period starts on October 15th and ends of December 7th. This is the opportunity for seniors to review their prescription drug or Medicare Advantage coverage, and to select new plans.

With dozens of plans available in most parts of the country, Medicare shopping can be a complex chore. Re-shopping your plan annually makes sense — insurance companies often change their offerings year-to-year in ways that can increase drug costs substantially, or make it more difficult to get certain drugs. At the same time, your drug needs may have changed since the last plan selection period in ways that make a plan less beneficial for you.

Research by the Kaiser Family Foundation found that, on average, just 13 percent of enrollees voluntarily switched their drug plans over four recent enrollment periods. The switching rate is nearly identical for those in for Advantage plans, the all-in-one managed-care option offered to Medicare beneficiaries. That’s unfortunate, since plenty of people are leaving money on the table. The Kaiser study found that 46 percent of plan switchers saved at least 5 percent the following year, mainly on premiums.

Start the process by reviewing your the Annual Notice of Change (ANOC), which health insurance companies must send to you each fall by September 30th. The notice describes any changes in premiums and co-pays for the year ahead, and lets you know whether your medication will be covered.

Keep in mind that premiums can change sharply from year to year. For 2018, 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.

And if you haven’t evaluated your coverage in a while, consider how much premiums change over the years. The AARP Medicare RX Preferred premium has risen 218% since the plan’s launch in 2006, for example. Humana Enhanced is up a whopping 437% since 2006.
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