If you take regular prescriptions, you already know how expensive it can be. The older we get, the more chronic conditions set in, and our medications get even more expensive. That’s why having a prescription drug plan is so important. In this Medicare Wire article, we’ll share 7 ways you can optimize your Medicare Part D plans to get more for your money.
For people with Medicare health insurance benefits, there are two ways to get prescription drug coverage. You can enroll in Original Medicare and opt for a standalone Medicare Prescription Drug Plan (PDP). The second way is to enroll in a Medicare Advantage plan, known as Part C, that includes prescription drug coverage (most do).
7 Ideas to help you save out-of-pocket expenses:
- Avoid the late enrollment penalty by opting for prescription drug coverage as soon as you are eligible.
- Choose the right plan for you. Use the medicare.gov Plan Finder tool which can help you find out which plans are available in your area. Then you can compare the various options.
- A formulary is a list of drugs your plan covers. Be sure your plan’s formulary includes the drugs you need, or you will have to pay for them out-of-pocket. Many plans also group drugs into tiers, with those in lower tiers costing less than those in higher ones. If you have been using expensive drugs in a higher tier, check with your doctor if there are generic drugs or equivalent lower-tier drugs.
- Use generic drugs if possible with your doctor’s approval. They are as safe and strong as brand-name drugs, and there is often little or no copayment.
- Refill less often. Instead of buying the drugs you need every month, buy a two- or three-month supply. You’ll save money by buying in bulk, and you’ll only have to make one copayment to fill your prescription.
- See if there’s a pharmacy with mail service in your plan; it’s often less expensive.
- Find out if you qualify for Extra Help to help meet your prescription drug costs.
If you’re shopping for a Medicare Prescription Drug Plan, you can do that here.
Avoid Costly Penalties
Avoiding the late enrollment penalty is the first tip for a good reason. Many healthy people getting their Medicare benefits for the first time mistakenly assume they can save money by not enrolling in a prescription drug plan. After all, why buy something you don’t need? However, when it comes to Medicare, this can be a costly mistake.
By law, the Centers for Medicare and Medicaid Services (CMS) can impose penalties on Medicare beneficiaries who do not enroll in certain Medicare benefits when first eligible, then later want to use those benefits. Medicare Part D is one of the benefits that require on-time enrollment to avoid a penalty.
Avoiding Medicare Part D enrollment for a five year period could potentially double your annual premiums for five years after you do enroll. The late-enrollment penalty for Medicare Part D is calculated as the number of months you don’t have “creditable” prescription drug coverage times 1% of the average base premium ($32.74 in 2020). Using this formula, if you went without coverage for 60 months prior to the year 2020, you would pay a penalty of $19.60 per month. This is the amount you would pay in addition to your Part D plan premium and copays at the pharmacy.
In 2020, basic plans start at less than $20, so it isn’t worth the penalty you’ll pay if you avoid on-time enrollment.