Last week I was running a client’s list of prescription drugs (something I offer to do for all my clients) using the Medicare Plan Finder at the Medicare.gov website. The client takes three generic prescription drugs and as expected, the monthly drug cost would be minimal if she enrolled in any of the top three company plans shown by the Medicare Plan Finder.
Out of curiosity, I decided to check the cost of her prescription drugs against other drug plans that have similar premiums. Was I was in for a shock! Between two different Part D Prescription Drug Plans with similar premiums, there was a $215.00 difference per month in costs for the same drug. One plan covered the drug as a tier 2 generic drug and the cost was $4.00 a month. The other plan did not cover the drug at all so anyone signing up with that company would pay the full cost for that drug, which was $219.80 a month.
My clients have told me that before they talked to me they based their decision to buy a companies drug plan on the monthly premium and the annual deductible. So let us take the two plans mentioned above.
Company Y Company X
Monthly Premium $26.90 $18.40
Annual Deductible $0 $360
At first glance, it would appear that Company Y would be a better value because there is no deductible. However, what people do not realize is that on many plans the deductible does not apply for the plans covered generic drugs. So if your prescription drugs are considered generic by the plan’s formulary the deductible becomes irrelevant.
Currently, in 2016, there are 24 different Medicare-approved Part D Prescription Drug Plans in Colorado. Each Prescription Drug Plan has a different premium and a different formulary. A formulary will tell you what drugs are covered and what the cost is.
To find the right plan for your particular situation you need to run your list of prescription drugs through the Medicare Plan Finder at the Medicare.gov website or find an agent like myself who can do that for you. In addition, plans may change every year so the plans should be checked every year before or during open enrollment.