Medicare Prescription Drug Plan Tutorial
by KKQ
November 21, 2005
If you've found this page you must be looking for help in traversing the confusing world of Medicare Prescriptions plans. I started this journey about a month ago. My parents had been told that their pension plan was no longer going to cover their prescriptions. Since my Dad is already on Medicare he would need to get coverage with the new Medicare Prescription Plan, also known as Part D. My first stop was the government website www.medicare.gov.
I found that many of their links were not working yet, and that the information regarding specific plans was still not fully listed. Since I was in front of the curve I ended up doing much more work than you should have to. I actually went down the list of companies that had plans in Illinois and started searching for their websites to research their specific plans. What an exercise.
I found that one plan did not even have a website. I called their phone number that I had gotten from the government website and talked to a customer service rep who told me their website was www.medicare.gov. I politely told her that the website was the government's, and didn't their company have a website devoted to information. I was again told that their website was www.medicare.gov. I have not bothered to check this company again to see if they indeed have a website now, but the very fact that a company did not even have a website would indicate to me that I should stay away from giving them any business.
The main reason to search each company was to see if my Dad's drugs were listed on their formulary. A formulary is a list of drugs that a company will pay benefits for. I found throughout my journey that some of my Dad's drugs were not listed on some formularies, and as such my Dad would be paying the full amount of the drug. Obviously I wanted to find plans that contained all of my Dad's drugs, thus keeping his out of pocket expenses as little as possible. Most companies had this information online.
You can now get all of the information you need at the government's website www.medicare.gov. They have a nice interface that is fairly easy to use, which will save you countless hours of researching each company. One caveat though, I have heard that you can't trust all the information on the site. So due diligence would dictate that you contact your top three company picks to verify that your drugs are covered, what the premiums are, and what the drugs will cost you over the course of the year.
Much has been said about the "doughnut hole" that most individuals taking more than a couple of drugs will fall into. This is referred to in actual Medicare lingo as "gap coverage". When you aren't covered (you are paying 100% of your drug prices) you've fallen into the doughnut hole. This officially occurs when you reach $2250 of total drug costs. That doesn't mean your out of pocket. It means the total drug costs that were paid by you AND the insurance company. After the $2250 of total drug costs has been reached your insurance benefits typically don't kick in again until you've achieved $3600 of YOUR out of pocket expenses. I did find some insurance companies that offer plans that would cover you in the "gap", so if this is a concern, please research the companies. You'll be able to tell if they offer gap coverage on the government website.
What follows is a step by step tutorial that takes you through what I feel is the most important part of the government's information, comparing Medicare Prescription Drug plans.
I hope this helps.
Good Luck,
Kim
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