Prescription Drug Plans in 2014
The Medicare Part D program has been one of the most successful government programs of all time. Since inception more than 6 million people have saved over $7 billion on prescription drugs, which means the average Medicare recipient has saved over $1000. While Medicare Part D improves slightly every year, the basics are still the same. All plans must meet certain guidelines as determined by Medicare.
What stays the same? Fundamentals!
Monthly Premium: All plans charge a monthly premium, usually ranging from around $15 on the low end to over $100 per month on the high end. Typically, as one would imagine, the high cost plans offer coverage above and beyond what the low cost plans offer. This, however, does not always hold true. In most cases, expensive options are only necessary if you absolutely need to take a very unique and costly prescription.
Deductible: Some plans, particularly the cheaper options, have a calendar year deductible that must be met prior to providing coverage. These plans can be great for people who purchase their plan early in the year, but become less enchanting as the year goes on because the deductible re-sets on January 1st of every year.
Drug Formulary: All plans have a prescription drug formulary that shows which drugs are covered, and what the co-payments will be for the drugs. Every formulary is different, and changes can be made mid-year with approval from CMS.
What Changes? Deductibles, Plans Offered, and the Donut Hole!
Deductible: The Medicare Part D deductible in 2013 was $325 and was a part of two of the most popular plans, the Humana Walmart plan and the AARP Saver plan. For 2014, the deductible will fall to $310, which means Medicare recipients will save an additional $15.
Plans Offered: Every year new plans are offered, and some are extremely competitive. In addition to new plans, companies will change their monthly premiums for existing plans, as well as their co-pays for certain prescriptions. Furthermore, companies can change the prescription drugs they cover through their plans.
Donut Hole: The donut hole for 2014 will be reached when combined spending hits $2850. This means people will hit the donut hole sooner as this is $120 less than in 2013. However, the out-of-pocket maximum will also decrease by $200 to $4550. In total, the donut hole will shrink by $80.
What can you do to save money on your prescriptions? It is estimated that only 5% of the people who purchase a prescription drug plan actually purchase the most affordable option. The average savings one would see by purchasing the most affordable option vs their current plan is $368 per year, not exactly a drop in the bucket. Knowing 95% of all people enroll in the wrong plan means you probably can find a better, more inexpensive option. You will need to compare all plans offered in your area based upon the prescriptions you are currently taking. You can use Medicare’s plan finder or have Medicare Supplement Shop do the work for you. In either case, it pays to compare.