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Medicare Basics

Things to Consider When Choosing a Prescription Drug Plan

While price is always important, it’s not the only thing to consider when shopping for a prescription drug plan. You’ll want to keep these other issues in mind when making a decision:

Formulary

A plan’s formulary is just a list of the medications the plan covers. If one or more of the medications you take is not on a plan’s formulary, you may want to look elsewhere.

Network

Most plans have a network of pharmacies they want you to use in order to get the best prices. If you go to a pharmacy that’s not in your plan’s network, you may have to pay more for your prescriptions. Make sure your preferred pharmacy is in your plan’s network.

Mail Order

Many prescription drug plans can give you a lower price if you have your medicine sent to you by mail. The plan may also require that you get a 3-month supply at a time. In most cases, this isn't a problem, but you may want to check with your doctor to make sure mail order is right for your medicines.

Service & Convenience

If you have a Medicare Advantage plan with prescription drug coverage, there’s generally just one company to contact if there’s ever an issue with your coverage. If your prescription drug plan is with a different carrier than your other Medicare coverage, it may be more difficult to coordinate benefits between plans.

Review Your Prescriptions

Gather all prescriptions you take before comparing plans and formularies. In addition to checking whether the formulary covers a certain drug, look at any restrictions placed by the insurer. Some require your healthcare provider to obtain authorization from the insurer before covering the prescription. You may also find a “step” requirement, meaning that the plan requires you to try a generic or cheaper version of the prescription before covering the version you currently take. Remember plans change every year, so you need to check the formulary every open enrollment period. Just because your plan covers your prescriptions now, that does not mean it will cover them next year.

Out-of-Pocket Costs

The temptation to choose the plan with the lowest premium can be strong. However, your out-of-pocket costs do not begin and end with the premium. Potential out-of-pocket costs include the premium, co-pays co-insurance, and deductibles. This is why a plan with a higher premium may actually cost less. Look at your total spend from the previous year to help determine the real plan cost.

Check the Plan Ratings

Every October, Medicare releases ratings on Part D plans, called the Medicare Star Rating System. Plans receive an overall rating (up to five stars), as well as ratings on four subcategories. These are:

  • Customer service
  • Member experience
  • Member satisfaction, including complaints, issues experienced receiving service, and how many members choose to leave the plan
  • Pricing and safety

If you have trouble deciding between two plans, a look at each plans' ratings helps tip the scales in favor of one or the other.