Things to Think about when You Compare Plans
To get Medicare coverage for your prescription drugs, you must choose and join a Medicare drug plan. Regardless of how a Medicare drug plan decides to offer this coverage, there are some key factors that may vary. These factors are:
Coverage
Cost
Convenience
Peace of mind now and in the future
Some of these factors might be more important to you than others, depending on your situation and drug needs. This tip sheet explains some common differences for each of these factors to help you compare plans.
1. Coverage
Formulary
A list of drugs that a Medicare drug plan covers is called a formulary. Formularies include generic drugs and brand-name drugs. Most prescription drugs used by people with Medicare will be on a plans formulary. The formulary must include at least two drugs in categories and classes of most commonly prescribed drugs to people in Medicare. This makes sure that people with different medical conditions can get the treatment they need.
Prior Authorization
Some drugs are more expensive than others even though some less expensive drugs work just as well. Others drugs may have more side effects, or have restrictions on how long they can be taken. To be sure certain drugs are used correctly and only when truly necessary, plans may require a ęprior authorization. This means before the plan will cover these prescriptions, your doctor must first contact the plan and show there is a medically-necessary reason why you must use that particular drug for it to be covered. Plans might have other rules like this to ensure that your drug use is effective.
2. Cost
Premium
This is the monthly cost you pay to join a Medicare drug plan.
Deductible
This is the amount you pay for your prescriptions before your plan starts to share in the costs. Some plans offer a $0 deductible (usually for a higher monthly premium). No plan can have a deductible higher than $250.
Copayment/Coinsurance
This is the amount you pay for your prescriptions after you have paid the deductible. In some plans, you pay the same copayment (a set amount) or coinsurance (a percentage of the cost) for any prescription. In other plans, there might be different levels or tiers with different costs. (For example, you might have to pay less for generic drugs than brand names. Or, some brand names might have a lower copayment than other brand names.) Also, in many plans your share of the cost can increase when your prescription drug costs reach a certain limit.
Coverage Gap
This gap in coverage is generally above $2,250 in total drug costs until you spend $3,600 out-of-pocket. During this gap, you usually pay the full cost of your prescriptions. Some plans might offer some coverage during the gap. Even in plans where you pay 100% of covered drug costs after a certain limit, you would still pay less for your prescriptions than you would without this drug coverage.
3. Convenience
Drug plans must contract with pharmacies in your area. Check with the plan to make sure your pharmacy or a pharmacy in the plan is convenient to you. Also, some plans may offer a mail-order program that will allow you to have drugs sent directly to your home. You should consider all of your options in determining what is the most cost-effective and convenient way to have your prescriptions filled.
4. Peace of Mind Now and in the Future
Even if you don't take a lot of prescription drugs now, you still should consider joining a drug plan in 2006. As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium in the future since you may have to pay a penalty if you choose to join later. You will have to pay this penalty as long as you have a Medicare drug plan. If you reach the point where you have spent $3,600 out-of-pocket for drug costs during the year, the plan will pay most of your remaining drug costs. This protection could start even sooner in some plans.
Information provided by CENTERS FOR MEDICARE & MEDICAID SERVICES
Top Ten Things To Know About Part D Enrolling In A Part D Plan Contact Us for More Information Part D Home | 
