Jan. 10, 2006 -- Sorting through the new Medicare drug plans is a bit like panning for gold, a new report suggests.
That is, the benefits are there, but you've got to roll up your sleeves and do a lot of sifting to get your hands on them -- and the waters look pretty muddy right now.
That's the gist of a story in Consumer Reports, which attempts to separate the gold from the dross, giving consumers pointers on wading through the reams of the often-confusing details involved.
"Many are likely to throw up their hands in exasperation and avoid enrolling altogether," states the article. "That would be a shame, since the new drug benefit offers many consumers true savings."
For now, the plans "come with too much confusion," says Consumer Reports.
About 260 companies are touting their Medicare drug plans to 43 million Medicare participants, according to Consumer Reports.
The shopping process is "rather arduous," states the article. Many shoppers will find themselves "bothered" and "bewildered" by their choices, the writers predict.
The magazine, known for test-driving everything from food processors to SUVs, kicked the tires of the new Medicare drug plans.
With hundreds of companies in the fray, there's no way the magazine can tell anyone what plan they should choose. Everyone's needs are different. But the article does offer some advice.
Choosing a Plan
Consumer Reports recommends Medicare drug plans for people with low incomes, those with Medigap coverage, or people with annual drug bills totaling more than $750. Medicare's coverage, even on a basic plan, is likely to be better than that of Medigap, the article states.
People spending less than $750 annually on prescription drugs and who are in good health may want to wait or look at "equivalent" plans, which either have no deductible or a deductible lower than $250, according to the article.
Got a retiree policy that covers medications? You don't need to enroll in a new plan if your retiree policy is at least as good as your Medicare options, says Consumer Reports.
A recent AARP report concluded that for some people with multiple prescriptions, drugs can be gotten more cheaply through Medicare than through online Canadian pharmacies.
Sorting Plans Into Categories
Consumer Reports pulls no punches in describing the "market free-for-all that makes it difficult for consumers to make apples-to-apples comparisons of the 40 or 50, or even 60 plans that they may be offered in their area."
The article also provides these definitions of the three categories of plans:
- Standard plans: Follows the government's blueprint exactly, with a $250 deductible and 25% co-insurance. May not cover all out-of-pocket costs and can be hard to find.
- Equivalent or alternative plans: No deductible or deductible of less than $250. Users make co-payments of specified dollar amounts instead of paying a percentage. May work well for seniors who take few drugs or lots of inexpensive generic drugs.
- Enhanced plans: Low or no deductible, lower co-payments, and more coverage of out-of-pocket drug costs. May appeal to people whose total prescription expenses, including the government's portion, fall between $2,250 and $5,100.
Those terms aren't official. Sellers can name their plans anything they like, so it's crucial to get the details on your options.
More Medicare Tips
Ready to get started? Consumer Reports recommends using Medicare's web site, www.Medicare.gov.
If you call Medicare's phone number ((800) 633-4227), be ready to hear recorded announcements before reaching a person, the article advises.
- Check plans' drug formularies. Formularies are lists of covered drugs.
- Know that drug formularies can change anytime.
- Ask about restrictions on certain drugs. For instance, some plans must "preauthorize" use of certain drugs.
- Ask whether "step therapy" is used.
In step therapy, patients start by taking the least expensive drug that's appropriate for their condition. If that drug doesn't work, they try the second cheapest drug next, and so on until patients and their doctors find a drug that works.
Time Ticking Away
May 15 is the deadline for current Medicare participants to sign up for a Medicare drug plan.
Miss that deadline, and you'll pay for it. Your next window of opportunity is in November; your coverage won't start until January 2007, and you'll pay a late-enrollment fee.