Medicare Part D: What to Expect This Open Enrollment Period

FRIDAY Nov. 13, 2009 -- Seniors enrolled in private, standalone Medicare prescription drugs plans (PDP) could encounter significant changes this open enrollment period, which begins Sunday.

Monthly premiums will rise 11 percent to $38.94, on average, according to an analysis published by the Henry J. Kaiser Family Foundation. That's up 50 percent from 2006, the first year that Medicare Part D drug benefits were offered.

"But these changes vary considerably by plan," added Jack Hoadley, a research professor in the Health Policy Institute at Georgetown University in Washington, D.C., and one of the report's authors. "Just among the five most popular plans, the premium for one is up by 22 percent for 2010, while the premium for another is down by 3 percent," he said.

So is Medicare Part D still a good buy? It all depends, experts say.

"The general advice is you do have to look beyond the premium and look at what's covered, what your expenses are for the course of the year and whether it works for you with the drugs that you take," said Paul Precht, director of policy and communications in the Washington, D.C., office of the Medicare Rights Center, a nonprofit consumer counseling and advocacy group.

Seniors can access Part D one of two ways. If they're in traditional Medicare, they can select a private PDP from a wide array of options. Or, if they are enrolled in a Medicare Advantage plan, like an HMO or PPO, with prescription drug coverage, they can receive Part D benefits through that plan.

Of the nearly 27 million Medicare beneficiaries in Part D, two-thirds are enrolled in standalone PDPs, according to the Kaiser Family Foundation analysis, which examines changes in the PDP marketplace.

With dozens of PDPs from which choose in every region, sifting through the various options can be a pain. For 2010, a total of 1,576 plans will be offered nationwide -- 113 fewer choices. Yet seniors will still have anywhere from 41 to 55 alternatives from which to choose in every region.

"I think it's a good trend that the number of plans is going down. I do think there is a thing as too much choice," said David Lipschutz, staff attorney for California Health Advocates, a nonprofit Medicare advocacy and education outfit.

Seniors will get little relief, however, from cost-sharing requirements. Sixty percent of PDPs, up from 45 percent in 2009, will require an annual deductible in 2010, for example. The maximum deductible that a plan may charge is $310.

Plan coverage of costs incurred in connection with Part D's infamous "doughnut hole" is getting stingier, too. In 2010, many beneficiaries will have to foot the bill for the coverage gap, which begins after the enrollee has incurred $2,830 in drug spending. Coverage resumes for drug costs above $6,440.

The House of Representatives on Nov. 7 passed a sweeping health reform bill that provides gap relief beginning in 2010 and eliminates the gap by 2019. However, the Senate must act before any health reform legislation is enacted.

There are also changes in store for seniors in "benchmark" plans, which offer basic Part D coverage to individuals who qualify for a premium. Of the 7.9 million getting extra financial help, 2.2 million must switch plans or pay a portion of their premium. If they want to stay in their current plan, their share of the premium will run roughly $8 to $10 a month, Precht said.

Part D experts urge seniors to take time during the open enrollment period to consider all of their options.

"It pays to do your homework," Lipschutz said. "The plan you're in now could change significantly next year, not only premium-wise but also the drugs it covers, the cost-sharing it charges for the drugs, the rules it imposes on accessing those drugs, [and] the pharmacy it contracts with."

Posted: November 2009


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