NCPC | Eldercare & Veterans Benefits Books | Eldercare Articles


Step-By-Step Instructions for Enrolling
in Medicare Prescription Drug Plans
by Thomas Day
Click here to learn more about Thomas Day

Step 1 -- Deciding Whether or Not You Need Prescription Drug Coverage
Try to match one of the categories below as closely to your own situation as possible. If you are receiving Medicaid or state assistance you will be taken care of automatically. In most cases you will be automatically enrolled in a prescription drug program by December 31, 2005. Your costs will also be subsidized and your out-of-pocket will be minimal.

1. You currently have prescription drug coverage through an employer, through government retirement or military retirement, through a retirement arrangement with a former employer or through a union contract.
This is going to require a lot more information then we can provide. You should know whether it's "credible coverage", how costs compare, how benefits compare and whether there is a change coming in your current plan. Generally the federal government retirement and military retirement health plans are good coverage and you don't need your own drug plan. We're sorry we can't help you more but we do recommend you do nothing until May of 2006. It's possible because of the changes under Medicare your current plan could change.

2. You are currently enrolled in what used to be called Medicare + Choice, an HMO that currently offers drug coverage.
You should have been notified of your options by your current health provider. If you have not been notified you should call and find out if changes are coming or if they will enroll you under their own plan. At this point do not enroll in a plan until you have more information.

3. You are under original Medicare and you do not have a Medicare supplement policy.
You should sign up for drug coverage whether you need it or not in order to avoid a late penalty further down the road. You should also sign up for a Medicare advantage plan that includes drug coverage since that will be an improvement over what you have now. In some states advantage plans with drug coverage can cost as little as zero dollars. That's right you pay nothing for a better plan than you have now.

4. You are under original Medicare and you have a Medicare supplement policy because you think you're uninsured without it.
You need a better understanding of how Medicare works. You should go back and read our complete article. You should sign up for drug coverage whether you need it or not in order to avoid a late penalty further down the road. If your supplement policy has drug coverage you need to drop that coverage since it is not cost effective compared to a Part D plan. The government is subsidizing at least 67% of the first $2,250 under Part D whereas the supplement receives no such subsidy. You can keep your supplement and notify your insurance company you no longer want the drug coverage and they will remove it and adjust the premium accordingly. If you decide to keep your supplement and you have low drug costs or none at all you can buy a basic standalone policy for as little as $2 a month to $15 a month depending on where you live. You should really consider dropping the supplement for a Medicare advantage plan with drug coverage. You can save the cost of the supplement and in some areas get into a basic combination plan for as little as $0 a month to $20 a month.

5. You are under original Medicare and you have a Medicare supplement policy because you like 100% of all of your costs paid. You wouldn't have it any other way.
You should sign up for drug coverage whether you need it or not in order to avoid a late penalty further down the road. You will probably not like a Medicare advantage plan and you will probably want to keep your supplement and buy stand-alone drug coverage. If your supplement policy has drug coverage you need to drop that coverage since it is not cost effective compared to a Part D plan. The government is subsidizing at least 67% of the first $2,250 under Part D whereas the supplement receives no such subsidy. You can keep your supplement and notify your insurance company you no longer want the drug coverage and they will remove it and adjust the premium accordingly. If your drug costs are low or nonexistent you can buy a basic policy for as little as $2 a month to $15 a month depending on where you live. If you have higher drug costs you can pay more and buy an enhanced policy.

6. You are under original Medicare and you have a Medicare supplement policy because you like the idea of paying premiums as a forced savings in order to avoid raiding your retirement savings or income to cover deductibles and co-pays. You would normally have enough money to cover these costs without a supplement.
It is not logical for you to keep your supplement and you should enroll in a Medicare advantage plan with drug coverage. Your forced savings plan is costing you at least 30% a month that is not going towards medical costs but is being diverted to insurance company overhead costs, profits and agent commissions. With an advantage plan you could do away with the cost of the supplement and invest the equivalent 100% plus interest in savings to cover your co-pays. And in many cases the advantage plan offers additional benefits you won't get under original Medicare.

 

Step 2 -- You have now made a decision to buy prescription drug coverage either stand-alone or in combination with a Medicare advantage plan .
Now you need to know if you have qualified or if you can qualify for government assistance. At least one third of all Medicare beneficiaries will qualify for subsidies with their drug coverage. You may have received a notification from Social Security in the summer of 2005 giving you instructions to sign up for financial assistance. And Social Security may be waiting for verification from you that you have purchased a plan. On the other hand if you did not send in the form or if you did not receive it and think you will qualify for aid you should reapply. Go to the following web site where instructions, qualification rules and an online form are available for you to refile.

http://www.socialsecurity.gov/prescriptionhelp/

 

Step 3 -- Now you can go online and look at the various plans available in your area.
Plans are designed as stand-alone or in combination with a Medicare advantage plan. Ironically you can get a combination plan for as little as zero dollars a month in some areas. But a basic stand - alone plan will always cost you although it could be as little as two dollars a month to $18 a month.

You must consider whether you want a basic plan or an enhanced plan. As a general rule, if your drug costs are less than $2,250 a year, a basic plan will cover at least 67% or more of those costs. Of course this assumes your drugs are on the formulary. If your drug costs are greater than $2,250 a year you may want to consider an enhanced plan that will carry you through the coverage gap. After the first $2,250, you pay 100% of the next $2,850 of drug costs. An enhanced plan will cost you more but should carry you through this hole in coverage. Make sure you understand how the gap is covered. For instance some companies may only allow you to use generic drugs through the gap where others will allow all drugs on the formulary to carry you through. Go to the following link and compare plans in your area. Look at both the Medicare advantage (MA) and prescription drug plans (PDP).

http://www.longtermcarelink.net/eldercare/ref_list_medicare_advantage_standalone_PDP.htm

Our guess is you will like the plans from companies that you recognize. And this makes sense. Undoubtedly, the market for these plans is overcrowded and it is likely that some of the companies offering plans will not survive and will withdraw at the end of the year or at the end of the following year leaving you high and dry. This will force you to find another plan. We recommend you consider the larger and stronger companies for your coverage.

 

Step 4 -- Make sure you're comfortable with the pharmacy network of the plan.
The plan or plans you choose are probably going to include most of the major pharmacies in your area. The Medicare site will give you a list of the closest participating pharmacies. Just make sure you search around and bring up enough spreadsheets until you find it. The list you are looking for has a hyperlink attached to the company name. By clicking on this link you can eventually find the participating pharmacies. go to the following link

Medicare Formulary Finder for Prescription Drug. click on "formulary (drug list) finder".

An alternative is to go to our list of links directly to the company you are considering. The company web site usually provides a list of participating pharmacies. You can access our list by going to:

Links to Organizations Approved by Medicare to Offer Medicare Advantage and Part D Prescription Drug Plans

 

Step 5 -- Matching the formulary to your current medications. Where you have decided to purchase a stand-alone prescription drug plan. (Read these instructions first but go to the next step if you're looking at an advantage plan)
Buying a stand-alone plan is easier than buying an advantage plan with drug coverage. You don't have to go through the extra step of trying to understand the medical coverage. And the Medicare site gives you little in the way of understanding benefits. Step 5 only applies to those of you who want a stand-alone plan.

When you have found the plans and the costs you like, you now have to consider whether the drugs you are taking are on the formulary list. A formulary is a list of the drugs the company will cover. Drugs not on the list you have to pay for out of your pocket. There are however rules where you can protest and have your doctor submit an exception form. It's also important to know that many of the companies require preauthorization for using certain drugs or they may require you to use a regimen of certain drugs first before you can use your prescription.

As a general rule we have found that almost all the companies cover the most commonly prescribed prescription drugs. So if you are taking these medications, it is likely they will be covered under most plans. If you think this is the case then the fastest way to compare is to go to the Medicare site and go through and enter your drugs one by one and then run a comparison. You do this by going the following link.

http://www.medicare.gov/MPDPF/Public/Include/DataSection/Questions/GeneralQuestions.asp

Note: this part of the Medicare web site appears to be in gridlock and inaccessible a great deal of the time. If you get an error message that the server is too busy there is an alternative. You can go directly to the companies and print off or compare formularies and avoid the Medicare web site. Go to the following link. Links to Organizations Approved by Medicare

Before you click on the Medicare link above we need to give you a few instructions.

Enter the zip code you want to check for coverage on the Medicare site page. You will then see the next two categories below on the Medicare site page. Answer them as indicated below. Then press the "continue" button.

B.

Current Prescription Drug Coverage

Prescription drug coverage through Medicaid

Prescription drug coverage through an employer or union retiree health plan

Prescription drug coverage through Medigap (Medicare supplement insurance)

Medigap (Medicare supplement insurance) without drug coverage

Prescription drug coverage through a Medicare Advantage plan (like an HMO, PPO, or Private-Fee-for-Service Plan)

I don't know

answer --> None of the above

 

 

C.

Eligible or Qualify for Additional Help

 Yes
answer --> No

If you have drugs that are not mainstream then using the Medicare web site can be a frustrating process to finding the right plan. We have an alternative idea for you. You need to go to the web site of the company offering the plan and print off the entire formulary list. You can't get these lists from Medicare. If your medication is not on the list you now have an alternative option. You can give copies of these lists to your doctor or doctors and explain your dilemma of not having coverage. You can request your doctors to offer an alternative treatment, if possible, in order to meet the requirements of your plan. Don't just give up and assume you have to pay a non-covered drug out-of-pocket. The list of approved Medicare companies is found at the following link.

Links to Organizations Approved by Medicare to Offer Medicare Advantage and Part D Prescription Drug Plans

 

Step 6 -- Matching the formulary to your current medications. Where you have decided to purchase a Medicare advantage plan with drug coverage.
Go back and read the information in step 5 on accessing the Medicare site for commonly prescribed drugs or getting the formulary from the Internet and going to your doctor to work around non-covered drugs.

But you now have the burden of trying to understand the difference between traditional Medicare and a Medicare advantage plan. As a general rule the advantage plan limits your out-of-pocket costs for hospital stays. In return you may have to pay a larger portion of that cost. But the advantage plan generally gives you better coverage for outpatient care. This design is typical of modern health insurance policies.

You have two options for learning about the plan. The first is to contact the company through the links we have provided and make an appointment with a sales agent. Some companies are offering seminars in the community and you may be able to attend one of those. The other option is to try and learn about the plan yourself by going to the company web site. Some of the companies do a good job of explaining their plans and the web site may prove to be an adequate solution. Other sites give you little information and essentially want you to talk to one of their agents.

The Medicare web site does offer specifics of advantage plans but understanding what it all means may be confusing to you. Besides you have to search around and bring up different spreadsheets until you find the one that contains the details of the plans. When we go back and try to duplicate that process we usually get lost and can't find it.

 

Step 7 -- Signing up for a plan.
If you used the Medicare site for your formulary, at least one of the options will give you a spreadsheet of all of the plans. If you find the right spreadsheet, there will be a button on the right hand side that says "enroll". You can click on that and enroll online. If you get confused and can't find it, your second option is to go to our list of company web sites and most of them will walk you through the enrollment process. If the Medicare web site is busy go directly to the company links we have provided and you can get help enrolling there. Links to Organizations Approved by Medicare