Convenience From your Medicare Part D Plan Is a Double-Edged Sword

When you have Medicare Part D, the last thing you want to do is spend your time reviewing the booklets, flyers and letters your plan and/or other competitive plans may send you. Other than an auto repair manual or circuit schematic of your TV, could anything be stuffier than relaxing on the couch with a Medicare Plan Guide…oops, “Decision Guide” as they like to call them? Please.

Then again, once you’ve enrolled in a Medicare Part D plan, and made it through the onslaught of mailers, flyers and Medicare advertising that’s made to look like official government business so you’ll open it, it’s a good idea to stay connected with them. This is especially true if your plan sends you a letter. It usually means they have something important to tell you about your drugs or your network or your cost. You should always read their letters—in particularly those that begin with “Dear Your Name” rather than “Dear Member.” The same holds true if they call you. Again, it means there’s news about something that could affect your pocketbook or the prescriptions you take.

On the other hand, if a Medicare Part D plan sends you something that looks like advertising, it probably is. The reason being that once a plan has you as a member, their only job is to then KEEP you as a member for as long as they can. One way plans do that is by continuing to embed you deeper and deeper into their realm by enticing you into what is known as “sticky services.”

Sticky services are just what the term implies: a Medicare Part D plan for example, wants you to sign up for their auto bill pay service or their mail order prescriptions or online ordering of your medications, because it’s convenient for you. While that may be, what they don’t tell you is that once they’ve convinced you to take advantage of those conveniences, it’s that much thornier for you to leave their plan.

Let’s say you’re the type of Medicare beneficiary that shops every year, because you’re not convinced there isn’t a Medicare Part D plan out there that can offer you more for less than the one you have now. And let’s say you happen upon a different Part D plan that covers your drugs, but does so for less than you’re currently paying. Or maybe the monthly premiums are lower, and you don’t want to continue paying more than you should. You decide then, that you’d like to switch from your current Part D plan to that cheaper plan in October.

Ah, but it’s not so simple when you’re “embedded” in your current Part D plan. That’s because in order to leave your current plan you must “undo” all of those “convenient” sticky services, which is anything but convenient. In fact, your current Part D plan hopes that the idea of undoing all of your convenience is just enough of a pain that you’ll stay with them to avoid the effort. Sticky is as sticky does.

Then again, you may be the kind of Medicare beneficiary that rarely shops. The kind of member Medicare Part D plans absolutely love because it would take an act of God to get you to go through the process of switching plans and starting over with a new Medicare Part D insurer. Bodies at rest, as they say, tend to stay at rest. And your Part D plan is counting on you to stay put because it’s “comfortable.” And why wouldn’t you if you’re in the right plan, and getting the best value for your Medicare dollar? If you’re sure that’s the case, then the convenient services offered by your plan are positives—especially since you’re “sticking” with them through thick and thin.

The moral of the story is this: before you buy into all the sticky convenient services your Medicare prescription drug plan offers you, wait a while. Take some time to be sure you’re in the right plan and not overpaying for the same quality you may get from another Part D plan for less. Part D plans are NOT all the same. And sometimes the Plan you loved when you enrolled is not so lovable because they changed the prescriptions they cover or the prices they charge during the year—AFTER they have your enrollment. Yes, Part D plans can do that! So it’s to your advantage not to be a body at rest. Take the time to compare plans to be sure there isn’t something better out there for your specific situation. Make a few calls, visit a few websites, and if you’re feeling really ambitious, visit Medicare.gov where all Part D plans compete for your business, and show you their wares.

If after shopping around, you still like the Medicare Part D plan you’re in, the way they treat you when you call, the coverage they offer and the prices you’re paying for your premiums and your prescriptions, then let the conveniences flow, and stick with them.

Mid-year Formulary Changes

While it’s true that companies selling Medicare Part D plans can’t raise their premiums mid-year, sometimes things can happen that affect the level of coverage you’re getting from.  One of those is called a mid-year negative formulary change.

A “negative formulary change” happens when a Medicare insurance company changes what prescriptions are covered and how much they’ll cost you, right in the middle of the plan year!

Can they do this?  Sure can, and happens all the time.  If this happens to one of the prescriptions you take, you’ll get a nice little letter from your insurance company telling you what’s happening, and why.  You’ll usually get notified at least 60 days before the change is made.  Common changes your insurance company can make mid-year are:

  1. Remove the prescription  from the formulary because it was removed from the market
  2. Stop covering a prescription because Medicare decided to stop paying for it
  3. The insurance company placing quantity limits on the drug (usually due to high cost, or potential for abuse)
  4. Mandating prior authorization (which means special permission needs to be granted in order for you to fill your prescription)
  5. Moving prescriptions in a higher Tier (more expensive for you)

Let’s say you have a Medicare Part D plan who makes a negative formulary change to one of your prescriptions.  Well, next time you fill that prescriptions, insurance companies are required to send a written notice to you within 3 business days of the fill, explaining that in the future, you’ll have to contact your doctor for a different prescription.

How can they do this?  Well, it’s complicated, but I’ll summarize: Every year, plans new and old begin discussing the plans, prices and benefits they’re going to offer the upcoming year around February.  That’s right! Mere weeks after the Annual Election Period (AEP) ends, companies begin to plan for the following year.  From there, companies on their bids which they submit to Medicare around June/July for the following January.  Insurance companies must bid each year, and if they’re approved to offer Medicare Part D, they only have permission from Medicare for the upcoming calendar year.  As a part of this bid, these companies must tell Medicare what drugs they’re going to cover, what benefits they’re going to offer (copay tiers, etc.) and how much monthly premium their plans are going to cost you, the consumer.  Once Medicare accepts an insurance company’s bid, the company is locked into those prices and benefits for the entire year.  Likewise, once you pick a Medicare Part D plan during the AEP, you’re usually stuck with it for a year.

What are your options if this happens to you?  Well, for one, you should call your doctor and ask him or her to switch your prescription to something else that is on the formulary.  That’s by far the easiest solution. If you’ve tried everything else and really need to keep that prescription going, you can call your insurance company and request an exception be made.  The process is long and tedious and yes, there are lots of forms to fill out and phone calls to sit on.  If that’s your thing, or you for some reason really need the particular prescription that’s being affected, then by all means please travel down this path.

But at Prepare for Medicare, we strive to simplify Medicare, so your best bet is to get your doctor to find an alternative prescription, or simply pay for it out of your own pocket until the fall.  Then, vote with your feet!  AEP begins October 15.  Grab your prescriptions, head on over to Medicare.gov and find a new Medicare Part D drug plan that meets your needs.

Welcome to Prepare for Medicare

Hello, world!  Welcome to Prepare for Medicare. We’re going to cover a lot of ground on this site, hopefully a bit educational and some fun sprinkled in to make your life easier, save you money and hassle.  We’re talking about everything Medicare on this site with (I’m sure) some sidebars into retirement, money matters, etc.  Along the way, I’m going to teach you what you need to know and how to filter out all the noise.

Just before your 65th birthday (and for the rest of your life) insurance companies will absolutely flood you with ads. Direct mail will jam your mailbox, TV and newspaper ads with smiling celebrities or unassuming presenters will urge you to call for, “information” and blinking, flashing pay-per-click advertising online will promise the moon.  Meanwhile, news anchors and newspaper headlines blare out various injustices and scams perpetrated by insurance agents and companies that hurt normal Americans just tying to buy the right coverage.   Yet, for the more than 40 Million people already on Medicare and the estimated 10,000 Baby Boomers turning 65 every day, coverage choices must be made.

Sticking your head in the sand won’t help; the wrong choice could cost you thousands of dollars.  How do you know if you’re in the wrong plan?  Paying too much?  Enrolling in a quality, reputable plan?  Using a quality, reputable insurance agent?  Is the system beating you, or are you beating the system? If you’re a caregiver helping your parents or other family members decide, what’s your role?  Where can you turn for objective guidance?

It comes down to this: You can learn how to use the system to your advantage.  You either need to educate yourself and understand the tools to do it yourself, or be able to identify a professional independent insurance agent to help you navigate through the maze.  This site is a living, breathing opportunity for you to do both.

Welcome!