Out of pocket becomes bitter pill

Medicare prescriptions getting costlier in 2008

November 11, 2007|By M. William Salganik | M. William Salganik,Sun reporter

Coming soon to a pharmacy near you: the hundred-dollar co-pay.

As another enrollment period for Medicare prescription coverage opens - it begins Thursday and lasts until the end of the year - many of the plans are raising premiums, co-payments and deductibles.

The cost increases mean it's important to shop for Medicare prescription plans all over again. Even if you're happy with the plan you have, look closely: The cost of the plan could be quite different next year.

FOR THE RECORD - An article in Sunday's editions of The Sun about Medicare prescription plans should have noted that the copayment after the coverage gap or "doughnut hole" in 2008 will be $2.25 for generic prescriptions and $5.60 for brand-name drugs, or 5 percent of the cost of the medicine, whichever is greater.
The Sun regrets the error.

How different? According to a study by the consulting firm Avalere Health, monthly premiums are increasing 21 percent on average for prescription plans, with many of the steepest rises coming in those that have had the lowest premiums.

For example, the popular Humana PDP Standard plan charged a $6.44 monthly premium in Maryland in 2006, the lowest in the state. For 2007, premiums doubled to $13, still one of the lowest. For 2008, the premium will more than double again, to $27.20, more than $11 a month higher than the new lowest-cost plan.

Co-payments - the amount you pay out of pocket for each prescription - are going up as well, particularly for brand-name drugs.

One plan, WellCare Signature, will charge $107 for each brand-name drug not on its preferred list and $45 for a preferred brand name - and no co-pay for generic medications.

While they don't break triple digits, other plans have co-pays for nonpreferred brand-name drugs of $75 and up.

For example, the popular AARP MedicareRx Enhanced plan will charge $76.65.

In addition to the changes in price, two relatively popular plans, SierraRx Plus and WellCare Complete, will no longer be offered at all in Maryland. Members of those should look for new plans.

You have your work cut out for you.

52 plans offered

Fifty-two Medicare prescription plans are being offered in Maryland for 2008, all run by private insurance companies. Each one has different monthly premiums (from $16.10 to $97.50), different co-pays for prescriptions, different lists of covered and preferred drugs, and different networks of participating pharmacies.

The best plan for you isn't necessarily the one with the lowest premium; it's the one that will mean the lowest total cost, over the year, for your medications. The only way to identify that plan is to start with a list of your own medications, including dosage.

You can get a total cost for the year, and see customer service data, on the Medicare Web site (www.medicare.gov.) or by calling 1-800-MEDICARE. You can also get help and advice, and one-on-one shopping help, from local Senior Health Insurance Program (SHIP) counselors in each county and from the Maryland Senior Prescription Drug Assistance Program. (See box listing phone numbers and Web addresses.)

Picking a plan

Here are some pointers on picking a plan:

Watch the doughnut hole.

All plans for 2008 have a "doughnut hole" (known in Medicare-speak as "the coverage gap") where only generic drugs are covered - or there's no coverage at all.

You fall into the doughnut hole when you've filled $2,510 worth of prescriptions (total cost for you and the insurance company), and you're stuck there until your drug costs reach $5,726.35.

Meanwhile, you have to keep paying your premiums. Counting co-pays, deductibles and the doughnut hole, you could pay as much as $4,050 out of pocket. Here's the good news: Once you've spent that much, you get all future prescriptions for a co-payment of $5.60 or less.

Consider the alternative: a full health insurance plan.

In addition to prescription plans, the open enrollment period is a chance to sign up for so-called Medicare Advantage plans. These are HMOs and other full health plans. Many of them include prescription coverage, but some do not. Some offer extra benefits. On the other hand, some limit which doctors and hospitals they will cover. Some, called special needs plans, are open only to certain categories of people, such as those with chronic diseases. A Medicare Advantage plan might be a good deal, but make sure you understand the details of what you're getting into.

Help for those with limited incomes.

Individuals with incomes below $15,315 and couples below $20,535 qualify for a low-income subsidy, known to Medicare as "extra help." (There's also an asset limit.) If you qualify, you pay lower or no premiums and very low co-payments with prescriptions. You need to file paperwork with the Social Security Administration to get the help.

In addition, the Maryland Senior Drug Assistance Program pays $25 a month toward premiums for people with income below $30,630 for an individual or $41,070 for a couple; you need to apply separately to the program.

If you're already getting that help.

Both Medicare and the state assistance program are sending out paperwork to confirm that you still meet the income requirements. Be sure to complete the paperwork - if you don't, you will be charged full price.

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