Choosing a Medicare Part D Prescription Drug Plan

Are my parent's prescription drugs in the plan's formulary?

The single most important thing to find out about any drug plan is whether it includes the drugs your parent regularly takes in the list of covered medications, called a "formulary." If a drug isn't in a plan's formulary, the plan won't pay anything toward its cost. If your parent is enrolling when first turning age 65, get the plan's current formulary from the insurance company itself.

Also, plans change their formularies every year. So if your parent is choosing a plan toward the end of a calendar year or wants to switch plans during Medicare Part D's yearly open enrollment period from November 15 to December 31, you need to check the plan's formulary for the coming year.

Are my parent's prescription drugs placed in tiers?

Drug plans are allowed to create a tier system in which they pay more of the cost for some drugs than for others. Often the distinction is between a brand-name and generic version of the same drug, but it may also be between two medicines used to treat the same condition. The tier system can work to your parent's advantage or disadvantage. If your parent takes a generic version of a drug and a plan's tiered formulary offers that version at a lower cost, your parent saves money. If, however, the plan offers only a higher-cost brand-name version of your parent's drug, or your parent prefers the brand-name drug and must pay extra for it, that plan's tier system would cost her more money.

What would my parent's monthly co-payments be?

The fact that the formularies of two or more different plans include all your parent's medications doesn't mean that each plan would cost her the same amount in out-of-pocket co-payments. Each insurance company negotiates prices with the drug companies, so both the total cost and your parent's co-payment share for a drug can vary from plan to plan. This is on top of the fact that different plans place different drugs in payment tiers. Before actually buying a particular plan, your parent should compare the total out-of-pocket costs -- the premium plus all co-payments -- of that plan with those of comparable plans.

Does the plan do prescription drug substitution?

Medicare Part D allows a drug plan to override a doctor's prescription by substituting a less expensive generic or other equivalent (not identical) drug. If the plan would substitute a generic for a brand-name drug your parent regularly takes, she might choose to accept the substitution in exchange for a lower co-payment. If the plan would substitute an equivalent drug, however, your parent should check with her doctor to find out whether switching to the other drug might have any medical consequences or side effects.

Would any of my parent's prescription drugs require prior authorization?

Some plans require that an enrolled patient get the insurance company's prior authorization for coverage of a particular drug. This happens if the plan also covers a cheaper, supposedly equivalent drug. If your parent regularly takes a drug that requires prior authorization, she should find out whether the insurance company issuing the coverage will provide authorization before she joins the plan. If not, she should discuss with her doctor the advisability of taking the alternative drug. If the doctor advises against it, then she should look for a different plan.

Is step therapy a requirement for any of my parent's prescription drugs?

Medicare allows Part D drug plans to place certain drugs within a "step therapy" system. That means a patient must try alternative drugs before she gets coverage for a particular drug prescribed by her doctor. Only after your parent has taken the other drugs, and her doctor has certified that they're not as effective as the preferred drug, will the plan cover the drug her doctor prescribes.

Is there any coverage in the "doughnut hole"?

Once your parent's total drug costs (including what a plan pays and what she pays out-of-pocket) for the year add up to $2,510, she reaches the Part D "doughnut hole." Within this hole -- from $2,510 total costs until her out-of-pocket costs reach $4,050 for the year -- a Part D plan isn't required to pay anything. Some plans, however, offer a certain amount of coverage during the doughnut hole. Premiums for these plans are higher than for plans that don't cover anything in the hole. But if your parent has high yearly drug costs that will put her well into the doughnut hole, a higher premium might be worth the extra coverage she receives.

Does the plan waive any of the yearly deductible?

A standard Part D plan doesn't begin paying anything until your parent has personally spent $275 on covered prescription drugs for the year. However, some plans offer "first-dollar" coverage, which pays starting with your parent's first prescription. First-dollar coverage adds to a plan's premium cost. But if your parent will have more than $275 in drug costs for the year and a first-dollar plan otherwise fits her needs, it may benefit her to pay a little extra (up to $20 more) per month for this type of coverage.

Does my parent's preferred pharmacy participate in the prescription drug plan?

Most pharmacies honor drug plans from most insurance companies -- but not all do. If your parent has only one pharmacy near her, or for any other reason prefers a particular pharmacy, make sure it participates in the drug plan she's considering. If not, she has to consider whether she's willing to get her drugs elsewhere when deciding whether to enroll in that plan.