Many seniors who are covered by Medicare are paying more than they need to for prescription drugs, according to a study by PlanPrescriber. The research suggests that far more Medicare beneficiaries could benefit from comparing their Medicare prescription drug plan options during the Medicare Annual Enrollment Period to determine if there is a more cost-effective plan available to them. In fact, according to the results, 90% of seniors are not in the Medicare prescription plan with the lowest out-of-pocket costs.
The study evaluated more than 22,000 Medicare beneficiaries who entered their current plan and medication information into the PlanPrescriber.com tool during last year's Medicare Annual Enrollment Period. Only 7% were in the Medicare prescription drug plan with the lowest total out-of-pocket costs available to them, and less than 10% were in the Medicare Advantage prescription drug plan with the lowest total out-of-pocket costs available to them. The study also found that in at least 18 states, nearly 90% of users could reduce their total out-of-pocket costs for prescription drugs by switching to a plan that optimized their prescription drug coverage.
Data showed that changing to the plan with the overall lowest out-of-pocket cost could potentially save the average user with a Medicare PDP $546 in 2011, or $505 for the average user with an MAPD Plan in 2011. The analysis found that the average customer would spend $2,110 per year with their existing Medicare PDP and $2,420 per year with their existing MAPD Plan.
Furthermore, 68% of those analyzed never hit the Medicare prescription drug coverage gap (the donut hole) in 2011 with their existing prescription drug plan or Medicare Advantage Prescription Drug Plan, the study shows. Among users who hit the donut hole, one-third (36%) would hit the donut hole before August of 2011 with their existing Medicare prescription drug plan.
The PlanPrescriber tool calculated the user's known prescription drug costs based on their specific drugs and dosages and factors in their monthly premiums, co-pays, coinsurance and deductibles to generate an estimate of their total out-of-pocket costs for prescription drugs in that upcoming year.
"Changes in medication usage notwithstanding, the prices customers pay for their coverage can change significantly from year to year because many insurers change components of their drug plans each year," says Steve Zaleznick, Senior Medicare Advisor of PlanPrescriber.com, a website that provides free comparison tools and educational materials for Medicare-related insurance.
These changes may include the drugs covered on a plan, the premiums, deductibles, coinsurance, or co-payments charged to enrollees, and different drug tier systems being used by insurers, which assign different coinsurance and co-payments to drugs depending on their tier. "Any one of these changes can significantly impact what a beneficiary pays out of their own pocket on a Medicare Part D prescription drug plan from year to year," he says. "In many instances the lowest cost plan for an enrollee in one year is not the lowest cost plan the following year."