Premiums for Medicare Part D will increase by an average of 14% in 2008, to $25 per month, according to the Centers for Medicare & Medicaid Services. That may sound steep, but it still understates the pocketbook pain that will be inflicted on many participants. "The increases are concentrated among some of the bigger players," says Dan Mendelson, president of Avalere Health, a health-care advisory company. Policyholders covered by such market leaders as United HealthCare and Humana may especially feel the pinch.
Before you're locked in to a big premium increase, take time to compare your Medicare prescription-drug options during open enrollment, which runs from November 15 to December 31.
For example, the average cost of Humana's standard plan will jump nearly 69%, from $15.34 per month in 2007 to $25.88 in 2008. Prices for United HealthCare's AARP plans are also on the rise. In California, the monthly cost of the bare-bones, "saver" plan will more than double-from $9.80 to $21-and premiums for the Renhanced' plan, which provides additional coverage, will rise by nearly 58%.
But premiums are not the only factor to consider when calculating your total out-of-pocket costs for prescription drugs. When you add up premiums, deductibles and co-payments, a plan with higher premiums could actually cost you less by the end of the year.
Once again, the Medicare prescription-drug plan finder (www.medicare.gov/mpdpf) is the best tool to help you compare the total costs for your medications under each plan available in your area. For example, a Winter Park, Fla., resident who takes three typical generic medications for high blood pressure, plus Zocor for cholesterol, would pay $918 in 2008 in premiums and co-payments with a Health Net Orange Option 1 policy.
But click on "Use lower-cost drugs when available" and the price drops dramatically. Just switching from Zocor to the generic Simvastatin lowers the total annual premium to $193. Your best deal including generic drugs may vary by the medication, so be sure to ask your doctor about substituting a generic before you pick a plan.
The plan-finder tool also shows providers' complaint and customer-service records (click on "Get plan performance information"). If you'd like personal assistance, call 800-633-4227 to find the State Health Insurance Assistance Program, or SHIP, in your area.