Choosing a Medicare Part D Plan That’s Right For You

Vermonters on Medicare can choose from more than 10 different prescription drug plans, with a wide range of monthly premiums. With so many options, how do you choose the right plan? We’ll walk you through the steps for reviewing plans and picking one that’s best for you.

When To Enroll

Enrollment in a Medicare prescription drug plan (also known as Medicare Part D) is optional for people on Original Medicare. However, there are significant advantages to enrolling when you first become eligible for Medicare.

If you sign up for a Part D plan during your Medicare Initial Enrollment Period (beginning three months before your 65th birthday, the month your birthday falls into, and continuing three months after), you’ll avoid a lifetime late enrollment penalty being added to the monthly Part D premium. The penalty is 1% of the national base beneficiary premium, multiplied by the number of months someone has gone without Part D coverage. People who have creditable drug coverage through employment, the military, or the Veterans’ Administration don’t have to sign up for a Part D plan immediately and can choose to enroll later.

Part D prescription coverage is provided by insurance companies like Blue Cross Blue Shield plans, which contract with the federal Medicare program. It’s a competitive marketplace, with many insurance companies offering multiple plans to meet seniors’ needs.

Each year during Medicare’s Annual Enrollment Period (October 15 to December 7), you can switch to a different Part D plan. Outside of this enrollment window, you can enroll in or switch Part D plans if you experience a specific life event or change in eligibility, such as:

• Moving to a new area
• Losing existing prescription drug coverage
• Income changes or qualifying for Medicaid or Medicare’s Extra Help program
• Living situation changes like moving to a nursing home
• Changes in prescription drug plan status, like Medicare terminating the plan’s contract

How to Evaluate Options

If you’re shopping for a Part D plan, here are steps you can take to find prescription drug plans and evaluate them.

1. Gather your medications. Compile a list of all the medications you take, including the frequency you take them, the dosage, and the pharmacy where you get each medication. It’s also helpful to include in the list what you are currently paying out-of-pocket for each medication, so you’ll be able to compare your current cost to what a drug would cost under a Part D plan.
2. Find available plans. Use the Medicare.gov website to view your current Part D coverage, if you have it, and a list of all the Part D plans available in your area. For each available plan, you’ll see its star rating for quality and performance, the annual deductible (the amount you’ll pay out-of-pocket each year before the plan begins paying its share of costs) and the monthly premium. If the medications you take are not already listed on the site, enter them and the pharmacies you regularly use.
3. Consider your medication needs. To help you narrow the options to consider, look at your medication needs. If you’re in fairly good health and don’t take many medications, or your medications are inexpensive, a plan with a lower premium could save you money. You may have to pay more initially out-of-pocket because of a higher deductible, but the savings from a lower premium might outweigh that in the long run. If you take a lot of medications or some expensive drugs, you may want to focus your attention on the low-deductible plans on the list, as a low deductible means the plan will start paying its share sooner.
4. Drill into the details. Once you’ve narrowed the list to a few possibilities, drill into the details of each by clicking the “see plan details” button. You’ll see what each of the medications you take would cost at pharmacies you use, along with estimated premium and drug costs for the rest of the year. You may want to note what the out-of-pocket cost would be for each drug you take, for later comparison. Also take note whether the pharmacies you use are in the plan’s network and preferred.
5. Compare pricing. If you are interested in a plan, click its “add to compare” button to add it to a comparison. Select several plans and click the “compare” button at the bottom of the screen to see a grid with a side-by-side comparison of each plan’s star rating, monthly premium, annual deductible, the number of your drugs that the plan covers, and the total estimated drug and premium cost for the rest of the year.
6. View more drug coverage. Each plan maintains a list of all the drugs it covers, called a formulary. Plans group covered medications into tiers, which can have different out-of-pocket cost levels. You can see where each of your medications is placed in a plan’s formulary by clicking the “view more drug coverage” button. For example, a drug that is a preferred generic in a plan’s formulary may not have an out-of-pocket copayment. It could also be exempt from the annual deductible. Another drug may have a fixed dollar amount copayment, or a coinsurance requirement—where you pay a percentage of the cost. You’ll also see information on any restrictions the plan places on a drug, such as prior authorization or step therapy. Taking note of how each plan’s formulary treats your medications will give you a better idea of your bottom-line costs.  

Making a Decision

Premiums are certainly a major factor in a decision about which Part D plan to enroll in, however, it should not be the only thing you consider. Also look at the annual deductible, whether the pharmacies you use are in the plan’s network, if all the drugs you take are covered,  the formulary tiers they are on, and the out-of-pocket costs for each medication. Check a plan’s star rating for an indicator of plan quality and performance.

Part D plan premiums and benefits can change every year, so even if you are happy with your current prescription drug coverage, during the Annual Enrollment Period it’s a good idea to check what next year’s coverage will be. You might find a plan that costs less and meets your needs even better!

Once you’ve selected a Part D plan, you can enroll with the insurance company directly or on the Medicare.gov website. We partner with three other New England plans to offer Blue MedicareRx prescription drug plans for residents in the service area. To learn more, check out our Blue MedicareRx plans.

Blue Cross and Blue Shield of Vermont is not connected with or endorsed by the U.S. government or the Federal Medicare program.
Blue Cross and Blue Shield of Vermont, in a joint venture with three other New England Blue plans, contracts with the Federal Government to offer Medicare prescription drug coverage, called Blue MedicareRxSM (PDP).

Blue MedicareRx (PDP) is a Prescription Drug Plan with a Medicare contract. Blue MedicareRx Value Plus (PDP) and Blue MedicareRx Premier (PDP) are two Medicare Prescription Drug Plans available to service residents of Connecticut, Massachusetts, Rhode Island, and Vermont.

Anthem Insurance Companies, Inc., Blue Cross and Blue Shield of Massachusetts, Inc., Blue Cross and Blue Shield of Rhode Island, and Blue Cross and Blue Shield of Vermont are the legal entities which have contracted as a joint enterprise with the Centers for Medicare & Medicaid Services (CMS) and are the risk-bearing entities for Blue MedicareRx (PDP) plans. The joint enterprise is a Medicare-approved Part D sponsor. Enrollment in Blue MedicareRx (PDP) depends on contract renewal.