7 Steps to Picking the Right Medicare Part D Plan for You

By Markets Fool.com

It's that time of year again. Fall, football...and signing up for Medicare Part D. The deadline for enrolling in the federal prescription drug program for next year is Dec. 7. Get ready with these seven steps for picking the right Medicare Part D plan for you.

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1. Don't assume your current plan is still the best for you

If you're already enrolled in a Medicare Part D plan, there's no guarantee that it will still be the best option for you in 2017. Actually, there's a chance that your current plan might not be an option at all. The number of plans offered are fewer next year than were available for 2016.

Also, pay attention to the plan details. Insurance companies often tinker with their benefit structures. Your current plan could very well have a different drug formulary, different deductibles, and different co-pay levels than it did in the past.

2.Consider using a different pharmacy

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Most people like dealing with familiar faces, whether it's at a grocery store, a bank, or a pharmacy. But limiting yourself to one pharmacy could end up costing you more with Medicare Part D, because some Medicare Part D plans negotiate better discounts with certain pharmacy chains.

The easiest way to find a new plan for 2017 is to go to Medicare.gov. You can also visit one of the state health insurance assistance programs (SHIPs). Either way, you'll be asked to select one or more pharmacies.

A smart approach is to select your preferred pharmacy or pharmacies first. Look at the different plans offered and their pricing. Then, before making your final selection, go back and change the pharmacies that you selected. Compare the plans and prices of the new selection against what you found with your initial pharmacy selection. It could be that using a different pharmacy can help save you money.

By the way, your pharmacy might provide assistance in selecting a Medicare Part D plan. Be aware that its recommendations probably will be biased toward the plans with which the pharmacy has a relationship.

3. See if there are any restrictions on your medications

The plan-selection process includes listing all of your current medications. Make sure you have the full list handy (including the dosage amounts) before going online or visiting a SHIP. Different Medicare Part D plans could have different policies about one or more of the drugs you take.

You will be able to see if a given plan places restrictions on any of your medications. For example, some plans could require prior authorization for certain drugs, which means that your doctor will have to obtain approval from the plan before prescribing the medication. Plans could also require step therapy, which means that you'll have to try a less expensive drug before "stepping up" to a more expensive drug.

Look at all of the plans closely. Just because one puts restrictions on a given medication doesn't mean that all of them follow suit.

Also, as mentioned in step one, plans change their features frequently. Even if your current Medicare Part D plan covers all of your medications without any restrictions, it could have new restrictions in place for 2017.

4. Check out the star ratings for each plan

Medicare's star-ratings system measures the performance of each Part D plan. Five stars is the highest rating, while one star is the lowest. Medicare rates plans based on multiple criteria:

  • Customer service
  • Member complaints, service problems, and dropping the plan
  • Member experience with the plan
  • Drug pricing and patient safety

Checking out each plan's star rating is a good way to weed out poor performers. However, it's not the most important consideration. A four-star plan that meets all of your needs at a lower cost could be better for you than a five-star plan that doesn't.

5. Compare all costs -- not just the premium

It might be easy to simply select the plan with the lowest monthly premiums. That's not a good idea, though. The premium is only part of what you will have to pay.

Look at all costs, including premium, deductibles, co-pay levels, and coinsurance amounts. Review your drug spending from the past year. Evaluating each plan's total costs to you based on your prior spending patterns could help you pick an option that is most cost-effective even if its premiums are higher than others.

6. Consider the Medicare Advantage alternatives

Medicare Part D might not be the best choice for you. It's possible that enrolling in a Medicare Advantage plan that offers drug benefits could be a smarter alternative.

If you use the Medicare.gov find-a-plan feature, you will have an option to view Medicare health plans with drug coverage in addition to Part D plans. Check the box to see the monthly premiums, deductibles, etc., for these Medicare Advantage plans.

7. Don't automatically go with your spouse's plan

You might enjoy shopping with your spouse, but do you always buy the exact same thing? Probably not. What's true for shopping in general is also true for shopping for a Medicare Part D plan.

Although it might seem more convenient for you and your spouse to select the same Part D plan, that convenience could cost you more than you expect if you take different medications. Remember that plans can vary dramatically on the benefits provided. The best plan for your spouse could be the worst plan for you.

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