Medicare Part D Question

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
LifeIsGood
Posts: 674
Joined: Mon Feb 11, 2008 8:43 pm
Location: Atlanta, GA

Medicare Part D Question

Post by LifeIsGood » Thu Sep 06, 2012 7:11 am

I only take one prescription drug that I am currently purchasing from Canada. My annual outlay is about $130. I was advised to avoid part D coverage at this time. My concern is that if I should develop a medical condition that requires expensive medication, I'm likely to incur a substantial expense.
I'm interested in your thoughts.
Thanks.

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: Medicare Part D Question

Post by sscritic » Thu Sep 06, 2012 7:16 am

How much is the Part D penalty?

The cost of the late enrollment penalty depends on how long you went without creditable prescription drug coverage.

The late enrollment penalty is calculated by multiplying 1% of the "national base beneficiary premium" ($31.08 in 2012) times the number of full, uncovered months you were eligible but didn't join a Medicare Prescription Drug Plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium.

The national base beneficiary premium may increase each year, so the penalty amount may also increase each year.
...
You may have to pay this penalty for as long as you have a Medicare drug plan.
http://www.medicare.gov/part-d/costs/pe ... nalty.html

JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 3:58 pm
Location: Southwest Florida

Re: Medicare Part D Question

Post by JDCPAEsq » Thu Sep 06, 2012 7:34 am

I wouldn't pass it by and incur the late enrollment penalty. I pay $181.20 a year for Humana coverage. Well worth it just to lock in the coverage for life.
John

carolinaman
Posts: 3211
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Medicare Part D Question

Post by carolinaman » Thu Sep 06, 2012 7:46 am

You can also get a very low cost plan based upon your prescription needs. You get to change plans every year, so if you later have to take more prescriptions, you can upgrade your plan. You are blessed to only require one prescription medication when medicare eligible but that can change quickly. My doctor is big on prevention and even though I have good health he has me on several preventive meds. Meds are very pricey and can put a serious dent in your budget without prescription coverage.

User avatar
Steelersfan
Posts: 3509
Joined: Thu Jun 19, 2008 8:47 pm

Re: Medicare Part D Question

Post by Steelersfan » Thu Sep 06, 2012 7:47 am

I looked at delaying since I only take two generic meds and am in good health. I decided the risk/reward didn't argue in favor of delaying.

And then I signed up for a Medicare Advantage plan that included meds in the base price so the question became moot anyway.

mur44
Posts: 665
Joined: Tue Feb 27, 2007 9:30 am

Re: Medicare Part D Question

Post by mur44 » Thu Sep 06, 2012 2:35 pm

It depends on your Age, Wealth and Health including Family History.
Certain drugs are very expensive.

Open Enrollment is October 7th through December 7th with
coverage starting January 1st. Therefore, you can be without
drug coverage for about a year. Depending on your income,
many drugs are available at discount from many sources,
including Pharmaceutical companies and others.

If you want peace of mind, buy the cheapest Part D drug plan.



Disclosure: I am a Certified Volunteer Medicare Counselor from NJ

User avatar
nisiprius
Advisory Board
Posts: 36501
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Medicare Part D Question

Post by nisiprius » Thu Sep 06, 2012 4:30 pm

See mur44's comments, below.

This is what I had written:

I believe the key to the decision should be

a) looking up the prices of some expensive and not-that-rarely-prescribed drugs. Avastin, which is used to treat colon cancer, costs something like $90,000/year

b) reading about the "catastrophic" coverage of Medicare Part D, which kicks in when you've spent about $5,000 out-of-pocket for the year, and covers 97.5% of drug costs above that.

So, without Medicare Part D you will pay $90,000 for a year of Avastin treatment, and with it you will pay "only" about $7,125.

In short I think everyone needs Medicare Part D for the catastrophic coverage. Whether it's a good prepaid plan for relatively inexpensive prescriptions is beside the point.


Avastin was obviously not a good example, and I guess I don't know whether there are drugs you take at home that could subject you to catastrophic costs.
Last edited by nisiprius on Thu Sep 06, 2012 8:27 pm, edited 2 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

User avatar
cheese_breath
Posts: 7839
Joined: Wed Sep 14, 2011 7:08 pm

Re: Medicare Part D Question

Post by cheese_breath » Thu Sep 06, 2012 5:13 pm

JDCPAEsq wrote:I wouldn't pass it by and incur the late enrollment penalty. I pay $181.20 a year for Humana coverage. Well worth it just to lock in the coverage for life.
John
I have the same plan. I never use enough to satisfy my deductable, but it's nice to know if my health changes I can switch to any part D plan at the next enrollment period without any penalties.
The surest way to know the future is when it becomes the past.

User avatar
pjstack
Posts: 1308
Joined: Tue Feb 20, 2007 5:03 am
Location: Harbor City, CA

Re: Medicare Part D Question

Post by pjstack » Thu Sep 06, 2012 6:21 pm

At least the OP realizes that his/her health may change over time.

I'm always amazed (or amused) at the optimism some people have as an excuse for saving a few bucks!

Your health will NOT improve with age, in fact it will end with death! The only way around that is an early death, hardly a satisfying solution.
pjstack

mur44
Posts: 665
Joined: Tue Feb 27, 2007 9:30 am

Re: Medicare Part D Question

Post by mur44 » Thu Sep 06, 2012 7:39 pm

Generally speaking, prescription drugs taken at home
are covered by Medicare Part D. Drugs administered in
doctor's office are covered by Part B. If drugs are
administered in a hospital, Part A covers.

If a drug like Avastin is administered in doctor's
office, Part B covers.

Most Medicare beneficiaries enroll in a Part D plan
if they do NOT have alternate (such as retiree/union) creditable coverage.

Tony
Posts: 217
Joined: Sat Mar 10, 2007 5:20 pm
Location: California

Re: Medicare Part D Question

Post by Tony » Thu Sep 06, 2012 11:09 pm

JDCPAEsq wrote:I wouldn't pass it by and incur the late enrollment penalty. I pay $181.20 a year for Humana coverage. Well worth it just to lock in the coverage for life.
John
+1
Tony

S&L1940
Posts: 1591
Joined: Fri Nov 02, 2007 11:19 pm
Location: South Florida

Re: Medicare Part D Question

Post by S&L1940 » Fri Sep 07, 2012 12:53 am

nisiprius wrote:See mur44's comments, below.

This is what I had written:

I believe the key to the decision should be

a) looking up the prices of some expensive and not-that-rarely-prescribed drugs. Avastin, which is used to treat colon cancer, costs something like $90,000/year

b) reading about the "catastrophic" coverage of Medicare Part D, which kicks in when you've spent about $5,000 out-of-pocket for the year, and covers 97.5% of drug costs above that.

So, without Medicare Part D you will pay $90,000 for a year of Avastin treatment, and with it you will pay "only" about $7,125.

In short I think everyone needs Medicare Part D for the catastrophic coverage. Whether it's a good prepaid plan for relatively inexpensive prescriptions is beside the point.


Avastin was obviously not a good example, and I guess I don't know whether there are drugs you take at home that could subject you to catastrophic costs.
four years ago - at age 69 - I was a fairly healthy guy using two drugs for chronic conditions.
then, Kidney cancer - contained at this point - and atrial fibrillation entered my life. suddenly my drug count and costs were going up.

good thing I went for the Part D insurance plan. and, someday I may be a candidate for drugs like Avastin and others that are used to fight Renal Cell Carcinoma which cost thousands per month.

Insurance is the key here. we cover our home and autos for dangers we may never experience. why not cover some thing not easily replaced, our bodies and well being? whether the Advantage plans or Part D, the coverage is a good long term investment.
good luck, Rich
Don't it always seem to go * That you don't know what you've got * Till it's gone

moolman
Posts: 125
Joined: Sat Jan 30, 2010 5:50 pm

Re: Medicare Part D Question

Post by moolman » Fri Sep 07, 2012 2:03 am

I have a lot of experience about this because of my profession. The main reason for not delaying coverage is because of the lifetime penalty that you would occur, you're monthly premium would be higher for the rest of your life for not signing up. Besides that you can find pretty cheap plans if you're not taking any major drugs. I have helped many people during open enrollment sign up for plans. Enter all your info into the medicare website then the drug that you take and sort by total cost, which is drug cost plus the premium and sign up. When you start to have more drugs in the future, you just go back, enter those in and pick the plan with the best deal.

Medicare Advantage which was called Part C, is essentially Part A+B+D, so it has a prescription benefit and is considered coverage, so no penalty if you do that.

Medicare Part D will eventually change in the near future. The whole purpose of the doughnut hole and the high deductible is to discourage use and make people find and use the cheapest drugs. With the coverage gap/doughnut hole disappearing and the advent of specialty drugs that cost thousands for one prescription, Part D will be dead soon. Think about it, one prescription for Enbrel will take you to catostrophic coveage in one shot. Enbrel and Humira just became the most prescribed drug by cost in the US and there's plenty of new biologics in the pipeline that are just as expensive.

LifeIsGood
Posts: 674
Joined: Mon Feb 11, 2008 8:43 pm
Location: Atlanta, GA

Re: Medicare Part D Question

Post by LifeIsGood » Fri Sep 07, 2012 7:24 am

Thanks for all the thoughtful input. I think it makes sense to go with the Humana-Walmart plan ($15.10/month). It appears that it would be cheaper to take this "bare bones" option and continue to buy the drug I'm on from Canada. If I go with a plan that covers this drug, I'm up to $42.10/month .
Thanks again for the help.

Yam the Bomb
Posts: 97
Joined: Mon Aug 20, 2012 8:20 am

Re: Medicare Part D Question

Post by Yam the Bomb » Fri Sep 07, 2012 8:00 am

You are exactly correct. You want to always take a Part D plan unless you have other credible coverage. Even if you take NO medications t all, you need to take part D as soon as you are eligible.

Insurance is not designed to make everyone come out ahead financially. If you only had to buy car insurance after you wrecked your car, no insurance company could stay in business.

Even though the Part D program is government subsidized, it it through private insurance companies. They required the government to build in severe penalties for people who would try to game the program buy only buying in AFTER they get prescribed expensive medicines. If they allowed people to do that, the entire system would fail.

The healthcare system will be the same way if the guaranteed issue part of Obamacare kicks in. They can NOT allow people to buy in AFTER they have health problems with no penalty or EVERYONE would do that and break the system. All people have to pay into it (healthy and unhealthy) for it to work and cover those of us that need expensive treatments at some point in our lives.

That cheap Humana plan is a good choice for people that don't take many meds.

User avatar
SpringMan
Posts: 5358
Joined: Wed Mar 21, 2007 11:32 am
Location: Michigan

Re: Medicare Part D Question

Post by SpringMan » Fri Sep 07, 2012 9:01 am

We use First Health Value part D which is $24.20 per month. There are 0 deductibles with it. Walmart Humana is cheaper but has deductibles. So far, so good, generics have been free. I agree that part D is advisable even if one's current drug usage does not justify it. It is insurance against unknown future drug needs.
Best Wishes, SpringMan

moolman
Posts: 125
Joined: Sat Jan 30, 2010 5:50 pm

Re: Medicare Part D Question

Post by moolman » Fri Sep 07, 2012 9:58 am

Just because Humana/Walmart says it's not covered doesn't really mean it's not covered and you'd have to go with the more expensive plan choice. There are things such as grandfathering, coverage exceptions, tier exceptions, for you to get the drug. It depends on the drug too. I can give you the best answer if I knew what the drug was unfortunately. Unless the drug is some elective brand drug, as in there's a generic available but you insist on taking the brand and it's not a for psych or seizures. You can PM me if you want.

User avatar
SpringMan
Posts: 5358
Joined: Wed Mar 21, 2007 11:32 am
Location: Michigan

Re: Medicare Part D Question

Post by SpringMan » Fri Sep 07, 2012 10:19 am

By deductibles I am referring to an annual amount of out of pocket expense before the insurance kicks in anything. With Walmart Humana it does pay anything until you pay $320. http://www.humana-medicare.com/humana-m ... x-plan.asp The First Health Value Plan by Covington cost $24.20 per months vs $15.10 forWalmart Humana. First Health Value pays from the get go, no waiting until you hit a $320 deductible. 320 divided by 12 is $26.67 per month, add back the $15.10 per month premium and it is easy to see if you plan on using the insurance, the First Health Value is a better deal. If your goal is just to sign up for the cheapest Part D as a place holder to avoid the penalties later, then Walmart Humana makes sense.
Best Wishes, SpringMan

kaneohe
Posts: 4957
Joined: Mon Sep 22, 2008 12:38 pm

Re: Medicare Part D Question

Post by kaneohe » Fri Sep 07, 2012 11:04 am

SpringMan wrote:By deductibles I am referring to an annual amount of out of pocket expense before the insurance kicks in anything. With Walmart Humana it does pay anything until you pay $320. http://www.humana-medicare.com/humana-m ... x-plan.asp The First Health Value Plan by Covington cost $24.20 per months vs $15.10 forWalmart Humana. First Health Value pays from the get go, no waiting until you hit a $320 deductible. 320 divided by 12 is $26.67 per month, add back the $15.10 per month premium and it is easy to see if you plan on using the insurance, the First Health Value is a better deal. If your goal is just to sign up for the cheapest Part D as a place holder to avoid the penalties later, then Walmart Humana makes sense.
It might depend too on how your plan prices/covers your particular drug. I do use the insurance and this calculator told me that Humana Walmart is the cheapest even w/ the $320 deductible. https://www.medicare.gov/find-a-plan/qu ... /home.aspx

You didn't specifically say that you only use free generics....but if you did, would the Humana be cheaper?

Yam the Bomb
Posts: 97
Joined: Mon Aug 20, 2012 8:20 am

Re: Medicare Part D Question

Post by Yam the Bomb » Sat Sep 08, 2012 7:36 am

Most people will come out better with plans that have a deductible but there are exceptions.

First dollar coverage from insurance companies generally has to cost the insured MORE than what the deductible costs the insurance company.

A good example is comparing the Medicare supplement plan F and Plan G. They are the same plan with the exception of plan G leaves the Part B deductible ($140 per year) for you to pay. The premium difference between plan F and Plan G will always be $200 to $300 more per year for F. So you are paying $300 to cover $140.

Comparing the deductible to no deductible drug plans is more complicated because not everyone takes the same meds. There are cases where the no deductible plan WILL be better. But more people choose the no deductible plans for psychological reasons (they just feel better having no deductible) than actual math and value per dollar spent reasons.

Dandy
Posts: 5300
Joined: Sun Apr 25, 2010 7:42 pm

Re: Medicare Part D Question

Post by Dandy » Sat Sep 08, 2012 3:11 pm

I favor being insured. Some RX's are amazingly high. My wife monthly medicine costs about $45 a month with insurance coverage but the retail is something like $450 and I'm sure that isn't even close to what people are paying for many RX's. So, if you can afford it why not take that risk off the table?

User avatar
Kevin M
Posts: 10008
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: Medicare Part D Question

Post by Kevin M » Sat Sep 08, 2012 3:24 pm

Some Medicare Advantage plans (Part C, which includes drug coverage) have $0 monthly premiums, so depending on your other health coverage needs, one of these plans might be worth considering? I assume you've used the tool to help select plans provided at medicare.gov.

Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

User avatar
nisiprius
Advisory Board
Posts: 36501
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Medicare Part D Question

Post by nisiprius » Sat Sep 08, 2012 3:55 pm

Medicare part D is insanely complicated, but the Medicare.gov website was just about as good as it can possibly be in giving me the answers I needed. I highly recommend it. The big gotcha is that you need to go in with the list of prescriptions, and of course there's no way of knowing what prescriptions you might need later, but that's just intrinsic to Medicare Part D.

They even show you a month-by-month bar graph of how your out-of-expense jink crazily up and down as you meet the deductible, then enter the doughnut hole, etc. etc.

(One bit of crazy unfairness, although it doesn't seem to bite enough people to have made headlines: YOU are locked into the plan for a year, but THEY are only locked into the formulary for sixty days. You have to choose a plan literally not knowing for sure what drugs it is going to cover beyond March! From the absence of headlines I suspect that in real life they customarily do something acceptable when this happens. But the unfairness of it gripes me).

I used the Humana/Walmart plan for a year. Worked fine, even though I didn't use a Walmart. I only take a couple of cheap generics so any plan would have been fine. Switched to a different plan this year because the medicare.gov website showed it was slightly cheaper.

One weird aspect. During the deductible period you are paying the "full price" of the drug. However, that is the "full price" of the drug under that plan, which varies by plan, and is much lower than the retail price.

One thing to watch out for. My wife used the website, and on the screen where they ask you to select a pharmacy, she checked off all the ones nearby. Of course, the out-of-pocket cost of the same plan can be different at different pharmacies, and the plan that was "cheapest," was cheapest at a Walgreen's a mile away, instead of the CVS half a mile away she'd been going to. So she shrugged and switched to Walgreen's.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

kaneohe
Posts: 4957
Joined: Mon Sep 22, 2008 12:38 pm

Re: Medicare Part D Question

Post by kaneohe » Sat Sep 08, 2012 4:16 pm

......and if it works for you,sometimes mail order is the cheapest and the easiest too.

User avatar
Phineas J. Whoopee
Posts: 7422
Joined: Sun Dec 18, 2011 6:18 pm

Re: Medicare Part D Question

Post by Phineas J. Whoopee » Sun Sep 09, 2012 11:15 am

LifeIsGood wrote:I only take one prescription drug that I am currently purchasing from Canada. My annual outlay is about $130. I was advised to avoid part D coverage at this time. My concern is that if I should develop a medical condition that requires expensive medication, I'm likely to incur a substantial expense.
I'm interested in your thoughts.
Thanks.
Hi LifeIsGood,

I agree with the positive comments on buying the insurance. Let me share an anecdote.

I have a pair of medicare-age relatives, married to each other, who initially declined part D on the advice of their physician. He reasoned that they'd both been pretty healthy, so on balance they probably didn't need to pay the premiums.

Less than a year later the man suffered a severe heart attack. He survived (it's more than five years now), after two medical procedures, one of which was open-heart. He's on expensive medication for life.

Not so long after that situation settled down, the woman required hip replacement surgery. So far so good on part D for her, but she had to start using a cane, which led to problems in her wrists, for which she now needs medication.

Then they signed up for part D and continue to pay the penalty.

That was one very expensive visit they had with with their doctor.

Or to put it another way,
"Past performance does not guarantee future results."

I say sign up at the earliest opportunity.

PJW

Post Reply