Tom Schrette and Alan Cash

Tom Schrette and Alan Cash

J.L. Sousa

Dear Tom and Alan:

I have a prescription drug plan I’m not crazy about.

They tell me it’s Medicare Part D. There’s a deductible, a payment for each medication and it seems I just pay for everything. I haven’t ever reached the “donut hole” but this plan feels very expensive for what I get.

Maybe there’s nothing better for less, but is there anything better?

No Druggie

Tom:

As the attorneys say, it depends.

Without being able to run your list of medications, I can’t determine if you would get more of a break in costs with another plan.

When the Annual Enrollment Period (AEP) begins each year from Oct. 15 to Dec. 7, people are able to switch to any drug plan that makes financial sense. Each insurance company that offers prescription drug plans has its own formulary or list of drugs.

The Center for Medicare and Medicaid Services (CMS) is the entity that is looking over the specifics of each company’s plans, but the formulary can definitely change from year to year.

Al: What CMS does is to set the minimum standard for a drug plan.

Whatever plan the company comes up with has to least meet this standard, but of course they can offer more (and charge more for it). For 2016, here are the Standard Benefit Parameters: 1. Deductible—$360; Initial Coverage Limit (AKA, the beginning of the donut hole)—$3,310; Out of Pocket Threshold (AKA, the end of the donut hole)—$4,850; Catastrophic Coverage Benefit, i.e., totally beyond the donut hole—5 percent.

Tom: OK, now that last part about 5 percent isn’t quite that simple.

If you reach the far side of the donut hole (we’re supposed to call it the Coverage Gap), you pay $2.95 for generics, $7.40 for brand, or, 5 percent…whichever is greater. So, if a particular brand name medication is $200, you don’t pay $7.40. You pay $10 (5 percent of $200).

Al: You’re a fun guy, Tom. For 2017, the breakdown will be: $400 deductible, Coverage Gap from $3,700 to $4,950, then that 5 percent thing.

Occasionally, we meet with people who did not sign up for a Part D plan because they took no prescriptions and didn’t feel they needed to enroll. Since the open enrollment comes once a year, they thought they could sign up when they needed to.

Tom: The problem is that the government will penalize them for each month they were eligible for Part D and did not take it.

The penalty for not enrolling in a timely fashion is about $.34 per month for every month not enrolled. The extreme example would be someone who was 65 prior to 2006 (the first year of Part D) and never enrolled.

The penalty could be 120 months multiplied by $.34, or, over $40 penalty added on to current plan…for life.

Submit questions or reach the Health Insurance Guys at Schrette Insurance, 1556 First St., Suite 105, Napa, 94559; 255-9511; schrette@gmail.com; or alancash@gmail.com

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