You need to sign up for a new Medicare Part D plan by Dec. 7, so now is the time to make sure you're getting the best plan for your needs.

The reason: You could end up paying hundreds, or possibly even thousands, of dollars more than necessary for your premium and medications.

The experts at Consumer Reports Best Buy Drugs conducted a small spot check on the prices you could pay for generic medications using the Medicare Plan Finder. They found significant price differences among 19 plans: You could spend less than $400 annually on some plans—while others charged more than $1,700.  
“Which Medicare drug plan to use can be one of the most important healthcare choices you make,” says Juliette Cubanski, the associate director for the Program on Medicare Policy at the Kaiser Family Foundation. “It can mean the difference between being able to afford your medications—or not.”    

Consumer Reports Best Buy Drugs looked at what a person living in Yonkers, N.Y., with the ZIP code 10703 might be charged among Medicare Part D plans.

Keep in mind that these plans are intended to be used with basic Medicare and only cover prescription drugs. The search excluded Medicare Advantage plans, which combine medical and drug coverage, because those plans are typically not national and are offered only in specific regions.

The results showed big price variations among 19 prescription drug plans. For the market basket of generic drugs input into the system—atorvastatin (Lipitor), clopidogrel (Plavix), duloxetine (Cymbalta), montelukast sodium (Singulair), and pioglitazone (Actos)—for two large chain pharmacies in our area, the lowest out-of-pocket cost came to $378 for the year for insurance premiums plus medication co-payments. The most expensive option came to $1,733 for the year—more than four times as much.

For very expensive drugs, the variation in prices was even more significant. Annual out-of-pocket costs for etanercept (Enbrel), a drug used to treat rheumatoid arthritis and other autoimmune diseases, ranged from $5,373 to a staggering $57,372, depending on the plan.

The findings were similar when it came to brand-name drugs. For example, monthly costs for Lantus insulin ranged from $25.35 (after meeting a deductible) to $286.79, depending on the plan.

The most striking differences were when some Medicare drug plans included a drug on their formulary (list of covered drugs) and others did not. If you use Spiriva asthma inhalers, for example, and your plan does not cover them, you’ll have to shoulder the full cost of the drug—about $346 monthly. That's ten times more than the co-pay for the drug on some plans.

In addition, when a drug is not included on a plan’s formulary, the amount you pay does not count toward your deductible and is not applied to the total spending level you need to reach for catastrophic coverage to kick in and bring down your out-of-pocket costs.

“Even if you are happy with your current coverage, changes for the coming year mean you could wind up paying more for your medications,” says Cubanski. “It’s so important to compare plans now, while you have the chance.”    

You have until Wednesday, Dec. 7, to enroll in a Medicare drug plan for coverage beginning Jan. 1.

Finding the Best Plan

When using the Medicare Drug Finder tool, keep these tips in mind:

Don’t consider premiums alone. “There’s a common misconception that higher premiums buy you better coverage and lower co-pays, but that’s not always the case,” Cubanski says. In fact, for the market basket of generic drugs used in the spot check, the plan with the most expensive premium also had the highest total out-of-pocket costs.

Don’t be put off by deductibles. A zero-deductible Medicare drug plan could still have higher total costs due to expensive premiums and co-pays. One helpful feature of the Medicare Plan Finder tool is that it tells you your projected total out-of-pocket costs for the year, taking into account premiums, deductibles, and co-pays.

Check different pharmacies. Some plans negotiate lower rates with a “preferred” pharmacy chain. In our search, the AARP MedicareRx plan was the lowest cost option only if you fill your prescription at Walgreens or through mail order; costs would be much higher at any other pharmacy.

Enter all of your medications. You can’t assume that just because a plan offers low co-pays for one or two medications, that it will provide good coverage for all of your drugs, Cubanski says. You also can’t assume that a plan that works well for a friend will also work well for you.

If you have trouble navigating the Medicare Drug Finder tool, you can contact your state health insurance assistance program (SHIP) through the SHIP National Technical Assistance Center, at www.shiptacenter.org. Those programs can also direct you to resources that can help if you are having trouble affording your medications.

Another option is to turn to the nonprofit organization Medicare Rights, which helps seniors and people with disabilities understand their benefits and find the best coverage. You’ll find an easy-to-use interactive tool on the Medicare Rights’ website. You can also call their helpline, at 800-333-4114.

Last, you can talk to your pharmacist. Some drugstores will set up an appointment to walk you through the process of comparing plans based on the medications you take.