Making smart Medicare Part D choices

Seniors reeling from the financial crisis and looking to pare living expenses should take a fresh look at their prescription medicines and Medicare Part D plan. Significant savings are possible and the timing is right: The 2009 open enrollment season for Medicare Part D (the prescription drug benefit) began Nov. 15 and runs through Dec. 31.   

Our analysis has found that seniors can save from hundreds to thousands of dollars a year–and possibly keep themselves out of the infamous benefit gap known as the doughnut hole–by switching to lower-cost medicines (such as generics) and carefully picking a Part D plan.

The Consumer Reports Best Buy Drugs team looked at more than 250 Part D plans in six cities (by ZIP code) using Medicare's "plan finder" tool. Our study found that enrollees who take medicines in 2009 for diabetes, heart disease, high blood pressure, high cholesterol, and arthritis (a not-all-that-uncommon mix of medical conditions for those over age 65 or so) could save in the neighborhood of $5,000 a year by switching to effective alternative nonbrand drugs. (Actual savings depend on where you live, your Part D plan, and the specific drugs you take, as well as your doctor's judgment that you can, indeed, make the switches.)

Part D enrollees with just one chronic condition can also shave their out-of-pocket costs. Our analysis found, for example, that a senior with type 2 diabetes in Phoenix could save from $497 (lowest-cost plan) to $737 (highest-cost plan) if he or she was taking the brand-name drug Januvia, but switched instead to metformin, a generic drug. Likewise, a senior with arthritis in Atlanta who was taking just one drug–the brand-name drug Celebrex–but switched to ibuprofen, another generic drug, could save from $555 to more than $1,500, depending on his or her choice of plans.

In the past two years, the vast majority of seniors have re-enrolled in the Part D plan they are in. But the government agency that runs Medicare and the drug benefit (the Centers for Medicare and Medicaid Services) is advising people this year to shop around. The main reasons: 

• Premiums are rising across the board in 2009, with some plans charging an estimated 60 percent more than they did in 2008. They'll range from around $10 a month for some minimalist plans to more than $100 a month for comprehensive plans.
• Over the years, plans have been changing their formularies, co-payments, and cost-sharing (the amount you pay out of your own pocket). This is critical, because the main expense in many Part D plans are the co-payments, not the monthly premium (assuming you need to take any medicines at all). 
• A few plans are dropping coverage of select generic drugs in the Part D doughnut hole. In 2009, the doughnut hole kicks in when your drug expenses (what you and the plan together spend) hit $2,700. The gap continues until you have spent $4,350 out of your own pocket. So, for people who have to take many drugs, and especially expensive brand-name drugs, the doughnut hole can loom very large indeed, and should be the central issue in their choice of a Part D plan.   

The government's Web site for the Part D benefit will lead you to the basics about Medicare Part D plans. You'll find the plan finder there as well.

For more advice, read our full report and see our tips for choosing coverage (PDF download). Another site we like is Medicarerights.org, sponsored by the Medicare Rights Center, a nonprofit, consumer-oriented group. Avoid sites sponsored by individual Part D plans; most aim to sell you their coverage. Be wary also of ads and sales pitches from insurers and insurance brokers. A federal government review recently found that most of the written materials that Part D insurers had prepared last year failed to meet government marketing guidelines for accuracy and clarity. 

—Steve Findlay, managing editor, Best Buy Drugs