Kevin Knauss: Health, History, Travel, Insurance
Medicare allows alternate cost structure designs. These designs must be as good as the standard cost structure. One alternate structure only has drugs in tiers 3, 4, 5 subject to the pharmacy deductible. Generic drugs, tiers 1 and 2, are not subject to any deductible. The plan member goes straight into a set copayment or coinsurance for the prescriptions.
Social Security recipients who have a Part D drug plan need to review their 2025 monthly premium rate. The changes to the Part D drug plans with a lower maximum out-of-pocket amount has forced many Part D plan sponsors to raise their monthly premiums. Rate increases of $30 to $50 per month is not uncommon.
Of all the Medicare plans, the Part D Prescription (PDP) plans are the most confusing. The confusion arises because Medicare allows the Part D plans to offer alternate plans that differ from the standard plan. The alternate plans must be as good as the standard plan for the average Medicare beneficiary. Cost Sharing of the […]
The team at FairStreet had to overcome my built-in skepticism. One aspect of their company that they inadvertently revealed to me was that they were not a sales company. They had a different approach and perspective. The emphasis was on providing clear information for appropriate analysis of Medicare options. This is what we need in the senior Medicare market. We need less emphasis on sales and more focus on education, information, and beneficiary compatibility with the Medicare plans.
In California there are 32 different Part D plans offered by 11 different insurance companies. One plan sponsor offers six different plans. The only thing that differentiates these plans at first glance are the marketing names like Basic, Choice, Classic, Enhanced, Plus, Saver, Secure, and Value. These monikers are marketing gimmicks and tell the Medicare beneficiary nothing about the benefits of the plan.
All of the out-of-pocket drug cost the consumer pays goes toward pushing them through the coverage gap and potentially into the catastrophic phase. These costs would include any deductible, copayments and coinsurance of the initial coverage phase, and the 25 percent coinsurance in the coverage gap. However, in the coverage gap, the consumer’s accumulated dollar amount is credited with the drug manufacturers 70 percent discount on brand name drugs.
The great thing about Medicare is that you can build your train the way you want. You can change the train cars every year. But the important aspect is that you own the Medicare engine. You are the engineer and you can build your train the way you want it.
I have created a spreadsheet that is fairly simple to pop in premiums, monthly drug copay and any deductible to determine a yearly estimated cost of the plan. Perhaps the most daunting aspect is collecting the data. Each plan publishes a drug formulary that will list if the drug is covered, the tier, copay for each tier and any deductible.
