Changing Medicare Prescription Drug Plans
Changing Part D plans during IEP, AEP, or SEP
Changing Medicare Drug Plans-- When?
I’m often asked, “when can you change Medicare plans”, and more specifically, Medicare Prescription Drug Plans. Well, first things first. Medicare Prescription Drug Plans or Part D Plans are not standardized like Medicare Supplement Plans. This means each plan is different in some shape or form. There are 22 different Part D Plans in 2024 that clients are able to add to Original Medicare. These are mostly commonly combined with a Medicare Supplement Plan for coverage. These Medicare Prescription Drug Plans (Part D) should be reviewed each fall during the Annual Enrollment Period (AEP) regardless of the premium or coverage the Part D Plan provided you in the current calendar year.
Why? Well, every plan is subject to change during the Fall AEP each calendar year. These changes are applied January 1st of the new year. This means the premiums, copays, drug formulary, drug restrictions, preferred pharmacies can all change annually. Fortunately, changing drug plans is easy as there is no medical underwriting required. An application and open window is all you need to successfully change plans.
Review Part D Plans each Fall during AEP.
This is not to say you must change your Part D Plan each year as we have many clients that stick with the same plan for multiple years if their drug list doesn’t change much and/or the drug plan they’re enrolled in doesn’t have any drastic changes for the upcoming year. Slight premium changes is usually not the main concern most of my clients have when it comes to why they change prescription drug plans. Most commonly, clients move plans once they find their current plan is changing the list of medications it covers as well the copays for the newly tiered drugs. These annual changes are usually discovered while doing a review during the Fall AEP.
With that said, I recommend reviewing your Medicare Prescription Drug Plan each fall during the Annual Enrollment Period, or AEP that runs from October 15th to December 7th each year to be sure you’re fully covered going into the next year. During this window of time, the following year’s plans are released. This gives us the opportunity to see if/how much the plans have changed from the year prior, and whether or not the changes require you to move plans.
How are we compensated for helping you change plans?
We are compensated the same for a $10 Part D Drug Plan as we are for a $100+ Part D Drug Plan. We have no incentive to enroll you in anything other than the Part D Plan that suits your needs.
Confirm all your medications are covered.
The best way of knowing if your Medicare Prescription Drug Plan has changed, is to review it with a drug plan finder that shops all available plans at the same time. You simply put in your prescription lists, quantity, and dosage and it ranks the plans 1-22 (2024) based on out-of-pocket costs for the year. We run projections for our clients during AEP for those that wish to review their plan. The key features of a Medicare Prescription Drug Plan that we typically focus on during IEP, AEP, and/or SEP are the following:
Premium.
Did your monthly premium increase? Typically, the rates go up, but it’s common to see new plans released that undercut all the prior years rates, thus, attracting new Part D enrollees. I’ve even seen premiums more than double at times. It’s best to check rates during the Fall AEP so you have an idea of what the drug plan will cost you the following year. Also check, Did your current Part D plan insurance company add or increase the deductible to your drug plan? Slight increases can be expected as costs rise, however, making sure the plan covers your prescriptions well is the best way of maximizing the value of your Part D Plan each month.
Deductibles aren’t necessarily a negative thing if the premium and copays justify the upfront deductible cost. The annual estimated costs for the following year may still be less with a deductible. It may not feel like it the first month as you’ll pay more upfront, but this may mean you pay much less for your medications the remainder of the year. Be aware, i’ve seen Part D plans that are more expensive, charge a deductible, and also charge more for each prescriptions than competing Part D plans. Do not try to analyze why the plans charge what they charge. It will drive you crazy! Let the plan finder rank the plans and choose according to the plan that provides you with the best coverage at the lowest price.
Tiers and Co-pays.
Copays & Tiers– All copay structures and tiers can change year to year. If you are taking “brand name” prescriptions, it is important to review the tiering and applicable copays for the drugs. They can increase drastically at times and it’s best to be sure the “brand name” drugs are going to be covered the following year with competitive copays for each prescription. It’s possible for medications to move to higher or lower tiers as well (ie. cost more or less monthly). Don’t get caught up in the tiering of the drug as much as what is the specific copay for that tier. As tiers are not standardized, there is no set cost for each tier. This is different with every insurance company. With that said, it really just matters what you’re paying for the drug, not what classification it’s in.
As for generic drugs, these may change tiers at times, but the copays for these prescriptions are typically inexpensive. Therefore, small changes such as copays going from $5-$7 will not likely cause a large increase in your out-of-pocket expenses year to year, but it’s good to always check. We can check all of your prescriptions at the same time, so it’s easy to review your entire medication list and rank all possible plan’s estimated costs for the new year.
Formulary Changes.
Review your formulary list of medications – each Part D Plans formulary or list of covered drugs is subject to change each year. This is not to say it will. However, if you have “brand name” drugs, or a long list of medications, it’s best to review the entire list, so you know you’re positioned well for the following year. When we shop your entire drug list we will be able to determine what drugs are covered, at which tiers, and what the copays for each drug will be at your selected pharmacy or list of preferred/standard pharmacies on the plan finder.
Drug Restrictions.
Drug Restrictions – some common restrictions are step therapy and prior authorization. These are additional steps or procedures you and/or your physician will need to navigate through to get particular drugs prescribed and/or dispensed and/or covered by the plan. The least amount of these restrictions on a drug list, the better. Some drugs will have restrictions regardless of the plan, but there can be a huge difference in how certain plans tier the drug and require step therapy restrictions on drugs, while others do not. The plans all have a baseline of coverage they must provide to qualify as a Medicare Prescription Drug Plan, however, that doesn’t mean it specifically covers all of your medications.
There really isn’t a logical way to interpret the results of the drug plan finder. It gives us the results for your list the following year and ranks them lowest to highest cost. The drug companies all structure plans according to their preferences once they fulfill the baseline requirements set my Medicare each year.
When we review your medications, we can then dig a little deeper to find the best priced plan with the least amount of restrictions. Less restrictions means less of headache for you, the physician, and/or the pharmacist. Always go with the best combination of cost and coverage to maximize the value of your Part D Drug Plan. It may be best to go with a plan with many restrictions because it’s the only plan that covers your medications at the lowest cost. Knowing this ahead of time will allow you to have a discussion with your physician and pharmacist to plan out dispensing the drugs you need come January.
Now that we’ve reviewed some of the more important parts of Medicare Prescription drug Plans that can potentially change annually, let’s take a look at when drug plans can be changed and the process of changing drug plans.
Changing Medicare Drug Plans
Get organized and review your Medicare Prescription Drug Plan each Fall during the Medicare Annual Enrollment Period. Open from October 15th- December 7th. List your medications in the Medicare Drug Plan Finder to shop Part D Plans for the new year.
Changing Medicare Drug Plans-- Enrollment windows
IEP – when first turning 65. You aren’t changing plans, per se, however, it’s good to be familiar with the process when you first enroll during IEP. This way, you can approach the Part D reviewing process each Fall AEP thereafter. No health questions are asked when you enroll in a Medicare Prescription Drug Plan, so you do not need to be concerned with if you can enroll in the 22 available plans (2024). Rather, find the plan that’s is best for you and enroll. The timing of your enrollment is dependent on when your Medicare first begins (ie. what date you’re turning 65 and/or Medicare effective dates if starting Medicare after 65 through an SEP after leaving a creditable coverage employer sponsored health plan).
Shop all plans available when reviewing stand-alone Medicare Prescription Drug Plans in California and enroll in the plan of your choice to work alongside your Medicare Supplement Plan. In this IEP window, you’re not changing your plan, but it’s good know the enrollment window, as not confuse it with another enrollment window. This window last 3 months before, the month of, and 3 months after Medicare is first active surrounding your 65th birthday. If your Part A is already active (Part A Only), but you’ve been covered under a group employer plan past 65, you’ll be using an SEP, not the IEP enrollment window. You can enroll in the SEP window the month you’re losing coverage and/or up to 63 days after the last day of creditable drug coverage. The plan will begin on the 1st of the month after your application is submitted (dated and signed).
Enroll in Part D 1-3 months before your effective date for coverage to start on day 1.
These different enrollment periods or “windows” do not affect your ability to qualify and enroll in certain plans. If you have an open window, you’re able to enroll in any Part D Plan, and each specific Part D Plan will charge exactly the same price regardless of age, ZIP code, or drug list. Remember, I’m referring to one specific plan among all 22 plans. All 22 Part D Drugs Plans in 2024 will be different, but each specific plan in the group of 22 will be same for everyone in California that enrolls in that specific plan. Costs are all the same unless you happen to have a lifetime Part D penalty for not having coverage when you were eligible for a Part D Plan. You may have a lower premium and copays if you qualify for Extra Help/Medi-Cal subsidies as well.
For example, plan “abc” is $20 a month for everyone with applicable copays, and Plan “xyz” is $37 a month with applicable copays regardless of age, ZIP code, or how often you use the plan to cover your prescriptions. These “rules of thumb” apply to all drug plans each year. To be clear, the same plan costs a member who is 65 the exact same monthly premium as it costs someone who is 85 years old.
Annual Enrollment Period (AEP)
AEP – October 15th- December 7th. The Annual Enrollment Period is the main Medicare Prescription Drug Plan enrollment window that is open to everyone each fall. You are able to keep your plan, upgrade your plan with the same carrier, or shop other Medicare Part D Plans being offered the following calendar year. Typically, you’ll have the opportunity to shop 20+ plans in California to find the best plan for your list of prescriptions (premium + copays). There is no underwriting or health questions asked to enroll in any of the available plans. When we shop the plans during the Fall AEP, the drug plans do not know which prescriptions you are taking when you enroll. This drug plan finder tool is intended to provide you with the estimated annual out-of-pocket expenses for the next calendar year. Feel free to input any drugs you take, may take, or drugs you are curious about if you want to view potential costs. Shopping various prescriptions will not have an effect on your enrollment into the drug plan.
Enroll Oct. 15 - Dec. 7th for a new Part D January 1st effective date.
Drug plan premiums are not subject to age, ZIP code, or prescription need as I mentioned before. The monthly premiums will be the same for someone 65 or 85 for any specific Part D Plan. The only difference for those in the same drug plan, who are paying the same monthly premium, will be which drugs are dispensed and paid for in the pharmacy (ie. out of pocket cost – for each specific medication). When you enroll in a drug plan during the Fall AEP, the current plan will continue until December 31st of the calendar year. The new plan will begin on January 1st and the old plan will be automatically cancelled for you by Medicare.
SEP– no set enrollment window. However, the time in which you enroll in a Medicare Prescription Drug Plan with a SEP is typically the month prior to losing coverage and 63 days from the date you were last insured with creditable coverage and/or specified for the exact SEP window pertaining to that specific SEP (timelines can vary). I recommend enrolling in the new Part D plan prior to losing coverage so you don’t have a lapse in coverage. These SEP enrollment periods are most often used for Medicare beneficiaries that are enrolling in Medicare after 65 and leaving a group employer plan. The SEP allows a client to enroll without penalty into a Medicare Prescription Drug Plan during a specific time (ie. usually within 63 days of leaving/losing/retiring from an employer group plan). Again, apply before the 63 days if possible to get coverage on day 1 without a lapse.
Other typical SEP windows can be used when plans are discontinued for the following year– giving you extra time to find a new plan beyond the AEP in the fall (yes, a few drug plans are discontinued each year and it’s not you personally being dropped, its the entire plan in California). Another common SEP is used for Medi-Cal eligible dual eligible Medi/Medi Medicare beneficiaries.
This Medi/Medi SEP provides beneficiaries the ability to move Medicare Prescription Drug Plans each month of the year. This is just one example, as there are far too many SEP scenarios to list and review. If you would like to discuss SEP with myself, please contact my office so we can help you plan out your SEP Medicare Prescription Plan enrollment. You may also see the list of SEPs under Medicare 101– Prescription Drug Plans and/or Medicare.gov. Just to be clear, regardless of the window for Part D Drug Plan enrollment, you are able to enroll in any of the Part D plans offered in California — 22 Part D Plans in 2024.
