Yesterday I wrote about Jerry, who moved to Tucson and was able to drop his Colorado Medicare Advantage plan and enroll in a Medicare supplement without answering any medical questions.  Because the move from Colorado to Arizona required Jerry to drop his Colorado Medicare Advantage plan, Jerry had “guaranteed issue” for  a Medicare supplement.

The Medicare supplement choice was simple, but then Jerry had to sign up for a stand-alone Part D prescription drug plan.  Jerry takes several prescriptions, so selecting a Part D plan requires doing some research to make sure all of his prescriptions are covered by the plan he chooses. So I went to Medicare.gov and clicked on “Health and Drug Plans”. Then I clicked on “Compare Health and Drug Plans”.  I put in each of Jerry’s prescriptions, and the Medicare “Plan Finder” gave me a list of Part D plans that covered his drugs, starting with the plan that would cost him the least amount of money for monthly premiums and co-pays.  The first plan on the list was the Humana-Walmart Part D plan for $14.80 per month.

I was going to have Jerry call up Humana to enroll over the phone, so I called him up and began to explain what he needed to do. Well….. this is where I remembered that Part D is rather confusing. You see, the plan that the Medicare Plan Finder gave as #1 for Jerry has a $310 deductible, so I began to explain this. Then I went on to explain co-pays for drugs on the Humana-Walmart plan, which can vary based on where he buys his drugs: at a Walmart store, by mail, or at a non-preferred pharmacy like Walgreens.   Things got complicated and confusing pretty quickly, so I told Jerry I’d drop by his house and explain everything in person. (Note to Medicare insiders: I had gotten a scope of appointment form signed by Jerry before we met to talk about the Medicare supplement.)

To prepare for my meeting with Jerry, I went to the Humana website and put in his list of prescriptions. The Humana website, if you can figure out how to use it, provides a monthly breakdown of what a person will pay for their prescriptions and how much Humana will pay.  The Humana Rx calculator provides lots of details, and I printed them out to help me explain the plan to Jerry.

So I went to Jerry’s house and showed Jerry the printouts, drew him diagrams, and explained the difference between the monthly premium and the co-pays for his drugs. And then there was the $310 deductible….. and we spent nearly an hour talking about this Part D plan.  After going over the details several times, Jerry got the full picture, but he still asked me to write up a summary of everything he had signed up for and what his monthly costs would be.

Jerry wants to use use the Humana mail order service for his prescriptions, and this will save him a lot of money.  I told Jerry to call me when he gets his package of information from Humana so I can help him set up the mail order.  This is another confusing process, but once it’s set up it should be simple to use – I think.

Why is Part D so complicated?

During our meeting, I apologized several times to Jerry for how complicated Part D is,  and I reassured him that it was not his fault that he was confused by it.  In 2011 there are over 1,000 Part D plans offered throughout the country. Why?   What value is provided by hundreds of insurance companies each offering several Part D plans?  Has this saved Medicare money?  Has this made drug coverage selection easy for seniors? Why not have one or two plans administered by Medicare (which could contract out the plans’ management to the private sector)?

I just can’t  understand why Part D is so complicated.

In Arizona there are 25 stand-alone Part D drug plans available to people on Medicare. I usually deal with the best-known plans, Humana and AARP MedicareRx, because they seemed to cover almost all prescription drugs in past years.  This seems to be changing for 2011, and this makes selecting a Part D plan more confusing than ever.

Last weekend I met with a couple who have both chosen to stay with Medicare and get a Medicare supplement.  They need to pick a stand-alone Part D drug plan, which is a bit complicated because the husband uses several inhalers which are very expensive.  He also takes Micardis for his blood pressure along with two other drugs. The wife doesn’t take any prescriptions, so I thought the Humana Walmart plan, with a low premium, would get her into the Part D system for a small cost.

For the husband, I first checked my old standards, Humana and AARP MedicareRx (which is actually UnitedHealthcare).  As it turned out, the Humana Walmart plan, which has been widely advertised, does not cover Micardis.  More surprisingly, the AARP MedicareRx plan does not cover the Proventil inhaler the husband needs.

My next step was to go to Medicare.gov where I put my client’s prescriptions into the Plan Finder which generated a list of Part D plans he could consider.  The plans were listed in order from the lowest premium to the highest, and they ranged from $28 to $80 per month.  I noticed that most of the plans had a notation that said they did not cover all of his prescriptions.  Some plans had a $310 deductible, one had a $150 deductible, and some had no deductible.  Co-pays from plan to plan were varied, from 25% for all drugs to $85 for tier 2 drugs and then 33% for tier 3.  An $85 co-pay for a tier 2 drug? That company must tier their drugs differently than the plans I know.

I was totally confused by the choices and information provided by the Medicare.gov Plan Finder.  My clients asked for my advice on which plan they should choose, but  I had no clue what to tell them.  All I could say was that I don’t understand why there are so many plans, each with a different formulary (list of drugs covered), different deductible, and different co-pays for each drug level.

Why is Part D so complicated?

In 2010 there are over 1,500 Part D plans offered throughout the country. Why?   What value is provided by hundreds of insurance companies each offering several Part D plans?  Has this saved Medicare money?  Has this made drug coverage selection easy for seniors? Who came up with this concept – and why?  Why not have one or two plans administered by Medicare (which contracts out the work to the private sector)?  Are insurance companies making a profit from Part D drug plans?

I gave my clients a list of Part D plans from the Medicare.gov Plan Finder and pointed out two plans I thought they should look into.  I don’t represent those plans, so I suggested they call the plans directly, or they could call Medicare to ask for help in picking plans that would work for each of them.

My clients were shaking their heads in dismay and confusion.  We had determined that the husband’s prescription costs might add up to three hundred dollars or more per month, so finding a plan that could save them some money is very important. I apologized for not being able to help them further with their drug plan selection.  And I repeated my question, “Why is Part D so complicated and confusing?”