Should you choose a Part D plan with a deductible? Most clients’ eyes glaze over as I explain how the deductible works. And I’ve gotten calls from clients who forgot about the deductible in their Part D plan and wondered why they paid such a high price for a drug.
I have quite a few clients who signed up for a Medicare supplement and needed a stand-alone Part D plan – even though they take no drugs, or just a couple of generics. They could pay $30 or more for a Part D plan that has no deductible, and they would pay $4 to $15 for their generics. The crazy thing is that they could buy those generics for $4 to $8 without Part D.
But these folks know that, while Part D is “voluntary“, there is a penalty for people who don’t enroll in a plan and then later find out they need the coverage. So I tell them they should pay the lowest premium just to be in the Part D system. And the lowest-cost Part D plans have a deductible.
In 2013, the standard deductible is $325 for Part D plans that have a deductible. These plans have monthly premiums that range from $15 (sorry, not in Arizona), or $18 to $26. I don’t know why a person would pay a higher price for a plan with a deductible when you can pay $32 for a plan without one.
An example of Part D confusion
I had a client call me about what she and her husband paid for the Shingles vaccine. They have different Part D plans. Her plan has a deductible, and his plan does not. Her plan costs $15.10 per month, and his costs $28.60 (in 2012). She paid $166 for the Shingles vaccine and he paid $95.
The husband’s plan has a $45 co-pay for “preferred brand” drugs. It has a $95 co-pay for “non-preferred brand” drugs. I looked up Zostavax in his Part D plan formulary. Sure enough, Zostavax is a “non-preferred” brand drug on his plan.
The wife’s plan as a $320 deductible (in 2012). I checked her plan formulary and the retail price for Zostavax is $166. Because she paid the full retail price, this means she has not yet met her plan deductible. She takes two generics that probably cost $4 per month, so that will not add up to $320 throughout the year – so she will never meet her deductible. Although, now she has paid $166 toward that deductible because of the Zostavax.
The wife asked me, “Why am I not in the same plan as my husband?”. I had to remind her that we had discussed her drug costs and options when she first enrolled in her plan. I reminded her that she got her Part D plan pretty much to be in the Part D system. I also explained to her that, if she had already met her deductible, her co-insurance for the Zostavax would have been just 20% of $166, or $33.
So, I tell people who don’t really need a Part D plan that they have some choices: 1) Don’t enroll in Part D. 2) Pay a higher monthly premium for a plan with no deductible – which is paying a high price for something they don’t even need. 3) Pick the plan with the lowest premium – but that plan will have a deductible.
This deductible question is just one of the many things that make Medicare Part D confusing. I always end my post on Part D with the question: Why did the Powers-That-Be make Part D so complicated?