Medicare plans providing prescription drug coverage can change each calendar year. The list of covered prescription drugs (i.e., formulary), prescription drug out-of-pocket expenses such as deductibles, copayments and coinsurance as well as premiums are all subject to annual revision. Additionally, new plans may be introduced annually and some existing plans may no longer be available. It’s important to review your Medicare prescription drug coverage options every year to ensure you are enrolled in the best plan for your circumstances. Switching plans is not difficult at all if you do decide to make a change.
When can I switch Medicare plans offering prescription drug coverage?
You might have two or more opportunities to change plans.
- The Annual Enrollment Period lasts from October 15 through December 7 each year. During this time you can enroll in, drop, or switch your Medicare plan.
- The Medicare Advantage Open Enrollment Period lasts from January 1 to March 31 each year. You might be able to make a one-time change from one Medicare Advantage plan to another during this time.
- You can also switch Medicare plans providing prescription drug coverage outside the Annual Enrollment Period under certain special circumstances (e.g. you move out of your plan’s coverage area) in which you are eligible for a Special Enrollment Period.
How Do I Switch to a Medicare plan providing prescription drug coverages?
It is simple to switch to a Medicare plan providing prescription drug coverage. When you enroll in a different plan, you will be automatically disenrolled from your current plan.
If you decide to enroll in a new plan in conjunction with the Annual Enrollment Period, your new coverage will begin on January 1 of the following year, as long as you are enrolled in your new plan by December 7. Likewise, your previous plan coverage will expire at the close of December 31.
Choosing a new plan
When deciding on Medicare prescription drug coverage, you may want to consider the following:
- Which type of Medicare Prescription Drug Plan to enroll in: You may be able receive your prescription drug coverage from a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan. A Medicare Advantage Prescription Drug plan combines the health benefits of Medicare Part A and Part B with prescription drug coverage (Part D coverage).
- Monthly premium: This is the monthly fee you pay for your plan providing prescription drug coverage. Premiums will vary between plans, and some Medicare Advantage Prescription Drug plans may offer a premium as low as $0. While $0 a month may sound attractive, remember to look at the other aspects of the plan such as the formulary, or list of covered prescription drugs, and the directory of participating providers in the plan before you make a decision to enroll in the plan.
- Annual deductible: This is amount you will have to pay out-of-pocket before the plan begins to pay its share towards prescription drug coverage. The highest plan deductible allowed in 2019 is $415, but some insurance companies offer $0 deductible plans. Before you switch to a Medicare plan providing prescription drug coverage based on a $0 deductible, remember to look at the other plan costs and features to be sure that it’s what you need.
- Copayments and tiers: After any applicable deductible is satisfied, you will normally pay a copayment or coinsurance amount each time your drug prescriptions are filled. Medicare plans offering prescription drug coverage separate covered prescription drugs into categories known as tiers. The tier assignment of a medication determines how much your out-of-pocket costs cost. Tiers are usually referred to by numbers (e.g. Tier 1, Tier 2, etc.). Drugs in higher tiers will have higher out-of-pocket costs than drugs in lower tiers and, thus, it is important to note what tiers your prescription drugs appear in.
- Formulary: Each stand-alone Medicare Part D Prescription Drug Plan and Medicare Advantage Prescription Drug plan will have its own list of prescription drugs that it covers. This list is known as a formulary. Before you switch plans make a list of your prescription drugs, and be sure that the plan you are interested in covers most, if not all, of your medications. You can enter your zip code and prescription drugs on the plan finder tool on this page to help you compare plans based on the sum of the estimated out-of-pocket costs plus the plan’s monthly premiums. Please note that a plan’s formulary may change at any time. You will receive notice from your plan when necessary.
- Coverage limitations: Consider other features of the plans available where you live. Many plans have cost utilization measures, such as quantity limits, prior authorization and step therapy that can help you and the plan contain prescription drug costs and monitor the effectiveness and safety of the prescription drugs you take.