Medicare: Things to Consider

    Copayment/Coinsurance
    This is the amount you pay for
    your prescriptions after you have paid the deductible. In some plans, you pay
    the same copayment (a set amount) or coinsurance (a percentage of the cost) for
    any prescription. In other plans, there might be different levels or “tiers,”
    with different costs. (For example, you might have to pay less for generic drugs
    than brand names. Or, some brand names might have a lower copayment than other
    brand names.) Also, in some plans your share of the cost can increase when your
    prescription drug costs reach a certain limit.

    Coverage

    Formulary
    A list of drugs that a Medicare drug plan
    covers is called a formulary. Formularies include generic drugs and brand-name
    drugs. Most prescription drugs used by people with Medicare will be on a plan’s
    formulary. The formulary must include at least two drugs in categories and
    classes of most commonly prescribed drugs to people with Medicare. This makes
    sure that people with different medical conditions can get the treatment they
    need.
    Prior Authorization
    Some drugs are more expensive
    than others even though some less expensive drugs work just as well. Other drugs
    may have more side effects, or have restrictions on how long they can be taken.
    To be sure certain drugs are used correctly and only when truly necessary, plans
    may require a “prior authorization.” This means before the plan will cover these
    prescriptions, your doctor must first contact the plan and show there is a
    medically-necessary reason why you must use that particular drug for it to be
    covered. Plans might have other rules like this to ensure that your drug use is
    effective.
    Coverage Gap
    If you have high drug costs, you
    may consider which plans offer additional coverage until you spend $3,600
    out-of-pocket. In some plans, if your costs reach an initial coverage limit,
    then you pay 100% of your prescription costs. This is called the coverage gap.
    This “gap” in coverage is generally above $2,250 in total drug costs until you
    spend $3,600 out-of-pocket. Some plans might offer some coverage during the gap.
    Even in plans where you pay 100% of covered drug costs after a certain limit,
    you would still pay less for your prescriptions than you would without this drug
    coverage.

    Convenience

    Drug plans must contract with pharmacies in your
    area. Check with the plan to make sure your pharmacy or a pharmacy in the plan
    is convenient to you. Also, some plans may offer a mail-order program that will
    allow you to have drugs sent directly to your home. You should consider all of
    your options in determining what is the most cost-effective and convenient way
    to have your prescriptions filled.

    Peace of Mind Now and in the Future

    Even if you don’t take a lot of prescription drugs now, you
    still should consider joining a drug plan in 2006. As we age, most people need
    prescription drugs to stay healthy. For most people, joining now means you will
    pay a lower monthly premium in the future since you may have to pay a penalty if
    you choose to join later. You will have to pay this penalty as long as you have
    a Medicare drug plan. If you reach the point where you have spent $3,600
    out-of-pocket for drug costs during the year, the plan will pay most of your
    remaining drug costs. This protection could start even sooner in some plans.

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