Tips for Choosing a Medicare Drug Plan

The consumer Web site www.medicaredrugplans.com offers these tips for people planning to use the Medicare Part D prescription drug plans.

First: Check the basics.

   Does it cover your drugs? Some plans cover all and some cover only about 70 percent. If you can't cover all or most of your drugs, it may not be worthwhile. Use Medicare's online "Formulary Finder" to see if your drugs are covered -- although you'll need to contact the plan directly to get your cost for the drug. Also, make sure convenient pharmacies participate.

   What is the monthly premium? This can range from no fee to more than $100 -- the average is about $37.

   What is the deductible? The standard is $250, but some have no fee. If you only use one drug, a zero deductible could make it a lot more worthwhile.

   Gap coverage? This is coverage during the "doughnut hole," during which you have no coverage in a standard plan. However, some plans will help you with generics and/or discounted pricing on certain drugs during the gap.

Second: Picking a plan depends on how many drugs you use.

   No medication: You won't be able to save money. However, you can look at the plan as insurance. Consider a plan with the lowest premium (some are as low as $5 per month). This way you also avoid a penalty had you not joined by May 15, 2006, but later decided to join a plan. You can switch to a different plan later on if necessary -- at the end of every year.

   1 drug: The plans may not be a great option, since most plans will cost you at least $300 per year just to be a member. But if you want a plan for catastrophic insurance, look for a plan with no deductible and a reasonable monthly premium ($35 or less).

   2 to 3 drugs: You're a good candidate for joining a plan, and you can probably find a plan that can save you 40 percent to 50 percent. By joining, your total out-of-pocket expenses won't go much above $3,600, even in the worst of situations. Look for a plan with reasonable monthly premiums and no deductible.

   4 or 5 drugs: Your total savings may only be 30 percent or 40 percent (because you'll end up in the "coverage gap" for part of the year. But by not joining you won't have the catastrophic coverage if you need more drugs, plus you'll have to pay a penalty if you join after May 15, 2006. Consider joining a plan for the catastrophic coverage. Just be aware that drugs not bought through your plan don't count toward your deductible or to get you across the coverage gap.

   6 or more drugs: You're a great candidate for joining a plan because your expenses are likely to be high enough for you to benefit from the 95 percent catastrophic coverage that kicks in when your total expenses exceed $3,600. The plans can save you 40 percent to 50 percent or more. Look for a plan with reasonable monthly premiums and some type of coverage or discount during the gap.

Third: Use caution, don't rush, learn more:

   If you already have coverage, find out how it's affected if you join a Medicare plan.

   If you have a low income or are on Medicaid, the plans are even more attractive -- far lower costs.

   Avoid scams -- they are beginning to crop up. Make sure the plan is truly Medicare-approved. See the "Scams" forum on www.medicaredrugplans.com.

   Keep learning the issues that people face as they use these plans. Check the reviews as well as the forums on www.medicaredrugplans.com.

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