Saturday, October 8, 2016

IBM OneExchange Medicare 2017 prescription drug (Part D) plan idiosyncracies

I am learning a few things about part D plans idiosyncrasies.  In a post last year I wrote quite a bit about the planfinder ( but there is ever more to learn.  It's important to use the government planfinder to look at the plan you think you want to buy because the description of it is more detailed than what's in OneExchange plan details. Here's a few things to consider:

Part D penalty (added 10/23/16):

Many times I've heard people say they don't need part D insurance because they don't take any drugs.  It's your choice to not buy a part D policy but you will pay a penalty if you change your mind AND you can only enroll in a part D plan during fall open enrollment to have the insurance in January of the following year. The penalty is 1% per month of the average plan premium for every month you don't have a part D plan.  It adds up and the average plan premium is reset (higher) every year.  My recommendation, buy the cheapest plan available in your zip code and maybe pick one that doesn't have a deductible.  This way, if you do need to fill a one off prescription you won't have to meet the deductible.  It might be worth paying a higher premium.

Tier 1 Generic Drugs:
Medicare rules to drug insurance companies require there be NO copay for a drug classified as Tier 1 Generic.  A drug insurance plan can classify a drug into any tier they want.  Many now have Tier 1 Preferred.  Thereby, they put the drug in a category such that they can charge a copay.  Pay attention to how your drug plan classifies your drugs.  I found a plan for someone that had a deductible but the person's drugs were all Tier 1 Generic so there were no copays and therefore no deductibles come into play unless it applies to a new prescription not in that tier.
Deductibles (updated 10/23/16):

If you need regular prescriptions, and not a lot of one off prescriptions, the only reason to worry about deductibles is if you have a cash flow problem.  Otherwise, pick the plan that has the lowest annual cost.  It's rather sad that people who can least afford it because of cash flow issues end up paying more for their drug plans.  Government subsidies are available if your income dips below about $24,000/year for a married couple and you have few assets (ala cash in the bank).  If you tend to have a lot of one off prescriptions in addition to your regular medications then you might want to consider picking a plan with no deductible.

Search options:

In planfinder you can filter out plans that do not cover all your drugs by clicking on the "Drug options" on the left side of the screen and selecting that option.  That feature is available to you just before you continue to plan results.

Drug entry:

Make sure all the drugs you take are for FDA approved conditions.  In an earlier post I explained what this means.  If you are taking a drug (like Adderall) it won't be covered unless you are under 18 years old because that is the demographic the FDA approved.  There is no sense entering that drug and it may be misleading because the cost of that drug is included in the results but Medicare won't allow it to be covered by the drug insurance company unless it meets the on-label criteria. Also, don't enter drugs into plan finder that no plan will cover.  For example, Medicare does not allow coverage of hair growth drugs.  Plan finder will include the cost of those drugs in the results but I think it is misleading.  Any drug you buy which is excluded will not count toward the doughnut hole calculation.

Zip Code Drug Tiers (added 10/13/16):

If you are selecting a drug plan for a relative, make sure you enter the right zip code.  This is important for a couple of reasons.  Drug insurance plans are sold by zip code.  That means a plan might be available for purchase in New York City, but not in Syracuse.  Even if a plan looks like it is available in two different cities, it may not be structurally the same.  The drug costs of what I thought was the same plan turn out to be different for San Francisco than for New York City.  The insurance company put exactly the same prescriptions in different tiers.  In San Francisco the prescriptions were in tier 1 generic which has no copay.  In NYC they were in tier 1 preferred which has a copay.  It is bad enough that the tier a drug is assigned to varies widely from plan to plan.  Drug insurance companies also vary it from zip code to zip code.

One Exchange website plans (added 10/23/16):
The list of plans you see on the One Exchange website might not include all the plans they sell.  I know this is true for their Medicare Supplement plans particularly regarding AARP UHC plans.  If there is a part D plan on that is a better plan for you but doesn't show up on the One Exchange website, call and ask if they sell the plan.  This is also true for Medicare supplemental plans and for Medicare Advantage plans.  My guess is they show the plans on their website that provide the most commission to them.

Deductibles and Doughnut hole 2017 coverage changes (added 10/23/16)

The deductible plans are allowed to increase deductibles from $360 to $400 in 2017.  Not all plans have deductibles but that just means they make up the difference with higher copays. An Affordable Care Act (aka Obamacare) provision is gradually lowering until 2020 the copay cost in the coverage gap.  The 2017 percentage you will pay for brand name drugs in the gap drops to 40% (down from 45% in 2016) and the percentage you will pay for generic drugs drops to 51% (down from 58% in 2016).  Plan finder will reflect those changes in the plan cost calculations. Reminder, the ACA target copay for 2020 for both drug categories is 25% unless congress modifies the ACA.

I'll keep updating this list as I learn more.