Five Situations You Want To Avoid With Medicare Part D Coverage

Medicare Part D is a little harder to "mess up" than the other parts of Medicare, but not knowing the rules can be costly. Here in the ten things every American retiree needs to know about Medicare Part D are five situations you want to avoid with your Part D coverage.

6. Not being able to document prescription drug coverage under an employer insurance program can cause problems down the line.

Many people continue working and continue getting employer health insurance coverage after the age of 65. They usually have to enroll in Medicare Parts A and B, but they can opt to get their prescription drug coverage through their employer's plan. Only when they retire from their jobs do they want Part D coverage.

The catch is, unless you have other prescription drug coverage, you have to enroll in Medicare Part D at the same time you enroll in Medicare Parts A and B, or pay a penalty (which can really add up) for the rest of your life. Even with the late-enrollment penalty, it can still make financial sense to take Medicare Part D, but you can avoid this problem by getting a written statement of your prescription drug coverage every year you are covered by an employer policy after age 65.

7. Beware the Medicare Part D lock-in provision.

Once you choose a Part D plan, you usually have to stay in that plan unless you move into a different service area. Usually this means, you have to keep the same Part D provider unless you move to a different state. 

It might seem to make sense to go with the Part D plan that has the lowest premium, but you want to choose a national company that can give you service even when you travel to other parts of the USA, and you need to look very carefully at deductibles. The lowest monthly premium is not necessarily the lowest cost coverage, and once you choose a plan, you may be locked in for a long time.

8. Make sure any drugs you take regularly are in the plan formulary.

A formulary is a master list of drugs that are covered by a Part D provider. These are all drugs that meet Medicare requirements for inclusion on the list, but a Part D company may also further restrict what it is willing to pay for.

Here's an example of how formulary restrictions may work. Suppose you take a "nitrate" for angina or high blood pressure. One company may allow you to get 30 capsules of 30 mg each of Imdur (isosorbide mononitrate) every month, dispensed one capsule  per day. Another company may say, no, we have studies that it's better to get the drug in two doses a day rather than one, and you have to take 60 capsules of a product called Imso, which is also isosorbide mononitrate, but which is given as a 10 mg dose in the morning and a 10 mg dose in the afternoon, 1/3 less medication than the other company provides. The cost difference is small, but the effect on how you feel may be great, and if you want to take a form of the drug not in your Part D formulary, you may have to pay the entire cost yourself.

9. Make sure any brand-name drugs you take are in the plan formulary.

Some Part D providers insist you take a generic medication even if you know you need the more expensive, brand-name version of the drug. They will insist that you try the generic, then go back to doctor if it is not working for you, and get a second prescription before they will pay for the more expensive drug. If you don't want to deal with this situation, make sure the company you choose covers the drug you need before you sign up.

10. Beware the US Postal Service.

New postal service rules sometimes have letter carriers taking mail out of your box if you don't pick it up in three days or less. When this happens, it is sent back to the sender, with a note that you may have moved. If a notice from your Part D provider gets sent back to the insurance company, it may decide that you have died or moved away and cancel your insurance coverage. (They may or may not also cancel the automatic debits to your bank account to pay the premiums.) Make sure you have someone to stay in touch with your Part D provider should you need to stay in a hospital or nursing home before returning home to stay.