Don’t be fooled by Medicare drug plans with low premiums

Editor’s Note: Medicare open enrollment extends to Dec. 7 this year, but questions about this complicated program do not end then. Making Sen$e has turned to journalist Philip Moeller, who writes widely on health and retirement, to answer your Medicare questions in “Ask Phil, the Medicare Maven.” Send your questions to Phil.

Medicare rules and private insurance plans can affect people differently depending on where they live. To make sure the answers here are as accurate as possible, Phil is working with the State Health Insurance Assistance Program (SHIP). It is funded by the government but is otherwise independent and trains volunteers to provide consumer Medicare counseling in state and local offices around the country.

Moeller is a research fellow at the Center on Aging & Work at Boston College and co-author of “How to Live to 100.” Follow him on Twitter @PhilMoeller or e-mail him at

Betty – Ohio: If I am quoted a $0 monthly premium for a MA [Medicare Advantage] plan, can that premium change during 2015?

Phil Moeller: Nope. You’re good for the year. Your plan will be free to change its monthly premium for 2016. But if it makes any changes to its premium or benefits, it is supposed to notify you of those changes through an Annual Notice of Change document it must send you each fall. One word of caution: please look at total plan costs: co-pays, deductibles and individual drug charges. A “free” premium may be a false economy if a plan’s other charges are steeper than those of competing policies with higher premiums.

Betty – Calif.: I have Medicare Part D with United Healthcare insurance. Are there different types of Part D that pay more than others toward medications?

Phil Moeller: Yes. Drug plans negotiate separately with pharmaceutical companies, so their costs for drugs aren’t the same. But even if they were, they would be free to charge you different prices. They also are free to charge you prices for premiums, deductibles and co-pays that differ from other plans.


Ask Phil Here

In your area, you may have “basic” Part D plans that offer standard coverage, as well as “enhanced” plans that offer a somewhat greater level of coverage, generally in exchange for a higher monthly premium.

Many consumers are wowed by lower monthly premiums and don’t look at other plan details that will affect their total out-of-pocket expenses for the plan. But this is the bottom line that counts, and it should reflect your actual drug and health needs. You can use the Medicare Plan Finder to find this information. Using this website, you can see which plans cover your medications and get an estimate of how much you’d pay before choosing and enrolling in a Part D plan.

J. — Va.: If I drop my Part D for a year, is there a penalty for rejoining? What are the advantages of retaining a Part D prescription drug plan if I find that I can acquire my meds for less money without it?

Phil Moeller: If you drop your Part D plan for a year, you may have to pay a penalty if you rejoin later. The penalty is an extra amount that’s added to your monthly Part D premium. Roughly speaking, it could add 1 percent of your monthly premium charge for each month you are without coverage, and the penalty could be imposed for the rest of your life. So, if you were without coverage for a year, you might face a 12 percent premium penalty. With monthly premiums averaging about $33 a month, your penalty could be about $4 a month or nearly $50 a year.

Also, you may owe a late enrollment penalty if, at any time after your initial enrollment period is over, there’s a period of 63 or more consecutive days when you don’t have Part D or other creditable prescription drug coverage (creditable, in Medicare-speak, means other coverage that’s as good as Medicare Part D coverage).This late enrollment penalty would not apply if you get Extra Help subsidies to help pay for your Medicare prescription drug coverage. More than 10 million people do, so it’s no big deal and it may be easier to qualify than you think.

I’m all for being a savvy consumer, but you need to be careful here. Even granting that you have Superwoman (or Man) genes, you may not be in control of when you need a very expensive drug. Life does get in the way. So do strokes, heart attacks, auto accidents and other health events. Should you suspend Part D coverage, you may have to wait until the next year to get a policy. Not only would you pay penalties then but you’d be on the hook in the meantime for what could be financially crippling drug costs.

Insurance is, well, insurance. Your main goal here should be protection, not financial gain.

Pat — Fla.: Is it true that Medicare D has stopped covering Synthroid and will only cover generics? I had a bad reaction to a generic.

Phil Moeller: I am sorry to hear of your adverse reaction to a generic. Simply Googling “Synthroid” and “adverse reactions” is a recipe for insomnia if not worse. As to your question, I checked the Medicare site, and Synthroid is covered. However, that does not mean an individual drug plan has to include it.

Each Medicare Part D plan has its own formulary, or list of covered prescription drugs. Whether Synthroid is covered will depend on whether a Part D plan has included Synthroid as a covered drug on its formulary. In some cases, your plan may have a coverage rule that requires you to try a similar, lower cost drug (such as a generic) before the plan will cover a prescribed drug (for example, Synthroid). This is known as “step therapy.”

If you or your doctor believe you need a drug that isn’t on your plan’s formulary or think a coverage rule should be waived, you can ask your plan for an exception. When you request an exception, your doctor must provide a statement explaining the medical reason why the exception should be approved. In my mind, your adverse reaction to a generic is compelling. But my tendency to say yes to pretty much any person’s health needs makes me a bad candidate to be an insurance company representative.