How to Compare Medicare Part D Plans
Medicare Part D is one way to add prescription drug benefits to your Medicare coverage as a standalone plan. Private companies sell these federally regulated plans, and in many cases, there are many options to choose from. The variety can make narrowing down plans a bit difficult, but there are some criteria you can use to help your search.
We’ve come up with a list of seven ways to compare Medicare Part D plans to find the best one for you.
Before you compare: understand what “best” means
The best Part D plan for you is the best plan for you. Not your spouse, neighbor, golf buddy, or pastor. Everyone has their own drug needs and, by extension, everyone has their own “best” drug plan. You’re no different. That said, the ideal Medicare Prescription Drug Plan (PDP) is likely the plan that places as many of your medications in Tier 1 (the lowest cost tier) as possible, although it doesn’t always work out that way.
Two variables determine your ideal plan, if cost is your biggest concern:
- The company’s formulary: A formulary is a company’s list of covered drugs and which tiers they fall into, from Tier 1 (cheapest, generic medications) to Tier 5 (most expensive, specialty drugs). A company can change its formulary whenever it wants, but they must send notice to enrolled plan members before they do.
- Your medications: The prescriptions you take could be covered well by one company’s formulary and poorly by another. It’s essential before you begin searching for drug coverage to write down all the medications you take (name, dosage, and frequency) so you can accurately compare Part D plans.
Once you have your medications recorded and you understand that every company’s formulary is different, you can begin searching for Medicare Part D plans—see our guide on how to apply for Medicare Part D to learn how to search for plans.
As you're searching for plans, a great place to begin is to check how each plan's formulary covers your medications. But in the case that you find several plans that offer similar coverage, you can use any of the following questions to help you narrow down your Part D PDP options:
- Are there any restrictions on your drugs in the plan? Companies use restrictions called utilization management tools. These restrictions are hurdles you must jump over to get certain drugs. If a plan restricts a drug you take, it can be a hassle to get the medication you need. Sometimes, it may be better to find a plan without restrictions on your medications.
- Are the plan’s pharmacies in a convenient location? Typically, the closer, the better. Otherwise, you could look for pharmacies that you’re already familiar with.
- Are the pharmacies near you preferred? Preferred pharmacies generally offer the lowest prices possible for a plan’s drugs out of all the pharmacies in the network. To get the most bang for your buck, you want to buy from preferred pharmacies.
- Is there a mail-order option for medications? Mail order is a handy option, generally allowing you to purchase a larger quantity AND have it delivered to your door. It’s like Amazon for your drugs, only through large pharmacies or stores like Walmart.
- If I travel, will the plan cover my drugs out of state? If the pharmacies in the plan’s network are only close to your primary residence, you may not have coverage if you spend part of the year elsewhere.
- Does the plan have a good track record? Medicare rates each Part D plan with a star ranking, from 1 (poor) to 5 (excellent) based on customer service, user experience with the plan, drug safety, accurate prices, etc. You can find the Medicare Star Rating next to each plan in the Medicare Plan Finder.
- Is there a premium and/or deductible? Sometimes plans have premiums (monthly payments) and deductibles (a minimum you must pay before the plan covers your medication). It's important to weigh these costs against what you'll pay for your medications within the plan's formulary.
Armed with these questions, you should be able to find a Part D plan that works for you. If you’d rather get expert guidance through the process, call an agent.
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