Senior citizens have just until the end of the year to change their Medicare drug coverage, and advocates say shopping may save them some serious money.
"You could be in for real sticker shock in January if you don't," said Bill Vaughan, senior policy analyst for health with Consumers Union. "We recommend people double-check if they are taking drugs how their plan may change in the cost of those drugs in the new year."
A study of the 2008 premiums by Consumers Union showed an average 16 percent increase in Texas in Medicare Part D monthly premiums and out-of-pocket costs for five commonly used prescription drugs compared with a year earlier. The drugs looked at were Lipitor for high cholesterol, Zoloft for depression, Celebrex for arthritis, and Altace and the generic Nifedipine for high blood pressure.
Consumers Union found a $2,100 annual difference between the lowest-cost and highest-cost plan within Texas for the premiums and five drugs sampled -- $5,088 for EnvisionRx Plus Gold versus $2,987 for HealthSpring Prescription Drug Plan.
By increasing the out-of-pocket costs for these drugs through higher co-pays or by taking them off their formularies altogether, insurers can raise their profits, Vaughan said.
"These are for-profit companies," he said. "If they find they are losing money on some of these drug costs, they will raise them to shift people out of their plan."
Making choices
Next year will mark the third year that Medicare Part D will be available for drug coverage for senior citizens. Nationwide, 24 million Americans have signed up for one of 1,800 plans offered.
A Kaiser Foundation study showed that the plans have resulted in expanded drug coverage for seniors. In 2006, 8 percent of seniors lacked drug coverage compared with one-third of seniors without drug coverage in 2005, before Medicare Part D went into effect.
But consumers need to be diligent in examining their plans every year, said Michelle Kitchman Strollo, principal policy analyst for the foundation.
"This program is based on the concept of choice," she said. "People are not taking advantage of the fact that if they have this choice, they may find they can save money."
Just 12 percent of seniors have changed plans during the open enrollment period, which began in mid-November, according to Medicare.
'Huge changes'
Although the number who have switched plans this year mirrors the percentage change last year, Vaughan said that there are more changes in premiums, co-pays and formularies in the 2008 plans that will cost consumers more next year.
"In 2006-07, the data was not that dramatic," he said. "This year, we're seeing some huge changes in drug prices."
The vast majority, 88 percent, of plans in Texas increased their overall costs on monthly premiums and the out-of-pocket costs on the five drugs, according to the study. Of the 51 plans offered statewide, 14 percent increased their costs by 25 percent or more, Vaughan said.
Consumers should be wary of plans that reduced their monthly premiums for next year as well, he said.
"You may have been sent a letter saying your plan is lowering its premium, but you have to look beyond that at the deductibles and co-pays and see if your drugs are still on the formulary," he said.
Shop around
Most drug plans have several tiers of co-pays, with generics generally being in the lowest tier.
If your drug has been moved to a higher tier, or has been taken off the drug plan's formulary, that would be a signal to shop around, Kitchman Strollo says.
For example, Consumers Union found that Blue MedicareRX Standard actually reduced its premium for next year by $3 but had the greatest increase in total costs for the basket of five drugs, with an increase in total out-of-pocket costs of $1,263.
Another area to look at is the coverage gap designed in the Medicare Part D law. For next year, this so-called doughnut hole in coverage starts after a senior citizen incurs $2,510 in total drug costs in 2008 and doesn't end until they have paid out-of-pocket expenses of $4,050. After that, catastrophic coverage begins.
Next year, there are no Texas stand-alone plans that cover brand drugs in the doughnut hole, but 15 plans cover all or some generics in that hole. Five Medicare Advantage plans in the state do cover brand names in the doughnut hole, but consumers should be aware that MA plans generally have other limitations, including restraints on doctor and healthcare choices, Vaughan said.
"Shopping for your plan is complex, confusing, scary and not fun," Vaughan said. "It's not like shopping for the grandkids."
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