I wasn’t happy about turning 65, but as far as my medical and Prescription Drug Plan (PDP) coverage is concerned, Medicare is the best!

When it comes to my health insurance, I couldn’t be happier! Before I got on Medicare, I was paying a very high monthly premium for an Affordable Care Act (ACA) “Bronze” plan that had a $5,000 per calendar year deductible. Consequently, I rarely used my ACA health insurance benefits because of the ridiculously high deductible, but at least I had maternity coverage! (Pardon my sarcasm. 😉

Now, my Medicare Part B premium is $144.60 per month and my Medicare Supplement is $162.00 per month, so I’m currently paying a total of $306.60 per month with a ZERO deductible for my health insurance! My current health insurance is so much better than before!

Medicare Does Not Cover Outpatient Prescription Drugs

Medicare and Medicare Supplements do not cover outpatient prescription drugs, so most people sign up for a standalone PDP, also known as Medicare Part D. It is not required that you sign up for a PDP when you first turn 65 or begin your Medicare Part B (Medical insurance), but a lifetime monthly penalty will be added on if you sign up later on.

The Medicare Part D penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2020) by the number of full months that you were eligible for, but didn’t enroll in, a Medicare PDP and went without other creditable prescription drug coverage.

The penalty comes out to approximately $0.33 per month for every month you were eligible for a PDP but didn’t have one. So, to use round numbers, if you went 10 months without a PDP and then signed up for one, the monthly lifetime penalty would be about $3.30 per month on top of the regular monthly PDP premium.

NOTE: The penalty amount is re-calculated each year based on the new base beneficiary premium amount, so it may go up or down each year.

I’ve heard many people say that they are “healthy” and they don’t take prescriptions, so they don’t feel the need to sign up for a PDP when they start Medicare. Unless it’s a financial burden for you to sign up for one, I always advise my clients to at least sign up for the cheapest plan, which is only about $12.80 to $13.20 per month, depending upon where you live.

NOTE: Medicare Supplement insurance is my primary focus and specialization. I am not certified to sell PDP’s. If you want to apply, you can call the insurance carrier directly and have them enroll you on the phone, or you can enroll on your own on the Medicare.gov website. Please click here to see a short video I made that explains how to sign up for a prescription drug plan.

It’s Important to Shop Around Each Year

As with Medicare Supplement insurance, it’s important to shop around each year to make sure that you aren’t paying too much for your PDP. What is good this year, may not be so good (or affordable) next year. PDP rates can vary significantly from one PDP to another and from one pharmacy to another!

The Annual Election Period (AEP) goes from October 15th through December 7th each year. If you have a PDP or if you will be getting one, you should shop around every year during the AEP to see if there is a better plan for the following year because drug formularies and prices change from year to year. Coverage would begin in the following January.

Example of the Savings You Can Have With a PDP

In 2020, I switched my PDP to Clear Spring Health Premiere RX, and I’m currently paying $12.80 per month for my plan. Although I’m in relatively good health, I take three prescriptions on a regular basis:

• Levothyroxine Sodium
• Fluticasone Propionate nasal spray
• Latanoprost OP eye drops

The Von’s pharmacy is close to where I live and “in network” with my Clear Spring Health PDP. If I didn’t have a PDP, I would be paying $61.69 per month for the Levothyroxine Sodium, $62.69 per month for the Fluticasone Propionate, and $42.99 per month for the Latanoprost eye drops for a total of $167.37 per month or $2,008.44 per year!

With my PDP, I am paying $2.00 per month for the Levothyroxine Sodium, $6.00 per month for the Fluticasone Propionate, and $6.00 per month for the Latanoprost eye drops for a total of $14.00 per month in co-payments for all three of my prescriptions. When you factor in my monthly premium for my PDP of $12.80 per month, altogether, the total cost (premiums and co-payments) for my Clear Spring Health PDP is $26.80 per month or $321.60 per year!

In other words, I am saving $1,686.84 per year by having a prescription drug plan with Clear Spring Health ($2,008.44 – 321.60)!

What About GoodRx.com?

GoodRx.com is an excellent website to use regardless of whether you have a PDP or not. Please click here to see a short video I made about how to use the GoodRx website. Sometimes it is cheaper to use GoodRx than your PDP. One of the main problems with GoodRx is that sometimes you can find great deals on the website, but not always. Some people take some very expensive medications that are not on the GoodRx website, so it’s really hit and miss.

I looked up the three prescriptions mentioned above, and here are the current GoodRx costs in my zip code:

• Levothyroxine Sodium – $18.19
• Fluticasone Propionate nasal spray – $12.14
• Latanoprost OP eye drops – $15.32

The total cost for all three of these prescriptions at GoodRx is currently $45.65 per month or $547.80 per year. In comparison, with my PDP, my total cost is $26.80 per month or $321.60 per year! In this example, I am still saving over $225 per year by having a prescription drug plan. Also, the drug prices can change from month to month with GoodRx and you may have to run around to different pharmacies every month to pick up your various prescriptions.

PDP’s covers most prescription medications and some chemotherapy treatments and drugs. If Part B doesn’t cover a cancer drug, your Part D plan may cover it. PDP’s also cover all commercially available vaccines, except those covered by Medicare Part B, when they are reasonable and necessary to prevent illness.

Conclusion

Some PDP’s are good for some people but not others. It really depends upon what prescriptions you are taking, but I would always recommend that you go to the Medicare.gov website and check out the Medicare Plan Finder tool to see if a PDP makes sense for you or not. There are pros and cons to each, but in most cases, I would still recommend that you sign up for Medicare Part D, a prescription drug plan.