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Consumer

Carefully check Medicare drug coverage

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WASHINGTON (11/30/11)--You may already know that Medicare's 2012 basic monthly Part B premium for outpatient care will rise only slightly for most recipients--about $3.50--and premiums for prescription drug plans, known as Part D, will not change. But a new study brings distressing news: Co-pay increases for preferred brand-name drugs will average 40% in 2012 (Associated Press Nov. 17).

It's not much better for nonpreferred and specialty brands. Those co-pays will see an average increase of 30% to 32% in 2012.

The study, by Avalere, a Washington, D.C., data analysis firm that serves industry and government, reinforces the importance of carefully checking your prescription coverage before open enrollment ends Dec. 7, 2011.

As you compare your current plan with what is offered for 2012:

  • Don't just look at premiums. Plans with the lowest monthly premiums may leave you with the most expensive co-pays for the drugs you take.
  • Make sure your drugs are covered. While last year's plan may have covered your prescription drugs, don't assume that this year's plan will.
  • Keep your eyes on the donut hole. Depending on how the plan you choose negotiates retail drug prices, you could reach this phase earlier or later than someone else on the same prescriptions. AARP has a free, online calculator that can help you avoid falling into the coverage gap. To access the calculator and information about how to use it, type "AARP donut hole calculator" in your browser bar and click "enter."
The donut-hole phase begins when the total retail cost of your covered drugs--not just what you spend on co-pays--reaches $2,930. After you hit that number, you pay a percentage of those costs. Before the health care reform law of 2010, it was 100%. In 2012 it's 50% on all brand-name and biologic drugs and 86% on generics and Part D-covered supplies used to administer insulin.Your donut hole costs will decrease every year until 2020, when you will only have to pay 25% of the cost of any drug in the gap.

And for more information about that Dec. 7 enrollment deadline, read "Medicare NOW: Enroll or Switch" in the Home & Family Finance Resource Center.