If you're enrolled in a Medicare Part D plan and you're being overcharged for the prescription drugs you take, it can throw you prematurely into the infamous "doughnut hole."
This issue isn't straightforward because what a pharmacy charges can vary greatly. "This is one of the most confusing aspects of Medicare," says Adrienne Muralidharan, senior Medicare specialist for the Allsup Medicare Advisor.
Allsup specializes in helping Medicare recipients choose the right Medigap or Medicare Advantage plan and the right Part D prescription plan. Allsup charges a minimum of $75 for help evaluating Part D plans and as much as $350 for evaluating Medigap and Medicare Advantage plans.
Whether you choose professional help or you do it yourself, choosing a Medicare drug plan is a very complex and personal decision for someone living in retirement. Once you have made the choice you are stuck with it until the enrollment period for 2012, which opens in October. So it definitely pays to monitor what you're spending and figure out if you're getting what you're entitled to.
June is a good time to check how close you are to the doughnut hole. The doughnut hole opens when your total retail drug costs reach $2,840. This is the total retail cost of the covered medications, not what you have spent at the pharmacy. As a Medicare Part D beneficiary, you pay only a portion of the $2,840 and your Part D plan pays a portion. Your total retail cost of prescription medications is calculated from your Medicare Part D plan's negotiated retail drug price -- and every Medicare Part D plan can have a different negotiated retail drug price. Generally, you'll pay the first $310 dollars as a deductible, and then you'll be responsible for paying 25 percent of the next $2,530, for a total out-of-pocket cost of $942.50, plus whatever you pay in premiums for the plan.
To monitor this, you need to know what the negotiated retail drug price is for the drugs you take and you need to know what you are being charged. You'll get a Medicare Summary Notice and/or Explanation of Benefits. If you're computer savvy, you can also easily keep this information on a spreadsheet. If you're not, use a pencil, paper and a calculator. If you're being overcharged, point it out as soon as possible to your pharmacy and your plan administrator. You also can file a grievance through the Quality Improvement Organization in your state.
It's crazy that Medicare is this complicated -- but it is -- and the Medicare error rate for traditional Medicare is 10.1 percent; for Medicare Advantage plans, it's 14.1 percent. So make paying attention to these details part of your retirement planning.