How to Find the Best Medicare Part D Plan

Open enrollment for Medicare Part D prescription drug coverage runs from Oct. 15 through Dec. 7. The average monthly cost for a plan is declining to $55.50 next year from $56.49 in 2023. Now is when the 49 million Part D participants search for better deals and save as much as $700, according to a survey of Medicare insurance agents.

Figuring out the savings may not be easy. Teresa Mears, the founder and CEO of Living on the Cheap, a group of 40 bargain-hunting websites nationwide, knows how to pinch pennies. But last year, she stumbled when she switched Part D plans.

"Hah! I changed and didn't save money," she recalls. "I only take one drug. I changed plans thinking this drug was covered, based on the info online. But it was not. I fear for people who are trying to manipulate this system when they need a lot of drugs."

Even a Medicare expert says it can be tough to make the right decisions. Like most people, Jesse Slome learned about changes in his Part D plan via a postal mail notification. Slome, who is the executive director of a trade organization for insurance agents, the American Association for Medicare Supplement Insurance, noticed that the cost of his personal plan was tripling.

"They offset that by making generic drugs free. So, it's not simple. Multiple pieces of the puzzle are changing," he said, "and those differences can be really expensive."

He says there is a way to figure this out yourself, but it requires some effort – and time. Here's what you need to know.

• An annual "notice of change" to your current Part D plan already should have arrived in your mailbox from your current Part D insurer. The Part D enrollment period begins Oct. 15 and runs through Dec. 7. Changes to the plan take effect Jan. 1, 2024.

• Start comparing plans Oct. 1 on this Medicare site. (If you used it before Oct. 1, you got 2023 information.) If you already have a Medicare account, log in. If you don't, you can create one or continue without an account by just entering your zip code.

• Answer "yes" to the question: "Do you want to see drug costs when you compare plans?" To make the comparison, you'll need to gather all of your prescription medications and type into the site exact medication names and dosages. You'll also be asked whether or not you get help paying for your Part D plan.

• Select your preferred pharmacies. You can pick up to five from which you want to see drug costs.

• After you click "Done," you'll see a list of the Part D drug plans available to you. They are ranked by the lowest drug costs plus the monthly premium costs for all 12 months. If you have lots of pharmacy options in your area, it can pay to clear and enter more potential pharmacies. The price differences can be surprising.

• Once you have identified the cheapest plan, click on the Enroll button and sign up for your 2024 plan on Medicare's secure website.

If you decide that the plan you have is the one you want, do nothing and you will be re-enrolled in your current plan. If you ignore this whole process, you also will also be re-enrolled.

If this sounds confusing and more difficult than you think you can manage, find a Medicare insurance agent willing to help. That may not be as easy as it sounds because Medicare pays agents only about $20 for helping someone find a Part D plan. This may not be enough to coax a busy agent to help you, Slome points out.

If you used an agent to help you choose a Medicare Supplement or Medicare Advantage plan (one that didn't come with Part D), ask that person for further help.

Make it easy by emailing your required information, including your current medications with exact medication names and dosages and your preferred pharmacies. Do it at the beginning of open enrollment when the agent is probably less busy than he or she will be at the end.

Otherwise, The American Association for Medicare Supplement Insurance has an online list of insurance agents who handle Medicare supplements and who may be willing to help you with your Part D plan.

Slome, the trade association director, said his doctors last year changed his prescriptions shortly after open enrollment closed, making his new plan choice the wrong one even before it took effect. Slome called the pharmacy and Medicare. He asked if he could switch plans — whether there were any exceptions to the end of open enrollment. The answer was, "No, you can't do anything after the deadline."

Based on that costly lesson, Slome suggests that, if possible, people schedule medical care that might result in different prescriptions before the end of Medicare open enrollment.

He also recommends that people consider prescription help plans. A good place to start is the National Council on Aging's Benefits Checkup to find what health and prescription help is available in your zip code. Sometimes, no matter what your income, you may find that it is cheaper to pay directly rather than use Medicare. Discount plans worth checking out include GoodRX and CostPlus.

In 2024, the federal Inflation Reduction Act of 2022 will expand a Part D low-income subsidy. It will now help pay for prescriptions for people with incomes as much as 150% of the federal poverty level, or $45,000 for a family of four. That compares with an income threshold of $37,463 in 2023.

That same new law will do away with 5% Part D coinsurance requirement in the gap and will have Part D insurance plans pay 20% of total drug costs instead of 15%.

The catastrophic threshold will be limited to $8,000, up $600 from 2023, but the amount that Part D enrollees spend out of pocket will go down, offset by the value of the manufacturer price discount on brands in that phase. That means Part D enrollees who take only brand-name drugs in 2024 and spend $3,300 out of their own pockets will pay no more costs for their medications.

These pharmaceutical-plan changes, while complicated, clearly are good news for Medicare participants with extraordinarily high drug costs.