For any Medicare beneficiary this year you may want to go shopping for a new Part D Plan, prescription drug coverage, before the end of Open Enrollment (October 15 to December 7 of 2020).
The reasons as to why you may want to go shopping are:
1. Number of Plans: there are, on average, a couple of new plans added to each state, with Arkansas, Georgia and Texas adding the most (4 new plans).
2. Premiums: though premiums have increased by for the first time in four years the increase in premiums on a national average is just under 2.00%.
- 21 states have seen a decrease in overall premiums with Oklahoma leading the at a 7.48% decrease.
- The remaining states have realized an increase of about 4.20% in premiums.
- Iowa, Minnesota, Montana, Nebraska, North and South Dakota and Wyoming all experienced an increase of over 8.50% in premiums from 2020 on average.
3. Deductibles: Part D Deductibles, which must be met before insurance start, have decreased too.
- The national average Part D Deductible fell by just under 1.00%.
- The national average cost is $399.13 annually
- Arkansas experienced the largest drop at 3.52% while Michigan realized the largest increase from 2020 at 4.05%.
4. Total Overall Costs: unfortunately, Total Overall Costs, which includes Part D Plans with and without a Deductible has increased by about 2.93% from 2020.
- The reason for this increase is that already existing Part D Plans from 2020 have become more expensive.
The good news and the reason to go shopping is that the newly added Part D Plans to each state are over 23.00% cheaper than the established plans from 2020 that are available in 2021. Meaning prices from 2020 went up significantly!
- New Jersey by far has the cheapest new plans available as they are over 35.00% less expensive with Florida being second at 29.00%.
- California is the only state where the new Part D Plans, on average, are higher than the established Part D Plans in terms of Total Costs.
- Every other state is providing new Part D Plans that are between 10.50% to 29.00% cheaper than the already established Part D Plans from 2020 that are available today.
Even with these changes and these new Part D Plans the key factor in determining which Part D Plan is best for you is the Plan’s formulary or list of medications that will be covered in 2021!
For those who are currently prescribed medications the goal, should be to match as many of your medications to the formulary being offered by any Part D Plan.
For those who are currently NOT prescribed medications there are two rules of thumb:
- If you are not expecting any changes to your health for the year then, yes, the cheapest Part D Plan may be the most suitable for you.
- If you do expect your health to change within 2021 the better option, regardless of costs, may be to choose to the Part D Plan with the largest formulary.
Whichever route you choose during Open Enrollment, please remember that it is always best to consult with a financial and or health professional to determine which Part D Plan is best for you.
When it comes to your health, which is your greatest asset, planning for it should always come first.