Retirement Planning Blog

There are plenty of options available for the beneficiaries to choose the right Medicare Part D prescription drug plan for them. Most of the U.S. states offer its enrollees to choose from more than 40 Medicare Part D prescription drug plans. In some counties, the number may reach up to 70. Seniors have the option and the opportunity to go through all the available plans, analyze those and choose the ones that suit them the best. But according to a new study, it has been found that most Medicare Part D beneficiaries don’t choose the lowest cost drug plan.

According to a research by the Kaiser Family Foundation and the Massachusetts Institute of Technology economist, Jonathan Gruber, only 6% of the seniors opted for the best priced option in the year 2006. By not choosing the lowest cost plan, the beneficiaries had to lose on an average of $520 on their monthly premiums and out-of-pocket expenses if there were any. The report also says that only 10% of them chose one of the 5% of the best priced plans. It could have also saved $400 per month for the beneficiaries. Around 53% of the enrollees chose one of the 25% of plans with the lowest costs.

So, the question arises, why seniors do not often go for the lowest cost plan? According to Gruber, there are several factors that play a major role in influencing the decisions of the seniors to enroll in higher priced plans. Good reputation, strong brand name, recommendations, fewer utilization restrictions and convenient in-network pharmacy etc. may lead them to go for the higher priced plans.

So, next time when you go to choose your Medicare Part D plan, you can analyze and compare various plans available. There is a tool offered by the Centers for Medicare and Medicaid Services, which you can use to compare various plans. You need to enter the drugs that you may require to take in the coming year and the tool would compare the estimated out-of-pocket costs under different plans. And if you find any different plan that would suit you better than your current plan, you can surely shift to that one. For this, you need to attend annual open enrollment period of Medicare which is scheduled to be held between November 15 and December 31.