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By Christine Benz and Mark Miller | 10-11-2012 12:30 PM

Why It Pays to Shop Around During Medicare Enrollment

With double-digit increases looming for most Part D premiums, Morningstar columnist Mark Miller urges seniors to examine their options to ensure they are in the optimal drug plan for 2013.

Christine Benz: Hi I'm, Christine Benz for Open enrollment season for Medicare runs from Oct. 15 through Dec. 7. Joining me to share some tips for the process is Morningstar contributor Mark Miller. Mark, thank you so much for being here.

Mark Miller: Thank you, Christine.

Benz: Mark, you mentioned in a recent article that the Part D premiums for some recipients are going up quite a bit this year. What kind of increases are we talking about?

Miller: Well, we're seeing double-digit increases in seven of the 10 top plans by enrollment, and these 10 plans have maybe 80% of all people who are enrolled in Part D. So, within those top 10, seven of them are going up by more than 10%. The highest one is 23%. There are a number that are in the sort of 18%-15% increase range. So, there are some big changes in the premium levels with these top plans.

Benz: But the premiums aren’t the only thing you need to stay attuned to when you're shopping.

Miller: No certainly not.

Benz: So, what else?

Miller: You need to look at what the deductibles are in the plan, for example. Co-pays. What are the specific costs for the drugs you're taking?

Another thing to check carefully is what is called the formulary rules for a drug, meaning under what conditions will this plan provide the drug? For example, you might be on a drug where it's listed as covered, but in the fine print it says the plan has the right to go to the doctor and asked that doctor to try some cheaper medication first. The back and forth between the plan and the doctor could take weeks if not months during which time you're hung up. So, that's another thing to pay careful attention to is the formulary.

The third is many of these plans are going to preferred provider networks for pharmacy delivery. They've set up their own networks for delivery as a way to save money. That's a perfectly reasonable thing to do, but [you should] check and see what is the delivery method that's going to be in a plan that you're looking at and if that is acceptable to you. Some are going to be in-pharmacy in a store. Others are going to be by mail, for example.

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