Note: this post was updated in March of 2017.
Part D is not perfect. We know that.
However, having worked with Medicare products for over 12 years now, I can tell you it’s FAR better than what we had before 2006 – which was nothing!
That’s right, before 2006, people on Medicare – including my clients – had nearly no assistance with prescription drug coverage for over 50 years. When the Medicare Modernization Act was passed and Part D rolled out, tens of millions of beneficiaries enrolled in the program. They found substantial savings for their prescription drug needs. This was especially important for people who took expensive medications for chronic health conditions, which is why you need Part D.
Imagine if you had to pay out of pocket for medications like these:
Medicare Part D, however, is a voluntary program. So even though we’ll explain why you need Part D, some people will choose to believe that “it wont’ happen to me.” Every year, we meet dozens of Medicare beneficiaries who choose not to enroll despite the risks.
But you see, since our agency helps thousands of clients with their Medicare-related insurance decisions, we see what happens on the back end. That means we end up seeing a few people ever year who experience a staggering financial loss due to no Part D.
Let me give you a true story example to demonstrate why you need Part D coverage.
Why You Need Part D: A True Client Story
A few years ago, one of our existing clients contacted us with sad news. She had listened to our annual recommendations about why Part D is so important. However, she had been a healthy person all her life.
She just couldn’t bring herself to spend $15 – $30/month on a Part D drug plan. She had no need for any prescription drugs at that time. Year after year, she declined to enroll in Part D during the annual election period.
Then one year in late summer, she was diagnosed with cancer. Her physician prescribed an oral cancer medication called Gleevec. This medication was urgent and potentially life-saving for her. Because she had declined Part D coverage, she had no choice but to pay for the medication out of pocket.
The cost of a 30-day supply was $5,600/month. When she called our office, she said, ” I finally understand what you have been trying to warn me about all these years. I’m going to have to pay this out of pocket now, aren’t I?”
The good news is that she had saved diligently for her retirement. She was able to to pay for the drug from September through December out of her savings – over $20,000 for 4 months of Gleevec. In October, we used her annual election period to join a Part D drug plan that started on January 1st.
Catastrophic Coverage You Can Count On
I cannot stress this enough. When you buy Part D, you are not buying it just for the meds you are using now. You are buying insurance coverage for future drug needs.
Part D has a catastrophic coverage limit, and it is the best part of the coverage. It protects Medicare beneficiaries from massive drug spending in any given calendar year.
It worked beautifully for my client once it was in place. She filled her Gleevec in January on her new drug plan. Just that one-month supply of her medication in January pushed her all the way through the coverage gap and out the other side.
For the rest of the year, she paid only 5% of the drug costs to continue her treatment for that year. This was still over $300/month, but $300 is a heck of a lot more manageable than $5600/month.
Now I consider her lucky that this misfortune happened to her in September. Imagine if she had been diagnosed in February instead of September. She would have had to pay $5600/month for that medication for 11 months. Not everyone has the savings to do that.
For this reason, I recommend that you protect yourself from scenarios like this. You don’t want to risk paying a fortune for a critical medication. If you don’t take many prescription medications now, enroll in one of the least expensive Part D drug plans in the market. All of them come with catastrophic coverage. That way you aren’t spending too much, but you have the coverage for a rainy day.
Part D is NOT a Money Maker for your Agent
Some of you reading this are thinking – “Well of course you recommend Part D because agents get paid to sell Part D.” Let me shed some light on this.
Part D commissions for agents are so low that most agents will no longer help people with Part D. They just send them to 1-800-MEDICARE to enroll on their own. Why? Because an agent gets paid about $3/month on a Part D policy. An agent would have to write thousands of them just to barely make a living. So I assure you, no agent is getting rich off Part D.
Lazy agents will write your Medigap plan and throw you to wolves on Part D because it’s not worth their effort.
Part D is a Huge Time Investment for your Agent Too
Another reason many agents won’t help you with Part D is that the support needed on the back end is high. Pharmacies charge the wrong rate or the insurance company requires an exception from your doctor. Sometimes your plan refuses to provide the quantity that you need. The list of hassles goes on and on.
Helping a client resolve these problems can sometimes take hours of conference calls between your insurance company, your doctor and your pharmacy. So agents who are lazy agent will write your Medigap plan and throw you to wolves on Part D because it’s not worth their effort.
So I promise you that your agent isn’t getting rich selling Part D. Helping you with Part D will often drain an enormous amount of an agent’s time. We don’t recommend Part D to fatten our wallets. We recommend it because without you are exposed to catastrophic drug spending. We see it too often, and it’s heartbreaking.
Get Someone on your Side with Part D
Please consider enrolling. Make sure to do so through an agency like ours that won’t pass you off to Medicare to enroll. We’ll help you choose a Part D plan if you have your Medigap plan with us. We’ll support you on the back end of it too. That’s how much we value our Medigap policyholders.
Every year our agency explains Part D plans to thousands of new Medicare beneficiaries who are setting up their Medigap plans through our agency. There’s no need for you to go it alone. We can help you with the best way to insure yourself at the lowest possible cost. Give us a call today for help with all of your Medicare needs.