Well, as you have probably heard, the annual inflation adjustment Social Security recipients will get in 2017 will be 0.3%. That’s about $4 a month for the average retiree.
I know how frustrating that is.
I have a way retirees may be able to boost their income in 2017: by reducing what you pay for prescription drugs, you may be able to save hundreds of dollars a year. That might help take the sting out of a $4 Social Security adjustment.
Here’s the deal:
If you, or someone you know, are enrolled in Medicare I urge you to take advantage of the annual open enrollment season to shop around for the most cost-effective way to get the coverage you want.
Between now and December 7th anyone enrolled in Original Medicare can shop around for new prescription drug coverage. And those of you enrolled in a Medicare Advantage plan (which typically includes prescription drug coverage) can also choose to switch your Medicare Advantage provider.
Research suggests most of you don’t bother to shop around. And that’s a potentially costly mistake. Studies show that enrolling in a prescription drug plan that offers you the best deal for the medications you specifically take can potentially save you hundreds, if not thousands of dollars a year.
Here’s what every Medicare enrollee should do.
1. Gather all your current prescriptions.
2. Find the Annual Notice of Changes (ANOC) or your current plan that was mailed to you in September. This document should spell out any price and coverage changes for your plan.
3. Focus on Formulary and Tiers. That’s a mouthful of insurance industry jargon, but it’s important for you to understand what they mean.
The Formulary is your insurer’s list of drugs that it will cover in the coming year. Do not assume that a drug that has always been covered in the past will be covered in 2017. Check.
Tiers: Insurers divide drugs in a few different levels of coverage, called Tiers. Tier 1 drugs are typically generics that will cost enrollees the least amount of coverage. Tier 2 drugs might be brand label drugs that are covered, but at a higher cost to you. The most expensive drugs are in Tier 3 or Tier 4. Again, you must check what tier your drug will be in next year. This too, can change from year to year.
4. Check the Pharmacy Coverage. Many plans offer their best coverage when you use a pharmacy that is a part of their network. Again, this is something that changes year-to-year, so be sure to confirm that your current pharmacy-or another one that is convenient-is a preferred pharmacy. (You can also consider switching to using your insurer’s mail-in pharmacy service.)
5. Have the Government Search For Your Best Option. Head over to the Medicare Plan Finder, a free online tool that will compare your current plan to other plans offered in your area. This is a tremendous resource, where you can input your exact prescriptions-dosage and frequency-and the tool will show you your estimated annual costs across different plans. If you’re not up for inputting the info, enlist your adult child or grandchild; it should take less than 15 minutes to find out if in fact there are more affordable options for you. I wish you a healthy 2017, and hopefully one where you can save on your prescription drug coverage.