Many people take the path of least resistance on Medicare coverage, sticking with the same arrangement from year to year.
But that can cost you a bundle.
Medicare changes its rules frequently, which affects premiums and benefits as insurance companies adjust their plans. A plan that was a bargain this year could be expensive next year.
As comforting as it might be to pick a plan with a low premium or an insurance company with a well-known name, that's just guesswork. The only good way to find the best deal is to crank up a computer and head for Medicare's website at www.medicare.gov.
Medicare's online Plan Finder factors in the drugs you take and then estimates your total out-of-pocket costs under each plan. In some cases, an inexpensive plan might cost $2,000 or $3,000 less than a competitor.
Using the Plan Finder is more complicated than buying a book from Amazon or booking a flight on Orbitz. But Medicare made several improvements to its website this year, making searches more tolerable. If you aren't comfortable with computers, try to find a friend to help. Expect the search to take 45 minutes to an hour.
Here are a few tips:
1. Go to www.medicare.gov and click on the blue button at top left that says Health and Drug Plans, then click on Compare Drug and Health Plans.
2. That will lead you through a few informational pages. The second page invites you to enter personal information, but you can skip that. Just enter your ZIP code.
3. When you reach the page to enter your drugs, note the box on the right that says Retrieve My Saved Drug List. After you have entered your drugs, write down your drug list ID number and password, which is a date. You can use the ID number and password to retrieve your drug list if you want to come back later and resume or do a new search.
As you enter drugs, a prompt may urge you to shift from brand names to generics to lower your cost. Don't switch to generics just yet. Enter your drug names and dosages exactly as you take them now. You can return to this step later to see how much switching to generics would save you. When you are finished entering your drugs, click on My Drug List is Complete.
4. On the pharmacy page, don't enter any. That could skew results. Go to the next page.
5. Refine Your Plan Results allows you to narrow your search to just particular types of plans, such as a prescription drug plan or a health plan with drug coverage. If you are sure you know what type of plan you want, go ahead and do that at upper left. Also, at middle left, click on the Change Health Status button. It is set at "good,'' but if you are either in ''poor'' or ''excellent'' health, then change to that status. Otherwise, don't do a lot of refining of your search at this point because you risk eliminating plans that might be best for you. For example, if you narrow your search to plans with lower premiums, you may eliminate plans with the lowest overall cost for people like you. If you make any refinements, click on the Update Plan Results button at the top then proceed to the next page.
6. The Your Plan Results page gives an overview of costs and features of all plans. These include prescription drug plans, which accompany traditional Medicare, and Medicare health plans, which provide doctors, hospitals and other services.
Here's some of what you can expect to see as you move through the process:
A. Only 10 plans of any type you choose are listed, with the cheapest first. To see more, click on the View 20 or View 50 buttons. Don't click on View All. It rearranges the list alphabetically, rather than by cost.
B. Cost: This is Medicare's estimate of what a person taking your specific drugs, and with your health condition, is likely to pay out of pocket over the course of the year. In most cases, the most expensive option will be original Medicare, because it offers the greatest choice of doctors and hospitals. Health plans with drug coverage are often the cheapest, but you are confined to a network of doctors and hospitals. Before picking a health plan, make sure your doctors accept payments from that insurance company — or be prepared to switch doctors.
C. Monthly premium: Premiums are factored into the total estimated health and drug costs, so don't assume plans with the lowest premiums are cheapest. If a plan does not cover your drugs, your out-of-pocket costs could be very high.
D. Drug coverage: This tells you whether a plan covers generic and/or brand-name drugs in the so-called doughnut hole or coverage gap. All other things being equal, the more coverage in the gap the better.
E. Out-of-pocket spending limit: Plans with limits are better than plans without. The lower the limit the better.
F. Compare plans: When you find a plan or plans that interest you, check the box and then click on the Compare Plans button. You can compare up to three plans at a time. Among the things you'll see: how a plan handles copayments for hospitalizations; drug costs and coverage, including when you enter the doughnut hole, and when you get out. Also, by November, Medicare intends to have a star system, rating each plan from one to five. This will tell you things such as how well doctors on the plan listen and how many clients left the plan in previous years.
Lowering drug costs
You might lower your costs substantially if you switch to generics or to a less expensive brand drug. This can change the relative costs of different plans. Ignore the links on the Plan Results page that say "Lower Your Drug Costs.'' They will just lead you down a murky path.
Instead, you are better off doing a new search.
First, make note of the estimated costs of the plans that interested you from your first search. It's smart to print out your Plan Results page, which gives the costs from your first search.
Go to the top of any page, where small blue links show your progression through the Plan Finder. The links look like this: Home a Medicare Plan Finder a Enter Information a Enter Your Drugs a etc. Click on Enter Your Drugs, which takes you back to your specific drug list.
That list shows generic alternatives, if available. When you click on the generic alternatives, the list will switch from the brand-name drug to the generic.
Then click on My Drug List is Complete and return to the Plan Results page. These results now reflect how much your costs will drop if you switch to generics. Quite often, different plans will now be listed as the cheapest.
Research these plans just as you did in the first search, looking at health benefits, out-of-pocket limits, plan ratings, etc. By comparing the two search results you can figure out how much you will save by switching to generics.
If you do intend to switch to a generic drug, consult your doctor before signing up, to make sure that those generics are safe for you.
On the Plan Results page, click on the name of the plan that interests you. That will give you the contact information for signing up. Or, you can find telephone numbers on the charts in this section. You can sign up any time between Nov. 15 and Dec. 31.