Phil Moeller is doing a series of special pieces to help Considerable readers get ready for Medicare’s annual open enrollment period, which begins Oct. 15 and extends through Dec. 7. During this period, more than 60 million people who already have Medicare can keep their plans or totally change them for 2020.

Today’s open enrollment class is on Part D drug plans, used by more than 45 million Medicare enrollees. If you want to cut class, you can simply do nothing and you will be automatically reenrolled in your current plan for 2020.

Every year, I point out how consumers could save money and get better drug coverage if they shopped around during open enrollment. And every year, only a handful do so. Of course, if you’re reading this story, perhaps you are interesting in taking advantage of open enrollment. In the meantime, I will keep plugging away.

All Part D plans operate under the same general rules, but this doesn’t mean they’re all alike. Far from it. Plans may charge different premiums and co-pays. They can charge different amounts for the same drugs. They may have different preferred pharmacy networks. We’ll get to these.

The Centers for Medicare & Medicaid Services (CMS), which oversees Part D rules, has been crowing that average premiums for Part D plans have dropped during the Trump Administration from $34.70 a month in 2017 to a projected $30 next year. This is a nice bullet point for the talk shows but mostly helps people who don’t need to take drugs in the first plans. Total out-of-pocket drug costs are still a major concern for most Medicare beneficiaries — especially those who take expensive medications.

How Part D plans work

You will need to pay an annual deductible before your coverage kicks in. The maximum deductible for 2020 plans will be $435. Some plans may charge less, but more and more are using this maximum figure.

Once you’ve spent this much, your Part D insurance will take effect. This is where different plan co-pays can make a big difference in your out-of-pocket costs. Most Part D plans put their covered drugs in one of five pricing tiers — preferred generics, other generics, preferred branded drugs, other branded drugs, and expensive specialty medications. 

When you use Medicare’s Plan Finder to evaluate Part D plans, it should reflect how a plan’s pricing structure will effect out-of-pocket costs for the medications you take. If there is a price variation among plans for the cost of your drugs, it’s likely because of differences in their pricing tiers. If there’s a really big difference, it’s likely the plan doesn’t cover one or more of your drugs and will charge you the full retail price all year.

The coverage gap

Once your total costs for covered drugs have reached $4,020 next year, you will enter what’s called the “coverage gap” in Part D plans. Your insurance stops and you will be asked to pay 25 percent of the cost of both generic and branding drugs.

Convenient access to pharmacies is always important and not something you should take for granted.

When your total out-of-pocket costs have reached $6,350, your insurance will resume and you will be in your plan’s “catastrophic” coverage area. Here, you will pay no more than a few dollars for most drugs. However, you will still need to pay 5 percent of the cost of expensive drugs, with no cap on these expenses. 

Convenient access to pharmacies is always important and not something you should take for granted. For example, CVS’s acquisition of Aetna will strengthen the role of CVS as a preferred, and often cheaper, source of prescriptions for Aetna plans. When you use Plan Finder to review 2020 plans, make sure you check out preferred retail and mail-order pharmacies for the plans that seem appealing.