Question: I read somewhere that many people do not choose the cheapest Medicare Part D prescription drug coverage. Why would someone choose a Medicare Part D plan that might cost them more money?
Answer: In general, people are usually told to enroll into a Medicare plan based on: Cost, Coverage, Convenience, Company (reputation), and Choices (doctors and hospitals).
We usually just suggest that people enroll into a Medicare Part D or Medicare Advantage plan that most economically covers their estimated prescription and/or medical costs.
However, one of the shortcomings of the cost estimation process is that no one can accurately guess what will happen in the next year. That is, most people base their 2012 Medicare plan enrollment decision based on their current plan experience and then they are usually locked into their decision for the next 12 months, no matter what health changes they encounter in 2012. So some people choose a Medicare plan offered by a company that they know and feel they can trust – even when there is a higher cost for the convenience and predictability.
Likewise, other people pay more for a prescription drug plan because it offers a larger or more generous drug list and they feel that any of their new prescriptions have a better chance of being covered by a plan with a larger formulary. The same is true for people who choose a more expensive Medicare Advantage plan that provides additional network flexibility or health coverage.
Also, we find that some couples both enroll into the same Medicare plan so their statements and procedures are identical – although one of the two may be paying more per year than if they were enrolled in a different Medicare Advantage plan or Medicare Part D plan.
We also see that many people are often almost paralyzed by the Medicare plan choices each year and would rather pay more money for coverage that they understand. So, even though a person may be able to find more affordable prescription drug coverage or health coverage with another company, these people are not willing to risk the uncertainty of dealing with a new Medicare Part D plan carrier.
Bottom Line: Everyone makes their Medicare plan enrollment decisions based on features that are important to them - and not necessarily plain economics.
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