Medicare Part D - prepare to do your homework

The following is an excerpt from an article in SmartMoney Magazine, written by Glenn Ruffenach

Medicare Part D

Spending on prescription drugs in the U.S. totaled about $250 billion in 2009, more than six times the $40 billion spent in 1990. Here are some of the reasons why:
Increased use and demand. From 1999 to 2009, the population grew 9 percent, but the number of prescriptions purchased jumped 39 percent.

*Types of prescriptions written. The best-selling prescriptions are newer, higher-priced brand-name drugs, which have replaced older, less-expensive drugs.
Price increases. Retail prices for prescription drugs increased an average of 3.6 percent annually between 2000 and 2009, versus an inflation rate of 2.5 percent.
Research and development. Only one in five drugs in clinical tests reaches consumers. Manufacturers try to recoup R&D costs for drugs that make it to market—and those that don't.

Picking the right drug plan under this program could save you a bundle—if, and this is the key, you stay on top of changes in your plan.

Typically, you sign up for Part D when you first enroll in Medicare. Ideally, the plan you select will be one that covers the medications you take at the most affordable prices. (Each Part D plan, offered by private insurers, covers different drugs with different premiums and co-payments.) The problem: The plans can (and do) change, dropping drugs here, adding others there, and raising or lowering fees. If you fail to notice, for instance, that your plan no longer covers one of your medications—and if you don't take advantage of the annual opportunity to switch plans—your nest egg takes a hit.

It's a pain in the neck, but you have to do the homework—every year. "A mistake here, depending on how long you allow it to go on, could cost you thousands of dollars," says Joseph L. Matthews, coauthor of Social Security, Medicare and Government Pensions.

*Kaiser Family Foundation