Medicare Part D: Lower Deductibles Might Not Save Money

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With Medicare prices rising and U.S. prescription drug prices still safe from government bargaining, it's understandable that seniors might be searching for the best deal possible when it comes to healthcare. For those who require a constant supply of medications the higher tiers of Medicare Part D drug plans might seem like a cost-saving option, but a new study has found that saving money on deductibles might not justify higher premiums.

HealthPocket, a health insurance plan comparison website, this week released an internal study showing that the higher premium cost Medicare Part D plans are, on average, "much more expensive" despite their lower deductible costs.

The website's study found, of course, that deductible costs for Medicare Part D plans tend to decrease as premiums rise, making it easier on the wallet when care is actually needed. Some plans even offer zero deductible costs when picking up medications. The site looked at premiums and deductibles for every stand-alone Medicare Part D plan in the U.S.

The site found that the plans with the lowest one-third of premium costs were priced with an average monthly premium of $36.08 and carried an average deductible of $209.77. The middle third of premium costs averaged an $88.66 premium and an average of $33.18 in deductible costs. The top third averaged a $130.87 premium and had no deductible.

Based on these numbers HealthPocket concluded that the average deductible savings between the plans in the lowest third of premiums and the highest third was $209.77. However, the plans in the highest third of premiums added an average of $1,137.48 in premium costs over those in the lowest third.

The website also found that plans with higher premiums tend to offer better coverage during Medicare Part D's "donut hole" coverage gap. With this and other considerations in mind, HealthPocket recommends that seniors not emphasize deductible costs when selecting their drug plan.

"Selecting a Part D plan based on a lower deductible could result in paying a higher premium than necessary for the coverage a senior needs," said Kev Coleman, head of Research & Data at HealthPocket. "This added premium expense could cost much more annually than the value of the deductible reduction."