Should I Sign Up For a Drug Plan? (Even if I’m Not on Expensive Medications)
I don’t know? Should you sign up for home insurance even if your house isn’t on fire?
Of course, this question is absurd. I mean, when was the last time you saw your soot-covered neighbor pant past you, saying, “We left the oven on! I need to go purchase home insurance! And fast!”
But the sad truth is that retirees often do this very thing with their prescription drug coverage. They refuse a drug plan to avoid the premium and then come into our office a month or year later in hopes of getting coverage. Unfortunately, we have to tell them, insurance just doesn’t work like that. Sure, they will be able to get on a Part D drug plan eventually, but it will cost them both in penalties and out-of-pocket expenses.
For the “If” in Life
The point is, like the MetLife commercials put so brilliantly: insurance is for the if in life. What if I get in a fender bender? What if my son needs braces? What if I leave the oven on and the house burns down? You get the idea. For prescription drug coverage, it is the same thing:
- What if I receive an unexpected diagnosis?
- What if I get in an accident?
- What if a sudden illness strikes?
You don’t expect these things to happen, of course, but that doesn’t mean they aren’t possible and shouldn’t be planned for. In fact, a Fidelity study shows how often retirees underestimate their medical expenses. The study discovered that a couple retiring now should expect to pay $245,000 in out-of-pocket expenses even though 48% of retirees in the study estimated they would only spend $50,000. You see, insuring your uncertain future is just an unpleasant but real part of life. It is also why getting on a dug plan is so vital.
Allow me to provide you with a real life example.
“I’d Like to Get on a Drug Plan Now”
In 2012, we had a client come in who refused a drug plan the year previously. Her husband painfully announced that they had some bad news: she had breast cancer. And not only that, her doctor prescribed her Femara, a pill that (in 2012) cost $500 a month. They needed a drug plan! And fast!
But—like I said before—it isn’t that easy. Not only did she incur an irritating premium increase for late enrollment, she had to wait until the Annual Enrollment Period (October 15- December 7) to sign up. And even then, the coverage wasn’t effective until the following year, January 1st. During this wait time, she racked up over $5500 in drug expenses. You can imagine the shock, the discomfort, and the regret the couple felt when we told them the bitter truth.
We Want You to Be Secure!
The goal of this post is not to make you a nervous wreck about your future health. This is about security. It is about educating you about risk, so you can make an informed decision about your coverage needs. Ultimately, it is about making sure you are taken care of when you need it most and expect it least.
In other words, for the “if” in life.
If you are questioning your need for a Part D prescription drug plan, we can help! Just call Seniormark at 937-492-8800, and we will be more than happy to assist you.
We are also offering “Solving the Medicare Puzzle” workshops in December for those who want to learn more about Medicare. Sign up for the date and location you choose here: Seniormark workshops. Hope to see you there!
About the Author
Ready to retire and unsure what to do next? Get our "Introduction to Medicare” eBook to start to make sense of Medicare and your options.